Background: This investigation uncovered the laissez-faire attitude displayed by New Jersey state and local education officials that has led to egregious violations of the laws governing school bus safety, particularly among private bus contractors. Our team found cases of known drug users, unlicensed drivers and, in one case, a convicted sex offender driving a school bus — all against state law.
In the days after this story published, the New Jersey Attorney General’s Office filed charges against one of the companies we highlighted.
The light was red, but school bus driver Lisa Davidson hit the gas anyway.
She was the only person on the school bus, late in the afternoon of Feb. 12, 2018. The din of rambunctious children had been replaced by the radio, playing Joe Cocker's rendition of the Beatles' "With a Little Help from my Friends."
Driving down Tuckahoe Road in Monroe, Gloucester County, Davidson maneuvered the bus around two cars and into the left turn lane, accelerating as she crossed into the intersection with Glassboro Road.
The light was still red.
At 4:11 p.m., the bus plowed into the side of a Honda Accord as Harry McCracken — with a green light — had just begun to turn left. The impact sent both vehicles careening in different directions.
It was Davidson’s third school bus crash in four years, and her second while driving a bus for Student Transportation of America, according to court documents.
Only this time, someone died.
"This wasn't an isolated incident. It wasn't an unexpected accident," said Bob Zimmerman, an attorney who represented Brenda McCracken, Harry’s wife, who won a $7 million settlement with STA after her husband’s death. "I mean, this happened with the driver many times before, you know?
"And unfortunately, something like this had to happen before she was pulled from the road for good."
STA has never commented publicly about McCracken's death and declined to comment on the crash, but Davidson’s story isn't isolated. It's the result of a lax system that allows school bus contractors to put other drivers — and children riding to and from school — in danger.
An investigation into those private contractors by the Asbury Park Press, part of the USA TODAY Network Atlantic Group, a consortium of 36 news sites in five states, has revealed loopholes in incorporation, inspection and public contract laws that allow dangerous bus drivers to stay on the road, school boards to award million-dollar contracts to questionable private companies, and toothless enforcement by state regulators that have let such companies continue doing business after serious, even deadly, safety incidents.
The system of bus inspections and background checks to ensure that children are safe when they step onto a school bus is inherently flawed, the investigation found. It is designed to catch issues with drivers and bus operators who agree to play by the rules. But it does little to stop operators who skirt the rules.
Companies that aren't forthcoming with the state — such as hiring a driver with a criminal record but not listing the driver on the required paperwork — can go largely unnoticed.
While the Network has investigated school busing issues, including the failure to do proper background checks on drivers, at various times since the mid-2000s, little has changed. However, in the new COVID-19 world of school and transportation, the stakes are even higher when it comes to bus safety.
The major findings by the Network investigation include:
New Jersey issued an average of eight safety violations for every bus inspected by surprise, compared with one violation for every 345 buses issued during a pre-announced inspection in 2019. But the state inspects only about 100 school buses per year via unannounced inspections, compared with 47,000 buses during pre-scheduled inspections.
Those surprise inspections have turned up drivers without proper licenses or endorsements, those with suspended licenses and more serious charges, including a wanted sex offender who allegedly failed to register his address under Megan’s Law requirements.
Since 2017, over 3,000 drivers with an “S” endorsement — a required certification to drive a school bus — have been disqualified from the job after receiving that endorsement.
About 10% of those disqualifications were due to a criminal charge.
The motor vehicle “points” system still allows drivers with a history of unsafe driving — including school bus crashes — legally behind the wheel of school buses, since points expire over time.
State agencies routinely point fingers at each other when it comes to enforcement of school bus safety laws, creating a “spider web” of enforcement that lets dangerous bus drivers — and the companies that hire them — off the hook.
“Rogue operators” often rename their companies to retain lucrative taxpayer-funded contracts despite troubling safety reputations. One company, which was later charged with covering up its practice of hiring unqualified drivers with criminal records, reincorporated at least 21 times.
New Jersey law gives school districts little leeway in rejecting iterations of those “rogue contractors” if the new company offers the lowest bid.
Since 2014, at least 40% of safety violations have been dismissed by prosecutors in municipal courtrooms, where most motor vehicle cases are handled.
After the fatal school bus crash that killed a Paramus student and teacher in May 2018, state Sen. Joseph Lagana, D-Bergen, sponsored new school bus safety laws designed to keep bad bus drivers off the road.
When told about the Network's findings, he pledged to look into further regulatory changes and bring in the Attorney General's Office on any criminal wrongdoing.
"The issues that we have seen since then, with the private companies, I guess the bad actors that are doing those things that you discovered — we weren't really aware of it at the time," he said.
"These are things that we may already have the right laws in place, but they're just not being enforced the right way," Lagana said. "Or there's not enough infrastructure within state government to actually track and monitor these people."
How many school bus drivers? Agencies can’t say
State agencies could not provide answers to basic questions, such as an estimate of currently employed bus drivers. A manual accounting of thousands of pages of 2019-20 bus driver rosters estimated that nearly 60% of the more than 14,000 of them on the rolls work for about 300 contractors. And according to state Motor Vehicle Commission data, contractors are far more likely to break school bus safety laws than public school districts are.
But that 14,000 number is likely unreliable. The bus rosters, provided by the Department of Education, are required to be submitted to county superintendents, along with background checks and driver history records.
