Fresno Unified fired him. Now, he’s chairman of Valley Children’s and under scrutiny again

November 10

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Michael Hanson, chairman of the board that approved the heavily-criticized pay packages for Valley Children’s Hospital executives in recent years, started his public life in Fresno in 2005 as deputy superintendent of the city’s troubled school district. Fresno Unified, California’s third-largest school district, faced a state takeover and was in desperate need of dynamic leadership and change.

Within his first year, Hanson ascended to superintendent, and almost immediately, the UCLA and Harvard-educated innovator was praised for swift reforms as he also became a lightning rod for criticism. In his first two years, he replaced 12 principals at schools with poor performance, an act that one former board member said set the tone for Hanson’s tenure.

That 12-year tenure included an FBI investigation into alleged bid-rigging and a publicly tempestuous relationship with some school board members, teachers’ groups and residents over his management style and policies. During Hanson’s tenure, the district also built a partnership with Valley Children’s and other healthcare organizations related to a then-audacious plan to build special clinics to serve poor students on location at Fresno Unified schools.

Hanson’s time as leader of Fresno Unified also included some head-scratching moments and revelations. ABC30 reported in 2011 that Hanson received three speeding tickets while driving on an expired license. The broadcaster said that while it reported on the tickets it also discovered that Hanson had been accused in 2008 of bumping into a small child with his car as the child rode on a Big Wheel, a type of child’s plastic tricycle. He was once allegedly assaulted by a school board member after a meeting. He also accused The Fresno Bee of writing misinformation about the school district.

So how does a former schools superintendent with a controversial past come to be the chairman of a board that sets pay and benefits for executives at a multi-billion-dollar nonprofit?

Some of his critics remember him mostly as an authoritarian who lacked transparency, but supporters and admirers of the polarizing figure point to his fearless, reform-minded leadership they witnessed since he moved to Fresno in 2005. The Bee’s editorial board expressed admiration for his dedication, saying that he “gave his all to Fresno Unified” as superintendent.

“We finally have a visionary,” a teacher once said about Hanson’s arrival as leader of Fresno Unified. “We know where we’re going.”

Even after Fresno Unified trustees fired Hanson in 2017, he remained a Valley Children’s hospital board member, an unpaid position. For his next day job, he moved to Sacramento County and began working for its Office of Education.

Over several years since leaving Fresno, he steadily moved up Valley Children’s governance ladder, ultimately serving on its compensation committee and then becoming chair of the Valley Children’s Healthcare Board of Trustees, the group that governs the nonprofit’s entire, Central Valley-wide network.

The volunteer board positions are unpaid and new members are elected by the existing Healthcare board, according to Valley Children’s corporate bylaws. The appointments come with a certain amount of prestige as board members help oversee a multi-billion-dollar nonprofit associated with helping hundreds of thousands of sick children a year.

The Bee has examined Hanson’s colorful career in education and in governance of one of the nation’s largest nonprofit children’s hospitals, which has been in a spotlight recently for its decisions around executive compensation. The Bee also dived deep into our archives to look at past coverage of Hanson and his time as superintendent.

Valley Children’s this year has been criticized for CEO Todd Suntrapak’s board-approved compensation, which in 2022 included a forgivable $5 million home loan, and for the compensation of a cadre of VPs with annual packages worth more than $1 million each in recent years. In Suntrapak’s only public response to the media coverage, he pointed out in a June interview with ABC30 that the board, not the CEO, sets pay and perk packages, effectively putting the question back on Hanson.

A Fresno Bee analysis in March found that the 2022 CEO pay levels were higher and the pool of high-ranking executives employed at the hospital larger than at most of the 15 nonprofit children’s hospitals in the nation with more beds, including several big-city operations. At the same time, several lawsuits launched by Valley Children’s nurses allege that the nonprofit has not paid them lawfully.

The compensation figures have struck a particularly sour note for some Fresno residents and elected officials because Valley Children’s, known by its multi-colored facade visible from Highway 41, has been a reliably trustworthy, go-to charity in the community. For years, residents have been asked to round-up purchases at local fast food restaurants and contribute cash during various fundraising events, including Kids’ Day, when local teens and other volunteers stand on street corners and sell special newspapers to raise money. In the past, The Bee has been a sponsor for Kids’ Day.

