On January 18 of this year, Joanne Branch, a "contract specialist" with the San Diego Unified School District, sent architect Ralph Roesling a letter full of good news. His firm was being retained to do an initial design workup at three older schools being remodeled and expanded using money from bonds sold, thanks to voter passage of 1998's Proposition MM. "Congratulations on your selection to provide architectural services on another Prop MM project!" Branch wrote. "This letter constitutes your notice to proceed to begin the initial formulation of the design services for three sites, in the not-to-exceed amount of $25,000 per site."

Roesling's firm, Roesling Nakamura Architects, Inc., the letter went on, was being retained to work on the upgrades of Gompers Secondary, Jefferson Elementary, and Oak Park Elementary. "These funds are intended to cover your time and effort while you are holding your two task force meetings per site and finalizing the project scope and budget. Upon the completion of a pre-schematic budget and project schedule, you must provide me with a fixed fee proposal. This proposal is due by or before Friday, March 8, 2002."

Once the proposal was submitted to the district, Branch's letter continued, "We will enter into a brief negotiation phase. When negotiations are successfully completed, a notice to proceed will be issued for you to begin schematic documents." In other words, the original $25,000 design fee for each school was only the beginning for Roesling Nakamura. In fact, according to district records obtained under the provisions of the California Public Records act, the negotiations resulted in each of the three school projects being issued a "change order," which dramatically increased architectural fees to be paid to the architects.

On June 30, the Jefferson Elementary fees jumped from $25,000 to $350,000. The same day, Oak Park went from $25,000 to $311,300, and Gompers increased from $25,000 to $649,000. Less than a month later, on July 16, a fourth change order resulted in a $99,650 increase to the Gompers project, bringing its total to $748,900 in design fees alone, according to district records. According to a July 12, 2002, letter from the district to Roesling Nakamura, the total construction budget of the Jefferson project is $1,968,000. Based on that figure, the architects' fee represents 17.8 percent of the construction cost. The district letter says the Oak Project construction budget is $1,270,000, making the architects' fee 26.4 percent. In the case of Gompers, where the total budget is said to be $4,750,000, the architects' percentage is 14 percent.

The latest cost overrun was the result of an alleged "mistake" made by Roesling Nakamura. In a letter dated July 15, 2002, to school district contract specialist Joanne Branch, Roesling Nakamura business manager Harry Stephens wrote, "Thanks for working with me to get these figures corrected. I appreciate your understanding that it is possible for me to make an honest mistake. I have corrected the figures on Gompers for the Portable Certification."

In a letter responding to Stephens, dated July 16, 2002, Branch wrote, "On July 15, 2002, we were notified that you had identified a clerical error on the proposal for Gompers Middle School related to the fees for the certification of the 32 portable buildings. You had inadvertently re-used the numbers from Oak Park instead of calculating specifically for Gompers. We have reviewed your claim and find that is fair and reasonable to increase your fees by $99,650 for the work associated with the certification of these buildings." After saying she would respond to a request for comment after talking to superiors, Branch subsequently failed to call back.

What led to the other such increases in the fees? What justified them? What was the district's reasoning, and what criteria did it use to negotiate the new contract, granted without competitive bid or any kind of public hearing?

Only a partial accounting of the Roesling Nakamura contract and the negotiations that led to it can be given, because after providing some documents covering the three projects and their change orders, the district abruptly switched course and refused to turn over any more records, claiming an exemption in the public records law that, the district contends, allows it to keep details of its negotiations with the architectural firm secret.

"The District is withholding certain materials specifically relating to negotiations, which are exempt under the deliberative process privilege found under Government Code section 6255," according to a letter to Reader attorney William J. Sauer, dated August 26, 2002, and signed by Sandra T.M. Chong, Proposition MM staff attorney.

Terry Franke, general counsel of the Sacramento-based California First Amendment Coalition, which represents newspapers and broadcasters advocating full and open access to governmental records at both the state and local level, argues that San Diego Unified's use of the "deliberative process privilege" to withhold the Roesling Nakamura negotiation documents is without legal foundation or justification.

"What you see here is an example of a rash or a virus that's spreading pretty obviously among state and local agencies, just using the deliberative process privilege as a wild card for whatever you can't otherwise exempt from public scrutiny."

The exemption claimed by the district, Franke explains, was created over the past several years by four state court rulings in various public-records-act cases. "Three out of the four cases involve information touching on the governor's decisions. In one case it was simply information on who met with him over an extended period of time, and in two other cases it was information supplied to him by people who wanted to be appointed to public office. In one case, the fourth case, the court of appeal has applied it to the phone numbers dialed by members of the city council over a year or two."