Rosters provided to the Network by the DOE through a public records request were clearly incomplete, with all of Salem County and numerous well-known operators noticeably absent, for example.
While a list on the DOE website names at least 1,300 school bus contractors, a closer review of that list shows several that are just subsidiaries of a larger, overarching company. DOE spokesman Michael Yaple said the department deals with about 500 private bus contractors.
Complicating matters is a nationwide shortage of bus drivers that puts more pressure on districts and private companies to keep their driver rosters filled. In a 2018 survey of school districts and private bus companies published by School Bus Fleet magazine, 24% of respondents categorized the shortage as "severe" and 36% said it was "moderate."
In 2008, the Department of Education reported nearly 90,000 drivers with an "S" endorsement. By early 2020, the number of S-endorsed drivers had dropped to 32,600, according to the DOE.
Meanwhile, New Jersey taxpayers shell out an estimated $1.5 billion annually in school transportation costs, predominantly to private bus contractors.
The driver shortage is compounded by the coronavirus pandemic, which has seriously injured or killed more seniors than any other age group. And it’s that age group most likely to seek a job as a bus driver, said Evie Wills, administrator of the New Jersey School Bus Contractors Association.
The pressure of operating a bus company during a bus shortage and a global pandemic could lead to further incidents by those companies the NJSBCA identifies as "rogue operators," Wills said.
"We may find that less responsible contractors come through this more successfully than the contractors who do everything right," she said.
The DOE did not make interim Commissioner Kevin Dehmer available for comment or to answer questions on the Network's findings.
When asked about the findings, Christine Lee — a spokeswoman for Gov. Phil Murphy — said the bills after the crash "closed loopholes and raised the safety standards for school buses and school bus operators in New Jersey."
"He remains committed to the safety of New Jersey’s children and educators and will continue to prioritize important school bus safety reforms," she said of the governor.
But a number of examples uncovered by the Network show that those reforms may not go far enough.
In Newark, a woman drove a school bus with children across an intersection while overdosing on heroin. In Lakewood, a school bus rear-ended another car while the driver, in his fourth school bus crash in two years, felt the effects of the painkiller oxycodone.
One school bus company in Wallington, in Bergen County, dissolved after it was sued for allowing a 14-year-old student with special needs to open the emergency exit door, falling to her death. But the former manager of that company continued holding contracts in other school districts under different names, with school officials unaware of the connections.
‘Small number’ makes school bus industry look bad
The NJSBCA argues that companies that don’t play by the rules unjustly make the entire industry look bad.
"If you look at the numbers of school bus operators in the state, they're a small number," Wills said. "But their impact is huge. The 99% of operators who are having a successful day transporting students don't make headlines. The one who makes some mistake — whether it's an accidental mistake or negligence mistake — they get the headlines.
"That impacts all of us greatly, that it creates a perception that is really not fair."
Scenarios like this persist in part because the civil penalties for violating school bus safety laws are paltry, those in the industry say. Penalties for bus companies putting unlicensed drivers behind the wheel cap out at $25,000 for repeat violators, but charges that bus companies didn’t keep proper records of its drivers come with only a maximum $500 fine, under the School Bus Enhanced Safety Inspection Act.
"The folks who are doing inspections down in the trenches are aware of some issues, but this is something that is just reaching the higher levels," said Sue Fulton, chief administrator of the Motor Vehicle Commission. "This has probably only risen to the top in the last six to nine months.
"You've helped us identify another area that could be improved for safety," she added. "It's something we started to work on about six months ago, but it’s gone slowly."
The Department of Education declined to make any officials available for interview or answer numerous questions about the Network's findings. Yaple, the DOE spokesman, said the department wouldn't comment on possible or pending legislation, and referred questions on "needed legislation" to lawmakers.
And with some counties dismissing as many as two-thirds of those fines, the School Bus Enhanced Safety Inspection Act has become another example of some officials’ nonchalant attitude toward school bus safety.
The finger-pointing has left parents and children stuck in the middle.
Stacey Thomson, a parent of a 7-year-old Brick student, was surprised by the Network's findings. Thomson, 38, had her own issue with one of her daughter's bus drivers, who she said routinely ran stop signs, yelled at children, "drove too fast through the neighborhood and hit the curb a couple of times."
But when learning of incidents in which drivers crashed school buses while on drugs and cases of companies hiring drivers with criminal records, she was afraid for the children on board.
"Drug addicts and convicts should not have such easy access to [bus driver jobs]," Thomson said. "What if one relapsed and did drugs before driving them to school and crashed, injuring people and kids? Or a convict loses their temper with a rowdy child on the bus?
"I believe everyone deserves a fair shot — drug addict or convict — but not when it comes to handling children. There are plenty of other jobs for them."
In light of the Network’s findings, Fulton, the MVC administrator, has called on policy makers for increased sanctions to deter private bus contractors from putting unqualified drivers behind the wheel.
"All we know is if a person holds a school bus endorsement. We don’t know if that person is actively driving a school bus today. We don’t know if they’re employed. We don’t know where they’re employed," Fulton said. "It is a bit of a spider web to try to get the action down to the level where it makes a difference."