Under current leadership, Valley Children’s assets have grown to a value of more than $2 billion, including a land and investment portfolio with a strong performance that the nonprofit is quick to point out. Hanson has said in the past that the organization pays up to retain top flight executive talent and that leadership has been successful in growing the organization to ensure a vibrant future for the healthcare network.

Hanson, now in his late 50’s, would not speak to The Bee for this profile.

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Michael Hanson’s photo hangs in the row of Fresno Unified’s superintendents at its headquarters downtown in 2017. Hanson served as the school district’s superintendent from 2005-2017.

‘He’s real gung ho’

Hanson was 39 years old – maybe too young, some teachers thought – when he was hired in Fresno in April 2005 as a deputy superintendent under a plan that would make him chief of schools after 14 months. The Harvard grad had become a school principal in New York before 30. His colleagues in Sacramento and New York said Hanson was highly intelligent, worked relentlessly and was not afraid to make difficult decisions.

“He’s real gung ho. He’s a mover and a shaker. He’s, in the modern parlance, what you call a change agent,” Carl Woodbury, an Elk Grove Unified union leader, told The Bee in 2005.

The expectations were high.

Fresno Unified’s students were well behind those in the rest of California. Educators and administrators were not performing up to standard, and the state was poised to take control of the financially ruined school district, remembers Valerie Davis, a long-time school board trustee. Fresno Unified had already cut music programs, librarians and campus assistants to survive.

Hanson didn’t shy away from the reality of the situation. He immediately re-organized the central office, set penalties for educators who failed to improve their performance and assigned hundreds of the district’s successful teachers to coach failing ones in an innovative mentoring program.

“It would be a mistake for anybody to think that district employees, at any level, who fail to perform after repeated attempts to assist them, will continue in their current position or will simply be transferred to the same job at a different site,” Hanson said in an August 2005 email to The Bee.

Supporters and detractors – several of them school board trustees – split into camps of those who praised Hanson’s accountability-minded leadership and those who accused him of authoritarianism and a lack of transparency. Hanson’s detractors called for disciplinary actions against him and independent investigations into the district’s business dealings.

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Valerie Davis and Michael Hanson

‘This job is so complex’

Bob Nelson, who left Fresno Unified this summer after serving as the district’s superintendent for seven years, described the job as no easy task and Hanson as “one of the smartest people I have ever met.” Nelson became superintendent after Hanson was fired and after serving as Hanson’s chief of staff for about 18 months.

“This job is so complex, you are going to make enemies,” Nelson said in a May interview with The Bee about his own Fresno Unified tenure. “Mike (Hanson) had (school board) trustees with whom he had a great deal of trust, and he had trustees with whom there was not a great deal of trust.”

In general, Nelson said, there’s a strong tradition of powerful and monied real estate developers getting involved with the politics of school boards – people buy new homes with the intention of sending their children to a specific school district. He said superintendents have to know where the money, power and influences are in the politics of education.

“A lot of my work as a superintendent is to block and tackle, to make sure that kids stay at the center of what we’re trying to do,” Nelson told The Bee.

To Hanson’s supporters, the changes he made at Fresno Unified did exactly that by focusing on students’ academic performance, educators’ effectiveness in the classroom and financial stability for the district.

They say he courted controversy because of his bold policies for change, and cautioned the district about chasing away a true reformer. A former colleague described Hanson as “tough as nails.” But he was also described by community members as the type of man who helped Fresno Unified students “with dollars out of his own pocket” and as “one of the greatest civil rights leaders in Fresno in the 21st century.”

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Former Fresno Unified school board President Brooke Ashjian, sitting, watches former Superintendent Michael Hanson debate him at a Chamber of Commerce meeting in September 2016.

‘Organization of power brokers’

Hanson described his first two years at Fresno Unified as an exhausting time spent doing extremely necessary work for the city’s children. According to The Bee’s archived reporting, Hanson’s 80-hour work weeks won him the respect of a key demographic: Fresno’s business community.

The former superintendent credited business leaders’ concerns for the city’s children, in-part, for his initial desire to work in Fresno. Before Hanson’s arrival, a group already had created the “Choosing Our Futures” plan designed to save Fresno Unified.

