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Hanretty sentenced to two years in state prison for embezzlement from schools
• Former Portola Valley schools superintendent expresses 'extreme remorse' for wrongdoing.

by Barbara Wood

Tim Hanretty, former Portola Valley School District superintendent and Woodside Elementary School District finance officer, was handcuffed and taken into custody directly from the Redwood City Superior Court courtroom after being sentenced to two years in state prison on Oct. 22 for embezzlement and other crimes committed while working for the schools.

Looking on from the courtroom were officials from both districts who appeared somber, and in some cases close to tears, at the resolution to the case.

"This is a very difficult sentencing decision," Judge Mark Forcum said. He alluded to Mr. Hanretty's motive in the case. "Because you were angry at the school district for not better compensating you," Judge Forcum said, "you decided to take it upon yourself to embezzle" the money.

After the sentencing, Mr. Hanretty's attorney, Michael Markowitz of Danville, elaborated. He said Mr. Hanretty had asked for a loan of $100,000 from the Portola Valley district "and they turned him down." Faced with debts on a home remodeling project, "he very, very foolishly took things into his own hands," Mr. Markowitz said.

The judge ordered Mr. Hanretty to pay the full amount of restitution that the Portola Valley district has requested — more than $180,000, including $100,926 he admitted embezzling from the district plus its attorney, auditor and staff overtime costs. Still to be determined is exactly how much restitution Mr. Hanretty will be required to pay to the Woodside district.

Woodside has asked to be reimbursed $1,556,446 in loan interest and $1,968,000 in loan principal, plus $67,783 in attorney fees and $35,173 for an accountant. A hearing on Nov. 15 will determine the restitution to be paid to Woodside.

"I will be glad when the restitution is ironed out," Woodside Superintendent Beth Polito said. "We are also pursuing other venues to make us whole. We have an insurance claim and are negotiating with the lender."

After the sentencing, Portola Valley Superintendent Carol Piraino said she appreciates "the work that county counsel, the forensic auditors, and the District Attorney's Office did on behalf of the Portola Valley School District."

To date, Mr. Hanretty has repaid the Portola Valley district $120,926, and repaid the Woodside district $20,000. Mr. Markowitz, his attorney, said the amount was "all he can come up with at this time" and that he had borrowed it from family and other supporters.

Mr. Hanretty appeared grim during the hearing, but addressed the court calmly. "I stand before you today with extreme remorse for my acts of wrongdoing," he said, reading from a prepared statement. "I profusely apologize to everyone who has been harmed by my actions."

On July 31, Mr. Hanretty pleaded "no contest" to charges of felony misappropriation of public funds in Woodside and Portola Valley.

In Woodside he was accused of forging documents that allowed a loan of up to $3 million to be made to the district, despite the fact that the school's board had approved borrowing only $632,000. He eventually obtained a loan of $2.6 million, which district officials say was spent on school projects.

In Portola Valley further investigation found that Mr. Hanretty had turned in $100,926 in invoices for work on his own home, to be paid by the district's solar panel fund.

In return for the plea, the DA's office had agreed that Mr. Hanretty would serve no more than four years in state prison.

The misappropriation of public money was first discovered about a year ago when a Woodside school board member questioned the amount of debt service the district was paying. After an investigation uncovered the dubious loan, Mr. Hanretty resigned in January as the Portola Valley district superintendent, a job he began in August 2010. Before that, he had served as chief business officer of both districts.

Mr. Hanretty's attorney had asked that he be given only probation, while the DA's office had asked that he be sentenced to the full four years in prison.

Mr. Markowitz offered one explanation for Mr. Hanretty's misdeeds. "A gay man who's in the position he's in," and who has spent much of his life hiding his sexual orientation "has a very difficult time being forthright with the people he's involved with, he said.

"I am not a quitter. I never have been," Mr. Hanretty told the court before the sentencing, saying he planned to use his plumbing, electrical and other skills to start a home improvement business to earn money to pay back the districts.

That goal, it appears, will have to be put off for now.