School bus problems have been lingering for decades
On a snowy day in February 2019, a security camera caught a mini-bus creeping across an intersection in Newark, crossing through four lanes of traffic on Jones Street and coming to a stop against a small tree on the other side of the street.
What the footage didn’t show was the driver, Newark resident Lisa Byrd, overdosing on heroin. Nor did it show the dozen special needs students on board.
At the time of the crash, Byrd didn’t have an S endorsement and was qualified only as a bus aide. Byrd pleaded guilty to endangering children by neglect and was sentenced to five years' probation.
Neither Byrd nor her public defender could be reached for comment.
After the crash, Ahmed A. Maghoub, the owner of the private bus company F&A Transportation, which employed Byrd, told reporters that she chose on her own to drive the bus and was not authorized by the company.
F&A Transportation, with buses based in East Orange, originally was incorporated in December 2004, according to public records. Maghoub’s wife, Faiza Ibrahim, was added to F&A’s incorporation paperwork as the registered agent, a person who accepts correspondence on behalf of a company, in November 2006.
Attorney Stephen Berowitz, who is representing F&A Transportation in Municipal Court citations pending in the wake of Byrd’s crash, confirmed that Maghoub is "involved" in F&A Transportation, but declined to say how many other school bus companies he either owns or is involved with operating.
Business incorporation records also link Maghoub and Ibrahim, who lived in East Hanover, to two other companies, F and A Enterprise Employee Leasing, established in 2016, and Smart Union Inc., a school bus company incorporated in 2013 that has public school contracts in Essex County.
Reporters from the Network visited an address listed for F&A Transportation and found school buses and other vehicles with names of a half-dozen other school bus contractors.
Byrd’s case wasn’t F&A Transportation’s only run-in with MVC inspectors. On Feb. 8, 2019, one of its drivers was caught driving without a commercial license during a surprise MVC inspection at The Allegro School, a Hanover Township school that specializes in programming for students with autism.
The company pleaded guilty on Feb. 25, 2019 — as investigators were alleging dozens more school bus violations at its facilities — and paid $2,539 in fines and court costs, Municipal Court records show.
F&A Transportation was cited eight more times in 2019 for failure to maintain school bus records. A prosecutor in Warren Township dismissed one of the tickets, stemming from a March 7, 2019, inspection, as a part of a plea deal.
A ticket issued on Aug. 23, 2019, resulted in an MVC inspection days later where the agency's staff claimed six more violations of rules for maintaining school bus records. In all, F&A was cited more than 80 times in 2019, the bulk of which came after the Byrd crash. Most of those citations are still pending in East Orange Municipal Court.
Berowitz said that "almost all" of the summonses issued to the company and its drivers during inspections after Byrd’s crash were for allegations of improper record keeping. He said the company and the drivers are not guilty.
Of the three citations from 2019 that made their way through municipal courts, F&A paid $2,539 in fines and court costs. By comparison, F&A had a $1.9 million contract with the Paterson School District in 2019, just one of a number of contracts the company has.
Berowitz said he was not aware of the Feb. 8, 2019, incident, three weeks before the Byrd crash. He said the company does not allow drivers to operate school buses without proper credentials.
"They have licensed school bus drivers. At all times they are operated by properly licensed drivers with the one exception I am aware of being Lisa Byrd," he said.
On Oct. 8, 2020 — two days after the Network published its investigation — the Attorney General charged Mahgoub and Ibrahim with theft by deception and contract fraud, alleging that they knowingly hired people with criminal histories and substance abuse as bus drivers.
Background checks and driver abstracts were routinely ignored, the Attorney General's office alleged: Only nine of more than 50 employee files were complete and up to date, the office announced in a news release.
School bus industry ‘can’t have any bad apples’
NJSBCA secretary Courtney Villani, president of the Villani Bus Company, likened it to a Chris Rock joke: While every job or industry may have "a few bad apples, some jobs can't have any bad apples."
With more New Jersey school districts set to open their doors in the coming weeks, school bus drivers employed by public school districts, private schools and private bus contractors will be required to enforce mask-wearing and maintain social distancing on buses to curb the spread of COVID-19.
The issues of bad drivers behind the wheel aren't a new concern. In 2006, a legislative Commission on Business Efficiency of the Public Schools released a report that discussed the possibility of — but did not formally call for — a "hot list" of drivers fired with cause that would be circulated to districts and contractors.
Later, the commission discussed maintaining a record of bus companies with a history of crashes, said former state Sen. Joseph Doria, who was the chairman of the commission and later led the Department of Community Affairs.
When told about the findings of the Network's investigation, Doria said he wasn’t surprised: "These have been problems going way back," he said.
"The private bus companies didn't do the kind of background checks that the school systems had to do when they ran their own bus systems," Doria said.
The "hot list" concept came with a cost of state officials monitoring bus companies and drivers and — eventually, Doria hoped — completing background checks of potential drivers, instead of taking companies at their word.
But the commission’s 2006 report recommending these changes was its last. In former Gov. Jon Corzine’s 2007 budget, funding for the commission was cut entirely.
"There was never any follow-up by anybody," Doria said.
Bad inspections are ‘the cost of doing business’
The MVC inspects both school-district-owned bus fleets and more than 1,200 private bus contractors.