Reporting by Fresno native Mark Arax, an award-winning author and veteran journalist, delved deeply into Hanson’s – and his top administrators’ – relationships with the city’s businessmen. Arax, an outspoken Hanson critic, noted in his reporting that the former superintendent was a member of the Fresno Compact during the time he led Fresno Unified. The group is dedicated to “mobilizing business and community support for local K-12 and higher education institutions,” according to its website.

Also in the “organization of power brokers,” as Arax’s writing describes the compact, was Valley Children’s CEO Todd Suntrapak and Michael Spencer, president of Harris Construction. The owner of the firm and Michael Spencer’s father, Fresno-area construction magnate Richard Spencer, spent about $30,000 helping pass Measure Q, a $280 million school construction bond initiative for Fresno Unified that voters approved with 76% of the vote in 2010. (Spencer was also known as a key financial contributor to the election campaigns of some school board members.)

It was not a secret that Hanson had allies in the Fresno business sector. In 2011, Fresno Unified faced criticism over its issues with habitual truancy. These stats were published in a series of stories in The Bee reported by Arax’s Fresno State journalism students after the stabbing death of a teenager named Junior Villarreal outside of Sunnyside High School.

According to the reporting, the district’s administration blocked community attempts to have the city government address the truancy issue, citing that a partnership to curb the problem already existed between Fresno Unified and the Fresno-Madera United Way. But Yvonne Freve, then the local United Way’s vice president of community impact, told reporters at the time that Hanson made that partnership difficult, promising to participate only if Fresno Unified received no blame for the truancy problems.

Other potential partners didn’t “want to risk the backlash from Hanson’s friends in the business community,” Freve said in 2011.

To Arax’s sister, Michelle Asadoorian, a former school board member, the former superintendent was a puppet master. She once wrote in an op-ed in The Bee that Hanson controlled four trustees who “vote the way he wants them to vote” without question.

In a May interview with The Bee for this report, Asadoorian recounted that Hanson “reigned with a great deal of fear” and was “a very transactional superintendent.” She said he was adept at getting board members on his side, often promising projects in their respective regions.

“ ‘But you owe me,’ ” she said of what Hanson would require in return.

Fresno Unified’s lease-leaseback contracts

Fresno Unified’s use of the lease-leaseback method of construction contracting for a project in 2012 ultimately prompted the federal investigation and a civil suit that remains without a definite conclusion today. Lease-leaseback allows a school district to lease a property to a contractor, who builds on it and then leases it back to the district over time – all without a traditional competitive bidding process. It helps cash-strapped school districts accomplish construction projects when they do not have enough money to pay for them up front.

In September 2012, the district officially awarded Harris Construction a $36.7 million lease-leaseback contract to build Gaston Middle School in southwest Fresno.

Soon after the Gaston contract was awarded, local contractor Stephen Davis sued Fresno Unified. He alleged that the district improperly awarded Richard Spencer’s firm with a no-bid contract because the payment for the building of Gaston Middle School was not carried out using the lease-leaseback method. The district had bond money to pay for the school’s construction upfront and should have bid-out that contract the traditional way, he argued.

By this time, even Hanson’s critics credited him with improving Fresno Unified’s financial position.

In 2014, after nine years as superintendent, Hanson was appointed to join the Valley Children’s Hospital Board of Trustees, the specific board that sets policy for its main hospital operation in Madera County just off Highway 41. At the time, Fresno Unified was in talks with different health care organizations in the region, seeking partners for the construction and operation of school-site clinics in Fresno’s most underserved neighborhoods. The first of those clinics opened in 2015 at Gaston Middle School in what was a major success for Hanson’s Fresno Unified district.

Zara Arboleda, Valley Children’s spokesperson, wrote in a May email to The Bee that Hanson’s appointment to the Hospital board made perfect sense: “He was the superintendent of schools at one of the largest employers in the region, focused on kids and education.”

Just months after Gaston’s clinic began conducting open house tours in 2015, the federal government launched an investigation – with the FBI involved – into whether Hanson’s school district had been improperly awarding no-bid, “lease-leaseback” construction contracts to Harris Construction and another firm, Bush Construction.

