Eating It Up

Are HISD and Aramark cooking the books to feast on federal breakfast subsidies?

The cafeteria workers at Jefferson Davis High School run their breakfast program with factorylike precision. Into the big blue Igloo coolers go foil-wrapped taco pockets, cartons of milk and boxes of apple juice. Each kid gets one breakfast. Each classroom gets one cooler.

The coolers are shipped to classrooms at Davis just before the bell rings; by the time morning announcements are over, the kids have brought them back, laden with crumpled foil and empty cartons. Another day, another breakfast served.

There's just one problem: Many of the breakfasts never even get touched.

Breakfast in the Classroom is a project of the Houston Independent School District and its food service contractor, Philadelphia-based Aramark. Figuring that kids learn better on a full stomach, 56 schools in the district now serve breakfast during first period to anyone who wants it. Thanks to the project, HISD now serves 11 million free breakfasts a year -- almost five million more than it did before the program expanded.

But a quick survey of the returned coolers at Davis reveals that a breakfast served is much different from a breakfast eaten. Cooler after cooler returns with untouched taco pockets and unopened milk cartons; in many coolers, the juice is gone, but that's about it.

HISD spokeswoman Adriana Villarreal says that only kids who want breakfast get food, and teachers use rosters to check off the kids who eat. But the worksheets at Davis seem to bear little relation to the evidence. In one classroom, for example, the teacher has checked off 32 of 37 kids -- despite returning a cooler with 33 milk cartons and 18 unopened tacos. In another, the teacher has marked off 28 kids, but only five took tacos.

There's more at stake than accurate record-keeping. The federal government's Free Breakfast Program reimburses HISD up to $1.46 for every eligible kid who eats breakfast. Last year, that added up to $16.7 million in federal funds to the district.

Thanks to the fed's largesse, HISD's food service program ran an $8.9 million surplus last year, according to records. And that, along with the increased participation numbers, ensured Aramark its highest fee yet: $4.75 million for the year.

Not everyone is happy.

"They're serving thousands of breakfasts that no one even looks at, much less eats," says Orell Fitzsimmons, field director for the Service Employees International Union Local 100. "They're bilking the free breakfast program for millions every year."

HISD spokesman Terry Abbott rejects that criticism. This year "we were able to actually cut the price of our meals for the poorest kids in half, while all around the country other school districts were raising prices," he writes. "Fitzsimmons has always opposed Aramark, and he has always been wrong."


Hiring a private company to manage HISD's food service program was the brainchild of former superintendent Rod Paige, now the U.S. secretary of education. The district's cafeterias had barely been breaking even; the state comptroller had released a blistering audit. Aramark, Paige said, would clean up the mess and run the program at a profit.

However, the plan lost money in two of Aramark's first three years managing it, including a whopping $2.8 million in the 1998-99 school year, according to district records.

Breakfast in the Classroom changed that. While the program officially started with one school in 1997, it didn't really hit a critical mass until the new millennium. Not so coincidentally, the food service program began to run fat surpluses at the same time. In fiscal year 2002, it ran $8.7 million in the black -- a 361 percent improvement from the year before, according to records. Last year, with the program in at least 30 schools, breakfast subsidies made up 16 percent of the program's total revenue.

The math is simple enough. Once cafeteria workers are on-site, it's significantly more economical for them to serve two meals than one, especially when most of those meals are paid for by the federal government. (The program is aimed at lower-income students; more than 80 percent of HISD kids qualify for free or reduced-price meals.)

Of course, the district could just serve breakfast in the cafeteria. After all, janitors say the in-room breakfasts create a big mess; one teacher at Reagan High reported that his students enjoyed hiding the breakfast entrée around the room and daring him to find it before it rotted.

But kids just aren't interested in stopping by the cafeteria. Maggie Polk, food service manager at Sam Houston High, says she served almost 2,700 meals every day last year during the Breakfast in the Classroom. After the program was canceled this year and kids were required to make a trip to the cafeteria to eat, that number dropped to 200 -- even though Aramark cut prices.

Aramark is making a big push to expand to more schools. It's been peddling a packet of information to union reps and acting superintendent Abe Saavedra, spelling out its financial benefits. The packet quotes the president of the National Education Association saying that serving kids breakfast is important for "the future of this country." It even notes that schools that serve breakfast in the classroom showed a significant increase in standardized test scores.

Aramark's qualitative claims are difficult to confirm. Aramark's own stats show that secondary schools in the program averaged a 3 percent improvement in their passing rate; the district average for the same year was a 5 percent gain, according to the Texas Education Agency. So secondary schools in the program actually did a little worse than their peers.