In 2019, the MVC issued nearly 1,100 violations to both bus drivers and the bus operators who employ them, according to a report the Network obtained in a public records request. While the commission is required to inspect every bus twice per year for scheduled inspections, the vast majority of violations — about 86% in 2019 — come from the MVC’s monthly unannounced inspections.
The agency conducts about 100 surprise inspections on school buses each year. Inspectors often conduct the surprise inspections at places where they know many different buses will be, like field trip venues or specialized schools that draw students from many school districts.
Comparatively, the MVC inspected more than 47,000 buses in 2019 as part of its mandated two inspections of each bus per year. Officials said those scheduled visits leave little time for MVC staff to conduct more surprise inspections, which often capture more egregious violations.
It’s simple, Fulton said. When bus companies know inspectors are coming, they clean up their act.
During unannounced inspections, MVC staff often find drivers whose names weren’t on the company’s driver rosters when inspectors came for their scheduled visits.
The twice-a-year schedule by which school bus inspections occur allows for companies to operate for months at a time without fear of enforcement.
"If we show up, and they don’t expect to see us, we see drivers who are not properly credentialed getting into the driver's seat," Fulton said.
The Network reviewed all of the MVC's school bus inspection reports and memos in 2019, which detail the lengths taken by school bus companies and drivers to avoid facing penalties from the state.
At a surprise inspection May 31, 2019, at Donald Payne Technology School in Newark, MVC inspectors said they found one A-1 Elegant driver who had been driving on a suspended license and failing to provide records or documentation for the bus, including the required pre-trip inspection report. That same driver was arrested shortly after the inspection after a background check revealed he was a convicted sex offender, wanted on charges that he didn’t register his address, per Megan’s Law requirements.
A-1 Elegant was issued a summons for allowing him to drive a commercial vehicle. The company would later be charged by the Attorney General’s Office with failing to conduct criminal background checks.
That case is still pending. Joe Rotella, the attorney representing A-1 Elegant owner Shelim Khalique, declined to comment.
Six months later, the MVC made an unannounced inspection at two adjoining schools — Norman A. Bleshman School and Washington Elementary — in Paramus, where inspectors claim they recognized one driver, Genesis Gonzalez-Estrella, as one they had cited in the past for driving without the proper license.
When inspectors confronted Gonzalez-Estrella, they say, she gave a false name — Maria Rodriguez — and sped off. They called the dispatch office at private bus contractor R&V, her employer, and demanded that both the bus and Gonzalez-Estrella return for the inspection.
"Another driver showed up and admitted that she was not the driver from earlier," according to a memo following up on the inspections. "The company was contacted again and advised to send the driver who had left the inspection. The driver never arrived."
Gonzalez-Estrella later pleaded guilty to failing to possess a driver's license, failing to possess a CDL and failing to make records available, according to Municipal Court records.
Inspectors also found a bus from First Student, another private bus company, with its check engine light on and two more drivers who did not have proper licenses to drive school buses, according to an inspection report.
One of those drivers, whom investigators identified in their memo as Wilson O. Camden, was behind the wheel of a school vehicle for Gentle Ride Medical Transportation, another private bus company.
Gentle Ride’s owner told investigators he didn’t know why Camden was driving students.
The owner stated that Camden "was in the process of filling out paperwork and had not been hired by him," the memo said.
While public school districts are also cited for violations during inspections, MVC Administrator Fulton said the vast majority of violations are issued to private school bus companies — who will easily absorb the civil fines associated with a bad inspection as the "cost of doing business."
The School Bus Enhanced Safety Inspection Act, which makes up the framework of MVC inspections, specifically says that fines have a maximum cap of $500 for violations under that statute, including malfunctioning equipment and failure to keep or maintain records.
Fines can go even higher for those caught putting an unlicensed or unqualified driver behind the wheel of a commercial vehicle. Individuals caught driving without a commercial driver's license face fines starting at $500 and ratcheting up to $5,000 for repeat offenses.
Companies that allow people to drive commercial vehicles without proper credentials face fines up to $25,000.
But they’re easily absorbed by companies with contracts in the millions, Fulton said.
"These private companies are making enough money from the school boards that it's in their interest to continue to operate," she said. "The sanctions are not steep enough to keep them from continuing to do business."
‘They’re worried about the kids, and I don’t blame them’
On March 13, the last day before COVID-19 changed everything, nearly 50 school buses from various companies pulled into a parking lot in Eatontown in Monmouth County to drop children off at the Hawskwood School.
Immediately after the students disembarked, the buses underwent unannounced inspections by the New Jersey Motor Vehicle Commission, part of about 100 such inspections each year.
About a dozen MVC inspectors fanned out across the rain-soaked parking lot and asked drivers for their license, registration and paperwork they must fill out as they inspect their bus each morning, a state requirement for drivers before they take a bus out of the depot to pick up students.
MVC staff swarmed the buses quickly so drivers farther back in line can't fill out their “pre-trip” paperwork while they wait for their turn to talk to inspectors. Even then, some bus drivers try, inspectors said.
John Laug was one of those bus drivers whose buses were cited for further inspection.
"I had to switch buses this morning, because my bus’s lift was bad, and I didn’t fill out my pre-trip," a required inspection report filled out by a school bus driver before picking up students, said Laug, an 86-year-old driver for R&D Transit Services LLC.