‘Are you pro-Hanson or anti-Hanson?’

The federal subpoena of the district related to the investigation did not identify anyone by name, but Hanson and his leadership team were responsible for directly overseeing the school district’s contracts, The Bee reported. The feds probed FUSD’s relationship with Harris Construction as allegations spread and criticism of Hanson intensified.

The district refused to hire an independent investigator for its own probe of the civil suit’s allegations against Fresno Unified. But The Bee’s coverage of the district’s legal troubles at the time outlined FUSD’s relationships, drawing information from emails between administrators and Harris Construction executives dating back several years before the launch of the federal investigation. Hanson’s critics began alleging that he “must have abused the leaseback process to make a sweetheart deal with Richard Spencer,” The Bee reported in late 2015.

The emails from 2011 referenced lunch dates hosted by Michael Spencer with Fresno Unified officials as he invited them for wine and to the CRU Club, an indoor restaurant at Chukchansi Park sponsored by Spencer’s father’s Madera-based wine company, Cru Winery.

Hanson, the Spencers and former Fresno Mayor Ashley Swearengin celebrated the passing of Measure Q on Aug. 12 of that year at Chukchansi Park with the “FUSD Night at the Grizzlies” event, The Bee reported.

With the FBI probe and continual press coverage, public criticism of Hanson seemed at a high. At one point, former FUSD School Board member Brooke Ashjian, an avowed Hanson critic, removed the former superintendent from his traditional seat in the center of the school board’s dais during meetings, instructing him to instead sit at the edge.

Ashjian tore into Hanson when the former superintendent admitted to using a phone application that automatically erases any record of text messages. Hanson said the use of the “Cyber Dust” app was within district policy and had nothing to do with the subject of the probe.

“For a district official to have that on their phone and communicate with other district officials and hide it from the public is appalling, is illegal and is grounds for dismissal in my mind,” Ashjian told The Bee in 2015.

Hanson explained the use of the app as a “trial run to see if it would help us do our work better and more effectively.

“And it didn’t,” he said then. “Nothing we used it for had anything to do with things that are now the topic of the grand jury investigation, and the use of this app will be fully disclosed when we turn over and disclose all of our documents.”

Hanson had become a “campaign issue” by the following year, trustee Elizabeth Jonasson Rosas told The Bee in May for this profile. She was elected to the school board in November 2016.

“Some people had drawn a line in the sand: ‘Are you pro-Hanson or anti-Hanson?’” she remembered.

Soon after, Hanson announced he would be stepping down by the start of the following school year. He told reporters his decision had nothing to do with the FBI probe.

“I’m not running from a damn thing, I’ll tell you that,” Hanson said at a press conference in December 2016, where he pledged to continue working on behalf of impoverished youth. “I’m going to stand here and do this work. You will find me for the rest of my career – wherever that is – in the intersection of race and social class.”

The embattled superintendent also acknowledged his critics.

“Unlike a whole bunch of other people in this city, for 12 years I have been standing right here … under lights like this, with cameras in my face, answering questions one after another about a whole slew of things and a whole slew of allegations – none of which have borne any fact,” Hanson said during the same press conference.

Even after he announced he would be leaving, calls by the Fresno Teacher Association became louder for Hanson to be fired immediately. A divided school board fired Hanson a month later in January 2017.

Davis, the school board trustee who has served continuously since 2004, told The Bee that criticism of the former superintendent stemmed from politics on the school board and people’s discomfort with change.

“Mike Hanson did what was right,” she said in June in an interview with The Bee. “Fresno had never really had anyone that truly held a mirror and really spotlighted what was going on.”

She said he held people accountable and made reforms still utilized by the school district today. To the disappointment of the teachers union, Hanson received positive reviews on his job performance as superintendent from most school board trustees even during the years when criticism of him was at its peak. Davis noted that Hanson is a family man whose children attended Fresno schools, and he worked so hard that she had to insist he take days off so he could help coach them in sports.

“He always thanked me for insisting he take some time for his family,” she said.

Hanson went on to found his own educational consulting firm and moved to Sacramento County.