In each case the court's rationale was to preserve the confidentiality of elected officials for limited purposes. "The idea is to allow policy makers to get the benefit of candid advice and really explore a variety of potentially controversial options in as free a way as possible," Franke says. He adds that an exemption under those circumstances is far different from the situation presented in the Roesling Nakamura case.

"It sure doesn't fit what we're talking about. If you do have contract negotiations, then certainly the idea that you want the government's money to be spent prudently without waste, fraud, or corruption means that how it's spent, and the decisions leading to its being spent and the roads taken and the roads not taken should be open to public scrutiny.

"There is no exemption in the California Public Records Act for documents that show how a contract was negotiated. If anything, the policy would tend to be in the opposite direction, because it has to do with who gets public funds and how wisely public funds are spent.

"I have simply never heard of anyone even going to court maintaining that they were not required to make public records showing how a professional-services contract was negotiated. If the district were to stick with this and go into court behind that flag, as far as I know it would be the first time, and I think it would be foolish for them to do so."

La Mesa architect Ed Oremen represents the local chapter of the American Institute of Architects on the school district's Independent Citizens Oversight Committee, set up by the district's board of trustees to monitor how the $1.5 billion in Prop MM bond proceeds are being spent. Provided a description of the contract without the names of the parties, Oremen said such arrangements are rare but sometimes employed when the ultimate scope of the project is not known.

"I guess you might use a system like that if you went into the preliminary design without a really clear understanding of the project requirements," Oreman says. "I can't think of anything other than a new school that might represent that kind of a problem. I don't know if the district is doing that or not. I'm not familiar with any situations like that."

But the secretly negotiated cost increases are only the beginning of the story. What makes the case especially intriguing is the identity of Roesling's partner, Kotaro Nakamura, a well-known local architect whose wife, Katherine Nakamura, is currently running to replace outgoing trustee Sue Braun. Mrs. Nakamura, a well-connected San Diego attorney and assistant secretary of the Corporation, Board of Trustees of the University of San Diego, is running against Jeff Lee, an ex-Navy commander who has been sharply critical of district superintendent Alan Bersin and his controversial reform agenda.

Late last month, the Union-Tribune slammed Lee for failing to disclose that he had once been relieved of command during his Navy career for allegedly abusing two crew members and then lying to the newspaper about it. The newspaper said it had obtained documents from anonymous sources. Soon after its disclosure of Lee's record on its news pages, the paper ran an editorial attacking the candidate's suitability for office. Lee denied that the allegations led to his retirement from the Navy, and his supporters claim he is being railroaded with trumped-up charges by the newspaper.

Nakamura, on the other hand, is regarded as a Bersin supporter who has the presumptive endorsement of the Chamber of Commerce and the Union-Tribune, which strongly backs Bersin and what it considers his reform program. Bersin has close ties to the University of San Diego. His first job after moving here from Los Angeles was as a visiting USD law professor. Since taking over as superintendent, he has guided the district into a close contractual relationship with the university through which USD oversees an $8 million principal-training program. That operation is run by Elaine Fink, a close personal friend of Bersin's hand-picked chancellor of instruction, former New York City school administrator Anthony Alvarado.

Questions about conflicts of interest and school contracting are not new for Bersin and the district. In August, television news reports broke the story of a district attorney's investigation into an alleged kickback scandal involving an unnamed district employee and a computer supply company, Mac Exchange, in Eugene, Oregon.

Another recent irregularity is the failure of acquisitions manager Robert Kiesling, a close aide to district construction czar Lou Smith, to file a personal financial disclosure statement, as required by state law. Following a reporter's request to review Kiesling's Statement of Economic Interests, which was due in April of this year, Joanne SawyerKnoll, the district's general counsel, responded in a letter dated August 29, 2002. "Mr. Kiesling has not yet filed the 2001 annual statement, and we will be following up with him to obtain it." Kiesling subsequently filed a disclosure claiming that he has no reportable assets or income.

The Lee-Nakamura race, already nasty as a result of the Union-Tribune revelations and editorial, is expected to get even more intense, especially in light of its widely perceived importance to the tenure of Bersin as school superintendent. Ever since he was hired, Bersin has been shadowed by the fact that two of the five members of the board of education have been highly critical of his administration; should Lee win his race and incumbent John de Beck be reelected, Bersin faces the very real possibility he might be fired.