"I made sure the bus was in good shape, but I didn’t fill out the paperwork. The bus is perfectly fine — everything is working — but if you don’t fill that out, it’s just as bad," Laug said. "I was wrong. What are you gonna do?"
And for a man who would later pay a $190 ticket in Eatontown Municipal Court, Laug was understanding of the MVC’s mission.
"They're worried about the kids, and I don't blame them," he said.
Prosecutors dismiss 40% of safety violations
Laug's violation was one of 14 issued that day — including one for a driver who did not have a commercial driver’s license and a second whose CDL was suspended.
But when school bus safety violations are processed, they face a high rate of dismissal by municipal prosecutors, the Network’s investigation found.
Since 2014, over 40% of all violations under the School Bus Enhanced Safety Inspection Act have been dismissed by municipal prosecutors, according to statistics from the New Jersey Judiciary.
In recent years, dismissals statewide are down while the numbers of violations have increased: In 2019, New Jersey courts dismissed less than 31% of the 544 cases it processed. In 2015, more than half of the cases were dismissed.
Counties prioritize school bus safety at different levels. For example, Essex County, where A-1 Elegant is based, dismissed over two-thirds of the school bus safety violations its courts handled in 2018. In nearby Morris County, only 27% of school bus safety violations were dismissed.
Statistics were not available for license violations — such as a school bus driver without the proper license or endorsement — because those statutes include other industries in addition to school buses.
Brian Mason, president of the New Jersey Municipal Prosecutors Association, said prosecutors reach plea bargains with most defendants. Though he said he had never come across a violation of the School Bus Enhanced Safety Inspection Act , he said New Jersey prosecutors often dismiss charges as part of plea deals to ensure that court proceedings aren't backed up.
Mason said he has prosecuted cases of unlicensed or unqualified drivers in a school bus — more in the last year than any time previously.
The high dismissal rates of school bus safety violations could be related to plea bargains by frequent violators, he said.
“If there’s 10 things wrong with a bus, most of these companies will hire an attorney. Then, it’s a matter of how you resolve cases,” Mason said. “If someone came to me with an equipment issue and an [“S”] endorsement issue, I’d dismiss the equipment charge and go for the endorsement charge. You’re talking about a much greater fine, which hopefully is a much greater deterrent.”
Both Fulton and the Department of Education declined to comment on the dismissals of school bus violations by prosecutors.
With this disconnect between the MVC and the courts, the only long-lasting damage private school bus contractors face is to their reputation. After too many crashes or too many state-issued violations, companies run the risk of losing contracts with safety-centric school districts.
"The contractors who fly right, do all their compliance, keep all their records, pay all their taxes, have a good fleet — they're the most expensive to operate," said Wills, administrator of the NJSBCA. "Then you have a prospective driver who's engaged in some sort of fraudulent or misinformed activity trying to get a job. And you have an employer who doesn't completely vet that employee and a school district who looks the other way.
"Some districts seem to act like all that matters is the low bid."
Whack-a-mole: Companies reorganize rather than clean up their acts
It was a sunny but chilly day on Jan. 2, 2013, as a K&M Transportation school bus transported Onynx Williams home from school.
As the bus turned down Riverside Avenue in Rutherford, Bergen County, Onynx, 14, got up from her seat, ran to the back of the bus, popped open the emergency hatch and fell out.
To get there, she had to run past a bus aide — just the one, not two, as was contractually required.
She died from her injuries days later.
Onynx’s parents would eventually file a federal lawsuit against K&M Transportation, the Paterson school district and the Bergen County Special Services school district. But by the time the parties settled — K&M Transportation’s insurance provider paid $1.3 million of the total $2 million settlement — the bus company had already dissolved.
At least, on paper.
As public officials repeatedly said K&M Transportation went out of business after the incident that caused Onynx Williams’ death, people connected to K&M Transportation had actually set up a new business incorporation — and kept winning school contracts with another district that serves students with special needs.
The former manager of K&M Transportation is associated with at least three more school bus companies and would continue to operate school buses — to this day — under the name Castro School Trans, LLC.
The corporate shell game played by K&M Transportation and its iterations is one of many stories of private school contractors who change names and flip ownership registration between family members’ names and addresses in order to avoid investigation by state authorities and to rid themselves of their poor safety reputation.
Even if school districts are aware of the school bus shell game, there’s little they can do. It's all perfectly legal.
New Jersey law allows school districts only a limited number of reasons to disqualify a vendor from bidding after having a prior negative experience with that company. A company can be disqualified from bidding on school bus routes for defaulting on a contract or after being found “nonperforming” in a formal hearing with the schools superintendent and the county superintendent.
Even then, a company can appeal the decision, and the ban from bidding can’t last longer than three years.
But there’s also a loophole in the law. The owner of a disqualified company could still bid under another company name as long as that person doesn’t own more than 10% of the new company — even if they play an active role in operating the new company.
That inherently presents problems, said Doria, the former state senator and community affairs commissioner: “When you’re taking the low bid, you’re not going to get that kind of careful review of the backgrounds, of the drivers or even the safety of the buses,” he said.
And the Network found several companies apparently taking advantage of this loophole by setting up companies in family members’ names, including the former manager of K&M Transportation, who is now the registered agent and listed under the "first board of directors" on Castro School Trans incorporation records.
