Report released on former Scottsdale district's CFO's conflict of interest allegations

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Laura Smith (Source: Scottsdale Unified School District) Laura Smith (Source: Scottsdale Unified School District)
SCOTTSDALE, AZ (3TV/CBS 5) -

We obtained a copy of the independent investigator's report, given to the Scottsdale Unified School District this week, surrounding the former chief financial officer Laura Smith and her alleged conflict of interest involving a company called the Professional Group Public Consulting, Inc. 

The report is 30 pages long, and the attorney who compiled it, Susan Segal, said she isn't done investigating.

Smith recently resigned as CFO at the Scottsdale Unified School District amid the investigation into PGPC, a company the district did business with. Smith had a financial stake in PGPC, and her sister also has a substantial financial interest in the company.

[RELATED: Scottsdale district's CFO resigns amid conflict of interest allegations]

In her report, Segal said Smith had stated she notified PGPC she wanted to sell her interests a few months after getting hired by the district. But "she has not provided evidence that the stock was sold or how much of the stock was sold," Segal wrote.

Smith had previously signed a conflict of interest disclosure form with the district, but failed to disclose how much of an interest she had in PGPC, and the substantial interest of her sister.

Segal’s report also suggests Smith was actively involved in hiring PGPC, including deliberately contacting her sister to find out PGPC’s prices. She stated she believes Smith violated state conflict of interest law.

[RELATED: Scottsdale Unified attorney: Former CFO violated state law]

Before the regularly scheduled study session Thursday night, the board met behind closed doors, discussing the attorney general’s investigations into the district, state conflict of interest law, and PGPC.

A district spokesperson told us anything in executive session is privileged/confidential. 

"This shows a pattern of disregard for conflict of interest requirements," said John Washington, whose daughter is an SUSD student. He said he worries about the impact of this controversy. 

"As far as direct impact on my student, I have concerns about that," Washington said. "But I have larger concerns for the district as far as where is our money going to, and how efficiently is it being spent."

Segal tells us she's now investigating who knew what and when.

The attorney general's office has confirmed they have open investigations into the district, but said they do not comment on ongoing investigations.

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Lindsey ReiserLindsey Reiser is a Scottsdale native and an award-winning multimedia journalist.

Click to learn more about Lindsey

Lindsey Reiser

Lindsey returned to the Valley in 2010 after covering border and immigration issues in El Paso, TX. While in El Paso she investigated public corruption, uncovered poor business practices, and routinely reported on the violence across the border.

Lindsey feels honored to have several awards under her belt, including a Society of Professional Journalists Mark of Excellence Award, Hearst Journalist Award, and several National Broadcast Education Association Awards.

Lindsey is a graduate of the Walter Cronkite School of Journalism and Mass Communication at Arizona State University, and she currently serves as a mentor to journalism students. She studied for a semester in Alicante, Spain and also earned a degree in Spanish at ASU.

She is proud to serve as a member of United Blood Services’ Community Leadership Council, a volunteer advisory board for the UBS of Arizona.

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