For his own part, Kotaro Nakamura is also linked to some of Bersin's key allies in the business community. Last December the Union-Tribune reported that Roesling Nakamura had been picked to design a $25 million downtown parking garage for JMI Realty, a company belonging to Padres owner John Moores. Two years ago, Moores and a group of other wealthy businessmen, including Qualcomm founder Irwin Jacobs and real estate mogul Malin Burnham, put up close to a million dollars in a failed attempt to defeat incumbent school board member Frances Zimmerman.

At that time, it was widely believed that the Moores group had designs on school-district property. In 1999, Zimmerman and other Bersin critics had attacked Bersin for establishing an informal committee within the district offices to discuss selling off and otherwise developing some of the district's vast land holdings. The committee was chaired by Bersin's father-in-law, Stanley Foster, a wealthy local real estate investor who died earlier this year.

Under state law, a four-to-one vote of the school board is required to sell district property, which meant that defeat of Zimmerman and election of her opponent Julie Dubick, a lawyer believed to be in sympathy with Bersin's goals, would have opened the way to the pro-development interests. Following Zimmerman's victory, the Foster-led property committee was disbanded.

Kotaro Nakamura himself says he isn't familiar with the details of the Gompers project or the negotiations that resulted in the final fee and then the $96,000 clerical error. "I am not the architect of that project. If you have detailed questions, I don't know anything about it. I don't know the scope. I don't know how big that project is. I have no idea.

"How the contract was arranged, I have no idea."

Speaking of the master contract, issued by the board of education in June of last year, Nakamura says: "Only thing I know and can tell you is that it is an open-ended contract. It's about $5 million for our firm. The reason is they are in a hurry to assign architects, because the district was slow to start implementing Prop MM projects. I understand that they wanted to create this open-ended contract in the way the Navy has for their projects."

He says that the firm gets a lot of work from the school district because it has earned it and not due to any untoward inside influences. "The district loves us. Our services are number one, and we keep our clients very happy. We are one of the best in San Diego. We like to do good design. Design means a lot to us."

But if his wife is elected to the school board in November, Nakamura says, Roesling Nakamura won't be doing any more work for San Diego Unified. Period. "Yes. We can't get any more projects from the district, which is a tremendous burden to us. When she was asked to run, and she came to me, and I went to my partner, we discussed no more business with the district. And at that point my wife and myself said, if that is a problem with my partners, she's not going to run.

"My partners were kind enough to let us proceed. I am very thankful to my partners. I have to look for other clients to replace the income we have with the district. I like to do a good job. I like to build good libraries for these kids. At the same time, Katherine wants to do what she wants to do. I have other clients, such as the state of California, the Navy, and also we have many other districts -- Grossmont, Del Mar Union, San Dieguito, Cajon Valley, Santa Barbara and Oxnard Unified School District. We are on time and on budget, and they have a tendency to give us more projects."

Nakamura says his written pledge that his firm won't do business with San Diego Unified is on file in the school district's attorney's office. "She talked to the district counsel [about avoiding conflicts of interest]. They were not sure, and they didn't give us a clear answer. Some people familiar with the law said there was no problem. Finally, we went all the way up to the state of California attorney general's office, and we asked them directly. They said, 'Yes, there was a conflict of interest.' I mentioned I was willing to leave my company; they said that doesn't solve the problem, that that would be a maneuver, a trick. That was one of my options, and I am still willing to do it, but they advised us not to do it."

Following the interview, Nakamura faxed a copy of the letter, addressed to his wife and signed by himself and the other partners in his firm, Ralph Roesling, Mun Ying Kung, Chikako Terada, and Joseph Mansfield. It is dated August 20, more than a month after the district received the first Public Record Act request for documents concerning the Gompers remodel and other Nakamura projects.

"In light of your success in the primary election for a seat on the Board of Education, we believe this is an appropriate time to put our current understanding with you in writing," the letter opens.

"The issue is that Kotaro Nakamura, your husband, is a shareholder of Roesling Nakamura Architects, Inc., that is doing business with the San Diego Unified School District and if you become a board member, there will be conflicts of interest.

"As we have discussed over the last few months, should you be sworn into the Board of Education, neither of our architectural firms, Roesling Nakamura Architects, Inc., or Gelfand RNP, Inc., will continue to seek or accept contracts for our services with the San Diego Unified School District. This understanding will continue throughout the term of your elected office."

The letter ends:

"Kat, once again, please accept our sincere congratulations. After listening to you talk for years about the importance of education and watching your hard work and commitment at Hearst Elementary School, we can't think of anyone who would do a better job for the children of San Diego."