Castro School Trans, whose headquarters are listed in Garfield, was established in August 2016 and held 23 contracts worth a combined value of $1.2 million with the South Bergen Jointure Commission, a special needs school district, for the 2019-20 school year.
What district officials didn’t realize until they were contacted by Network journalists was that Castro had ties to K&M Transportation, whose business records show it is owned by the same person: Khaled Fouad.
Yet there was nothing the district could have done even if it had known.
“If they are a company in good standing and they are the lowest bidder, we are obligated by the state of New Jersey to award them the contract,” South Bergen Jointure Commission Business Administrator Susan Cucciniello said.
"Bad actors sometimes are very smart," said Lagana, the state senator from Bergen County. "If they're 50% over at one LLC, they'll come on as a member of another LLC with 2% membership, and almost be a non-existing member. So, you know, we're gonna have to really wrap our heads around this and figure out how to make the laws and regulations a little more strict."
Between K&M Transportation and Castro School Trans, Fouad was associated with two different companies, the similarly named American 5 Star and American Five Stars, according to business records, both of which had contracts with South Bergen.
Castro School Trans formed in August 2016 under Fouad's wife’s name, Manal Hassan. In May 2019, Fouad was added to the company's first board of directors, according to business records. He became the company's registered agent in November 2019, according to records.
The business operates out of an auto repair shop in Garfield, where, on a recent day, multiple minivans with decals of the company’s name could be seen.
In an interview, Fouad denied any link between K&M Transportation and Castro School Trans. He was only a manager at K&M Transportation, he said, which was owned by Salah Hanafy. Fouad said Hanafy also owned American 5 Star.
But business records show that Fouad is listed as a director, an incorporator, a vice president or registered agent of all four companies — K&M Transportation, American 5 Star, American Five Stars and Castro School Trans.
As of September, Fouad’s LinkedIn profile still listed him as the "owner of K&M Transportation." A recent job listing for Castro School Transportation calls for employees who “enjoy working with little direction” at a rate of $600 per week.
‘Weak sanctions’ allow problems to persist
Fulton, the MVC administrator, said this elaborate game of whack-a-mole has continued due to weak sanctions. The penalties for a school bus company that put an unqualified driver behind the wheel should be severe enough to prevent the company from reopening, she said.
“If you put someone who’s not credentialed, who’s not qualified, in the seat of a school bus, you need to pay a significant price,” she said. “You shouldn’t be able to pursue a contract with another school district. You shouldn’t be able to just change the name, file a new LLC and continue doing business.
“The penalties are just not stiff enough.”
Perhaps no company is more representative of this elaborate game of whack-a-mole than A-1 Elegant Tours.
In June, the Attorney General’s Office charged the owner, Shelim Khalique, and manager, Henry Rhodes, with theft by deception, conspiracy, tampering with public records, false representations for a government contract and misconduct by a corporate official.
Khalique is the brother of Paterson Councilman Shahin Khalique, who owns his own school bus companies with contracts in Essex County. Shahin Khalique was not charged with wrongdoing by the state attorney general.
The Attorney General’s Office seized personnel files from A-1 Elegant in 2019, alleging that numerous drivers and bus aides didn’t have the proper license or endorsement, were driving on suspended licenses or had criminal records.
The company was accused of submitting false records and information to both the state Department of Education and the school districts that awarded contracts to A-1 Elegant Tours, particularly Paterson.
While the Attorney General's Office noted that A-1 Elegant had also been doing business as Eastern Star Transportation, the Network has linked the operation to at least 21 different names since 2005.
As recently as August 2019, according to Google, a sign on a brick building in Paterson identified it as the home of A-1 Elegant Tours. But just over one year later, that name was nowhere to be found. Instead, the building advertised "drivers wanted" for Eastern Star Transportation, which business records show is a different company also owned by Shelim Khalique.
Mini-buses from American Star Transportation were also parked around the property. American Star Transportation is owned by Khalique's brother Jwel, according to business records.
The companies are connected by eight different people — many of whom are related, public records show — and a dozen addresses in North Jersey.
“This bus company allegedly lied about its employees and equipment to secure contracts, and then had unqualified drivers, convicted felons, and those under the influence drive and supervise young children each day in what were frequently unsafe vehicles,” Attorney General Gurbir Grewal said in a statement after Shelim Khelique and Rhodes were arrested.
“This is an unconscionable case of contract fraud," Grewal said.
The case is still pending. Neither Khalique nor Rhodes has entered a plea. Khalique's attorney Joe Rotella declined to comment.
The Paterson School District was one of districts that previously contracted with A-1 Elegant. The district was finally able to ban A-1 Elegant in 2018 after it committed more than 100 contract violations, according to the district. The ban was lifted this year, while Khalique was under indictment.
Paterson School District spokesman Paul Brubaker said the district eventually got A-1 Elegant to agree to a two-year disqualification without going to a “lengthy hearing” required by the law.
“The statute should be amended, because it limits the options of local Boards in these situations,” Brubaker wrote in an email.
Bad drivers still end up on the road despite new, stricter rules
Every school year, school bus contractors are required to submit a list of bus drivers to county superintendents and local representatives of the Department of Education, including certification of a valid school bus license, a criminal background check and a driving “abstract,” a detailed history of their driving record.
County superintendents’ offices are required to review the bus driver rosters and abstracts to approve all school bus drivers.
