Ex-comptroller in Carroll Co. offers to testify before grand jury on actions of school board; Panel 'stonewalled' audit for years, he says


A former comptroller for the Carroll County Board of Education has volunteered to testify before a county grand jury, saying that the school board has for years "stonewalled" efforts to have a performance audit and that Superintendent William H. Hyde once tried to "blackmail" him.

In a letter hand-delivered to the Carroll County state's attorney Oct. 13 with a number of supporting documents, James E. Reter, a certified public accountant who was comptroller for the school system from 1979 to 1993, urged jurors to continue their inquiry into the Board of Education.

Hyde declined to respond to Reter's letter, saying he will not comment on issues before the grand jury.

The 23-member jury, impaneled in May, has been looking into the school system and its oversight of several troubled construction projects. Jurors have heard testimony from county Budget Director Steven D. Powell and school board member Susan W. Krebs.

Reter wrote that he is also willing to testify about his concerns, including questions about school system finances.

"The prevailing attitude among the administration of the Department of Education is that once money has been appropriated they can do what they want without oversight of any kind," he wrote.

Reter also wrote that Hyde tried to "blackmail" him "into silence" several years ago. In an interview, Reter said Hyde threatened to publicize love notes Reter received from a woman he was having an affair with while he was married.

Reter received the notes from a co-worker over a period of several months in 1987. When he retired from the school system in 1993, Reter said, he apparently forgot to remove all the notes from his office.

Three years later, he learned of his mistake in a chance meeting with Hyde, who was assistant superintendent of administration at the time. Hyde told him that he had found the personal correspondence and promised to return it, Reter said.

Reter said Hyde then threatened to release the letters to the press.

At the time, Reter had been accusing the school board of transferring funds between accounts without notifying the county commissioners, as required by state law.

"I think he was trying to shut me up," Reter said in an interview.

The day after the meeting, Reter wrote a letter to Hyde expressing his concerns and sent a copy to the state's attorney's office.

"Although you promised to return that correspondence, you indicated that you cannot guarantee that they had not been duplicated and may be turned over to the press. I feel a clearly implied threat that these personal letters may be duplicated and distributed," Reter wrote Feb. 9, 1996. Ten days later, Hyde returned Reter's personal letters in a manila envelope from his office and included a note.

"At no point in time did I ever threaten you or attempt to influence your position on any issue. I am personally offended by your allegations," Hyde wrote.

In clarifying his conversation with Reter, Hyde wrote of his "personal concern that someone in possession of copies of these documents could choose to make them public in an attempt to embarrass you or your former employer, Carroll County Public Schools."

Reter said he came forward because "it is in the public interest if someone who is head of the school system would do something like this."

Soon after writing his letter to Hyde in 1996, Reter asked the office of the state's attorney to look into the possibility that he was being blackmailed.

But Jerome J. Joyce, the assistant state's attorney who reviewed the matter, said Reter's accusation did not meet the standard of extortion, commonly known as blackmail. Still, Joyce decided to intervene in the squabble, writing a letter to Hyde requesting the notes be returned.

In his one-page letter to the grand jury, Reter also asked jurors to investigate controversies over retirement packages for superintendents.

In calculating the retirement packages, the school system included perks such as car allowances as part of the superintendent's salary, Reter said. Reter provided documentation to the grand jury showing that including fringe benefits, which make retirement packages larger, is not permitted by the state.

Before he became comptroller, Reter was chief auditor for the state Department of Education.

Reter said that after he raised questions about the retirement calculations in 1992, Hyde overloaded him with work and refused to fill staff positions in his department. Reter retired in June 1993.

"It was like getting run over by a train," Reter said. "You know you're getting run over, but there is nothing you can do about it."

Since his retirement, Reter has been an outspoken critic of the school system. In 1998, he made an unsuccessful bid for a school board seat. He finished fourth in a field of six, just behind current Board President Gary W. Bauer.

Hyde declined to comment on any of the issues referred to in Reter's letter.

"It would be inappropriate for me to comment on anything they may be addressing. I don't feel I should comment on any of the issues Mr. Reter has addressed in this correspondence," Hyde said in an interview yesterday.

The grand jury that has been investigating the school system was scheduled to be dismissed Oct. 31. A new grand jury will be impaneled Nov. 1.

Grand juries that are in the midst of investigations can extend their term with the permission of a judge.

If the grand jury is extended, Hyde said he will be more than willing to appear before jurors to discuss issues of interest to them.

"I am an enthusiastic supporter of the grand jury process," Hyde said. "If it's still open, I'd welcome the chance to chat with them."

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