And while Aramark cites an oft-quoted Harvard University study that showed that kids who eat breakfast do better in school, it ignores a similar study from the USDA with much different findings.

Preliminary results from the government study show that offering free breakfasts to every student "did not have a significant impact on measure of dietary intake or school performance." The study found that kids who previously ate breakfast at home simply started eating at school. The USDA concluded that the only real difference was that the universal breakfast helped to lower the school's per-meal cost.

Aramark spokeswoman Kate Moran deferred all comment to the district, and she did not return subsequent calls. HISD spokeswoman Villarreal says the district is happy with the program, but it's up to each school to decide whether to participate.


Fitzsimmons, the union director, would like to see HISD get rid of Aramark. His union represents food service workers; he claims that Aramark has gradually phased out full-time employees with benefits in exchange for cheaper labor. He believes that the taco-filled coolers he witnessed at Jefferson Davis point to "federal fraud"; he wants the school board to launch an investigation.

"The president of the school board needs to get Aramark out of our kitchens," he says. "They care about profit and not about our children." And while the district crows about increased federal subsidies, Fitzsimmons will have none of it: "This is our money -- federal tax dollars. I'm paying for it, and you are, too."

If history is any indicator, however, Fitzsimmons won't have an easy time getting resolution on his complaints.

Three years ago, Fitzsimmons started asking questions about Quality Concession Foods. The company's owner is Darryl King, a well-connected entrepreneur who chaired the Urban League and later took the helm at the Convention and Visitors Bureau.

King says he contacted Aramark in 1996 and persuaded it to go for the HISD food service contract -- and make Quality its minority partner. (For a while, Quality also partnered with Aramark at the George R. Brown Convention Center, although King refuses to discuss whether he still does work there.) Ever since then, it's earned roughly 25 percent of Aramark's fee.

Although Aramark has paid King anywhere from $600,000 to $1 million a year, food service workers told Fitzsimmons they'd never met anyone from Quality and had seen King only once -- at a Christmas party.

Fitzsimmons called for an audit. The district ignored him. "They never did anything," he says.

King insists that he takes an active role. "Do government employees see President Bush? I work on all my contracts," he says. "I don't visit every single school, but what I do is not anybody's damn business. Everybody who thinks I don't work can kiss my black ass, and you can quote me on that."

In the last three years, questions about Quality have increased. County records show numerous tax liens against both the company and King personally. Quality owes close to $300,000 in overdue federal taxes alone; it also faces liens from the state workforce commission. In February, the Texas secretary of state revoked the company's charter for failure to file the proper tax forms; after eight months without corporate privileges in Texas, King finally filed the paperwork last month and began to work to regain certification, a state spokesman says.

In July, the company also lost city certification as a minority-owned subcontractor. It has begun to rectify the situation, says city affirmative action director Velma Laws.

District records show that Aramark paid Quality $1.19 million in the last year alone -- despite its yanked charter. Robert Gallegos, HISD's director of supplier diversity, says he plans to follow up: "The fact that they're not certified at this present moment, there are a lot of questions that need to be answered."

King insists that his company's problems are no more than paperwork mistakes. He describes an impoverished childhood and briefly blames both a cancer-stricken employee and a failure to update addresses before changing the topic. He won't discuss what he actually does for the schools.

"I don't intend to have a detailed conversation about my business practices," he says. "I don't do anything illegal. I don't ask for anything illegal. You don't see me out there wining and dining these people." When asked about a fund-raiser he underwrote last year for HISD board member Larry Marshall, King insists that's different: "Of course we do fund-raisers. Everybody does fund-raisers."


In the last five years, Aramark increased the number of breakfasts served at HISD by 65 percent, according to state records. At the same time, federal subsidies to the district have increased 48 percent. Those are far greater than the 13 percent increase notched by the San Antonio schools or the Dallas school district's 8 percent increase.

Spokeswoman Villarreal says HISD is pleased with Aramark. She cites increased participation in the food service program, a "record number" of meals served per day and a glowing report on nutritional content.

So far, the feds aren't concerned, either. They count on the Texas Department of Agriculture to monitor free breakfast and lunch programs, says USDA spokeswoman Susan Acker. The state periodically checks to ensure that numbers are in a realistic range, Acker says, but "comprehensive reviews" and on-site visits are required only once every five years.

They're not looking at bigger trends, so they can't be expected to notice that HISD students are hardly willing to put their money where their mouth is. At the same time that Breakfast in the Classroom has increased the number of breakfasts served, state records show the number of kids paying for lunch has dropped 22 percent.

"They know how to scam, and scam legally," Fitzsimmons says. "But that doesn't make it right."

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