But with drivers such as Lisa Davidson — who was involved in three school bus crashes in four years, the last of which killed another driver — freely given jobs, it’s unclear if that process is effective.
The Department of Education provided the Network with thousands of pages of school bus driver rosters, some filled out by hand, as part of an Open Public Records Act request.
The department said it didn’t maintain a complete dataset of active bus drivers, despite providing such information to the Asbury Park Press in 2008 as part of a public records request.
The DOE also declined to share drivers’ dates of birth to allow for the Network to compare the drivers to criminal records, citing privacy concerns. The department willingly shared dates of birth as part of the 2008 records request, however.
The rosters provided by the DOE were noticeably incomplete, without any rosters from Salem County and with multiple companies — such as A-1 Elegant and F&A Transportation — missing, for example.
The department declined to comment on how drivers with dangerous driving histories wind up on the road, despite review by county superintendents.
In addition to the six-point limit, school bus drivers are required to hold a commercial drivers’ license and an “S” endorsement on that license and undergo an annual medical exam.
There are some safeguards, however, built into the system.
School bus drivers for both school districts and private companies are permanently disqualified from the job if they've been convicted of a first- or second-degree crime, third-degree crimes such as making terroristic threats, burglary and criminal mischief, or any fourth-degree crime involving a minor.
If convicted of DWI, a driver's "S" endorsement is suspended for two years, or permanently if it occurs while transporting schoolchildren. A second DWI permanently prohibits the driver from getting behind the wheel of a bus.
A driver can also be permanently disqualified after a second offense of leaving a child unattended on a bus at the end of the route.
‘It’s hard to track’ bad drivers pulled from roads
Six nights a week, the MVC notifies the DOE of any new drivers with an “S” endorsement who have been newly disqualified from driving a school bus, be it for accumulating six motor vehicle points, a third violation in three years or a single disqualifying incident.
Within 24 hours, the DOE must inform the driver’s employer — school district or private bus company — of the disqualification. Within another 24 hours, the employer must confirm that the driver is off the road.
But these rules cover only convictions. Even if a driver is charged with a disqualifying violation, such as DWI, the Department of Education only notifies the employer of the arrest — without actually saying what charge the driver is facing.
Yaple, the DOE spokesman, said that process is spelled out by the law — which covers only “notification” and says nothing about identifying the charge.
Instead, school boards or contractors can perform their own investigation into what the charge might be — but it’s not required.
It’s through that process that more than 3,500 drivers with “S” endorsements were disqualified from driving a bus between 2017 and early 2020, according to a list of disqualified drivers obtained by the Network through a public records request, compared with 25,000 to 30,000 endorsed drivers, Yaple said.
The entire process is followed to the letter of the law, and no more — with agencies enforcing school bus safety laws as a formality, checking the box and moving on. The communication is done electronically, with little or no follow-up to ensure that bus contractors are being forthcoming with disqualified drivers.
Fulton said that follow-up is, “by definition,” the unannounced MVC inspections, which occur on only about 100 buses each year.
She called on school boards to monitor inspection reports by school bus companies with which they hold contracts. But she noted that not all districts have the resources to dedicate time to that level of follow-up.
“It can be difficult, depending on the level of resources in your school district, to know that the last time MVC inspected three months ago, so-and-so was a valid driver and then they were suspended,” Fulton said. “We send down the suspension that says this person can no longer drive.
“Do we know if there comes a day when that operator puts that person in the driver’s seat? It’s hard to track that.”
Hudy Muldrow’s driving record: How bad was it?
The gaps in communication cause other issues, as well. The Network has learned that the MVC contributed to a false narrative that Hudy Muldrow, the driver of a school bus involved in a fatal crash in Mount Olive in May 2018, was a dangerous driver with a history of license suspensions.
But that's only part of the story, the Network learned.
At issue was an MVC communications strategy in which only “bits and pieces” of information about Muldrow were released to the public, MVC spokesman William Connolly said. Muldrow was later sentenced to 10 years in prison for vehicular homicide.
While Muldrow’s license had been suspended numerous times in the preceding years, they were all due to parking tickets or a failure to complete a CDL-required medical exam.
Muldrow did have moving violations, mostly a series of red-light camera tickets between 2010 and 2014. The red-light camera program was discontinued in 2014 amid concerns that it changed driver behavior in more dangerous ways as they rushed to beat the light.
Muldrow was also charged with careless driving in 2009 and unsafe driving in 2003.
“By providing information in a format that was easily susceptible to misinterpretation, we inadvertently misled the public,” Connolly said. “Our poor communication led to a public focus on the wrong issues. As a result, we revised our Communications SOPs and practices, and restructured our organization to be more responsive and less opaque to the public."
Minor infractions such as parking tickets and missing paperwork are the most likely reason a school bus driver’s license is suspended or revoked, Fulton said. She said those violations mostly affect drivers “at the lower end of the income scale."
“They live in an urban area and can’t pay for parking, so this happens,” Fulton said. “There’s a misconception that a license suspension is because you’re a dangerous driver.
“The vast majority of cases don’t have to do with your driving.”
‘Shocking history’ before fatal crash
By the time Lisa Davidson was involved in a fatal school bus crash in February 2018, her employer — Student Transportation of America — was already aware of her checkered driving history.