In 2019, after serving on the Valley Children’s Hospital board for five years, Hanson was elected to the Valley Children’s Healthcare board, the governance group that oversees the nonprofit’s entire network. Last year, Hanson ascended to the position of chairman of the Healthcare board, with his current term running through the end of 2025.

Setting Valley Children’s executive pay levels

In recent years, the Healthcare board gave Valley Children’s executives compensation packages that have been criticized as excessive for a nonprofit children’s hospital in the San Joaquin Valley. In 2020, Suntrapak, Valley Children’s CEO, received total compensation of $2.1 million. In 2021 and 2022, the CEO’s compensation surpassed $5 million. He also received a $5 million forgivable loan to purchase a home in 2022.

That same year, Suntrapak bought a $6.5 million home in Carmel-by-the-Sea, a beach town where household income is more than 37% higher than it is for the rest of the state and that is located three hours away from the Fresno-Madera area. The CEO already owned a home in north Fresno valued at $1.7 million. It’s unclear whether he used the forgivable home loan that the hospital gave him to purchase the beach town home.

Suntrapak repeatedly declined interviews with The Bee to discuss his compensation in the weeks that followed initial media coverage of his compensation.

The Bee has attempted to contact Hanson through his Sacramento County Office of Education work email, at his home in Sacramento County and through Arboleda, the Valley Children’s spokesperson. Hanson has never responded to requests for an interview. He has only provided explanations for Suntrapak’s pay through prepared statements, one of which was a letter Valley Children’s sent to its critics on the Fresno City Council.

In that letter, he explained the compensation figures as the result of a “one-time accounting adjustment” that doled out two bonuses in one year. Hanson also said that the nonprofit’s $5 million forgivable home loan to Suntrapak is not an uncommon method for keeping executives from leaving an organization for another job.

Valley Children’s latest IRS filing concerning compensation shows that Suntrapak’s total compensation dropped to $3 million in the 2023 tax year, as the hospital had previously said it would. That tax filing, which the hospital publicly posted in August, also shows Valley Children’s spending on sophisticated life insurance benefits for executives doubled to $52 million from 2018 to 2023.

Harris Construction’s work for Valley Children’s

Valley Children’s has multiple construction companies that bid on hospital projects around the region. Harris Construction is one of them, though Arboleda said during a follow-up phone interview that the firm is one of its smaller contractors – small enough that payments to the construction firm are not required to be listed on Valley Children’s nonprofit federal tax filings.

The Spencer family’s Harris Construction was the general contractor for at least three Valley Children’s projects in the past 10 years plus a planned project in Merced that was delayed by the COVID-19 pandemic. Susan Byers, a member of the Spencer family, is also a member of the Valley Children’s Hospital board.

Arboleda said that Valley Children’s board votes on projects, but that the bidding and contracting process is handled by the nonprofit’s construction and facilities teams, not by any of the governance boards. This means that neither Hanson nor Byers have anything to do with picking a contractor for Valley Children’s projects, she said.

‘Was it worth it?’

The feds concluded their investigation into Fresno Unified’s relationships with Harris Construction five years ago with no charges filed. But the civil suit against the district over the firm’s contract for the construction of Gaston Middle School first filed 12 years ago by Stephen Davis, the local contractor, remains without a definite conclusion.

Last year, a California Supreme Court ruling upheld that suit, concluding that Gaston’s construction was not funded using the lease-leaseback method, which meant it should have been subject to a traditional bidding process. Instead, “the underlying project was fully funded by a prior sale of general obligation bonds,” a judge wrote. The court remanded the suit to a lower court so litigation could continue.

Davis, the long-time school board member, said that despite the dramatics surrounding the construction scandal, the school district under Hanson was able to improve outcomes in the city’s poorest neighborhoods.

Before Gaston was built, children in that community – “the neglected west side” – were being sent to 16 different schools, she said. To her, Fresno City College might not have built a west side campus if Gaston had not been constructed in that neighborhood. She also said the school laid the foundation for future housing construction there.

“He built a school so that the children in that community could stay in that community and have a school,” she said of Hanson. “The big controversy around it, was it worth it? I think it was.”

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Former Fresno Unified School District Superintendent Michael Hanson gets a hug from a well-wisher after he announced his resignation in December 2016.

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