In fact, the company had fired her two years earlier after she rear-ended another STA bus while children were on board. No charges were filed, but the family of one child sued STA and eventually settled for $15,000, according to court records.
In 2014, Davidson was involved in another school bus crash with damage, for which she was charged with careless driving and failure to show her license or registration in an accident that resulted in damage and failing to report the accident.
She was found guilty of careless driving and failing to report the accident. The charge of failing to show her license was dismissed.
"It is ridiculous that a company that is responsible for the safety of so many children would put somebody with such a horrific driving record on the road, not just for the safety of the children but for the safety of everybody else on the road," said Larry Bendesky, another attorney representing the family of Harry McCracken, who was killed in the crash with Davidson.
Student Transportation of America is the third-largest private bus contractor in the country, with a fleet of over 13,000 buses and 290 contracts, according to an annual information form submitted to the Securities and Exchange Commission in 2016.
STA wins contracts from small school districts in New Jersey — such as a $2.6 million contract with the Parsippany-Troy Hills Township School District — to the biggest districts in the country. In 2016, it signed a five-year, $52.5 million contract with the Los Angeles Unified Public School District, the second-largest in the United States. And in 2017, it was awarded a 10-year, $187 million contract in Duval County, Florida.
It held about $4.5 million in contracts with the Williamstown school district, including the route Davidson was working during the crash with McCracken’s vehicle after she was rehired by the company.
STA officials declined to answer questions about the Davidson incident or safety on school buses in general, instead providing a statement about its hiring practices.
“The safety of our employees and the students we transport is our highest priority, and it is the policy of STA to incorporate safety into each stage of the employee selection and retention process,” the company said in the statement. “We have many protocols in place to hire only the most-qualified drivers, and once a driver is employed by STA, commitment to safety is a condition of continued employment with the company.”
Despite three school bus crashes in four years, there was nothing illegal about Davidson driving the school bus in Monroe Township that day.
Many New Jersey school bus drivers involved in school bus crashes reviewed by the Network weren’t disqualified from driving. Like Davidson, they were legally allowed to drive a school bus despite a driving history of speeding tickets and school bus crashes.
Jay’s Bus Service, a private bus contractor with an estimated $20 million in contracts across Monmouth and Ocean counties — more than $12 million in Lakewood alone — has had multiple incidents involving such drivers.
In June 2017, Howell resident Mark Waldhelm was convicted of DWI after he crashed a school bus shortly after taking the opiate oxycodone, he told officers at the scene. It was his fourth school bus crash in two years, but he held zero points on his license at the time.
In December 2019, raw video of a Jay’s Bus Service bus driving up onto a sidewalk to get around traffic went viral. The driver, Yaakov Stern, pleaded guilty to reckless driving and his license was revoked. A charge of driving on the sidewalk was dismissed, court records show.
It was Stern’s second school bus incident in six months, after he pleaded guilty to obstructing passage. But he was originally charged with failing to obey a traffic control device, such as a red light.
Stern and Waldhelm were fired after the incidents, Jay’s Bus Service said at the time. Phone messages left with the company’s main depot went unreturned. Owner Joseph “Jay” Ellinson did not respond to requests for comment.
Points system flaw
At issue is the Motor Vehicle Commission’s “points” system. Points are placed on a driver’s license after certain motor vehicle convictions, such as speeding, running a red light or making an illegal turn. Under state law, a driver’s license is revoked if the driver accumulates 12 or more points at any given moment. For school bus drivers, the license is revoked after six points are accumulated or a driver is convicted of three moving violations in a three-year period.
But state law allows for as many as five points to be cleared from a driver’s license if the motorist goes a year without violations, including three points for a year without additional violations and two points for completing a defensive driving course. Five points is the equivalent of a speeding ticket and a red-light ticket, for example.
This could create a situation where, for example, a bus driver with several crashes and violations over the years can, in many cases, still legally drive a bus once motor vehicle points are cleared from their license — such as Davidson.
When her bus crashed into McCracken’s sedan, she had zero points on her license. The two points from a 2014 careless driving ticket had been cleared, and police didn't file charges against her for the 2016 school bus crash that injured a child.
Bendesky argued that STA should have gone beyond what was legally required, and not let her drive, anyway.
"It is incumbent upon private companies that transport students to have strict standards to make sure that the drivers who take those students all across the state every day have clean and safe driving records right now," Bendesky said.
The McCracken family filed suit in March 2018 alleging that STA "willfully disregarded the safety of school children and drivers in the community" by allowing Davidson to drive a school bus.
STA never filed a response to the lawsuit. In February 2019, the parties reached a $7 million settlement.
In November 2018, Davidson pleaded guilty to running the red light in the crash, a two-point ticket. Municipal Court records show she hasn’t been issued a violation since that incident, which means the two points have already been cleared.
That plea was entered with "civil reservation," which prevented her from being liable in the McCrackens' civil lawsuit.
Neither Davidson nor an attorney who represented her in the McCracken case responded to multiple requests for comment. It’s not clear now what Davidson does for work.
Her CDL lapsed shortly after the fatal crash in February 2018, said Zimmerman, one of McCracken’s attorneys, disqualifying her from transporting students, according to state law.
“Well,” Zimmerman said, “I hope she’s not driving a school bus.”