Former Georgia School Superintendent Linda Schrenko, whose groundbreaking political career dissolved into erratic behavior and defeat, was indicted Wednesday on federal charges that she stole more than $500,000 in taxpayer money and spent part of it on cosmetic surgery.

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Schrenko, 54; her close friend and chief assistant Merle Temple, 56; and Alpharetta businessman A. Stephan Botes, 47, were named in an 18-count indictment that alleges they were involved in a scheme to steal federal education funds and secretly funnel about half the money to Schrenko's failed 2002 campaign for governor.

In addition, the indictment charges the Republican school superintendent used $9,300 of the money to pay for cosmetic surgery.

Schrenko acknowledged in November 2002 that she had had a face lift in recent weeks.

The federal funds purportedly were used to purchase computer services for two state schools for the deaf and the Governor's Honors Program, but officials say the services weren't delivered.

"The defendants attempted to cover up the scheme by filing false campaign disclosure forms, creating back-dated contracts, devising false cover stories and lying to state of Georgia auditors and to the public," said Sally Quillian Yates, acting U.S. attorney for the Northern District of Georgia.

She outlined the charges Wednesday at a news conference at the federal courthouse in Atlanta.

Wrongdoing denied

Schrenko's lawyer, Pete Theodocion of Augusta, said his client denies wrongdoing but will surrender to authorities on Monday.

"Without qualification, I can say she didn't steal any money, period," Theodocion said. "We think that's going to come out during the course of the case."

Temple's lawyer, John Garcia of Augusta, declined to comment, saying he had yet to review the indictment. Temple also is expected to surrender Monday.

Botes was arrested Friday and released Tuesday after posting a $200,000 bond that was secured by his home at Country Club of the South, said his lawyer, Howard Weintraub.

"When all the facts are presented, we feel confident that it will be demonstrated he has done nothing wrong, and he certainly hasn't done anything illegal," Weintraub said.

Cathy Henson, who was chairwoman of the state Board of Education in 2002 and questioned Schrenko's use of education funds, said she was "delighted" by the indictments.

"I think the taxpayers of Georgia won," said Henson. "The sweet part is that the process worked. Everybody should remember, as trite as it sounds, that nobody is above the law."

Henson said she became suspicious when she discovered Schrenko had directed her staff to issue a series of checks on the same day, July 24, in amounts just under $50,000.

Keeping the checks under $50,000 allowed the money to be doled out without Board of Education approval.

The Board of Education voided the contracts in November 2002 and asked for the money back, but by then, Schrenko was on her way out of office.

Ties to companies

A month after Schrenko left, the state auditor's office concluded she appeared to have violated several state and federal laws and regulations.

The indictment charges that Schrenko had the checks issued to various companies owned and controlled by Botes. The government alleges Botes then directed a subordinate to funnel about $250,000 to Schrenko, Temple and others to help the superintendent's campaign for governor.

Botes or his company kept some of the money, authorities said. Schrenko lost the Republican primary to state Sen. Sonny Perdue, who went on to win the general election.

Schrenko, Temple and Botes are charged with conspiracy, wire fraud and theft of public funds. Federal officials say conviction on the most serious counts could bring up to 30 years in prison.

The government also wants to be paid back $614,000, according to the indictment.

The money that the government says went to Schrenko's political campaign was not recorded in her campaign disclosure reports.

Richard Leonard of Augusta, Schrenko's campaign manager during her race for governor, declined to comment Wednesday.

$5,000 fine in 2003

Last year, the State Ethics Commission fined Schrenko $5,000 for failing to account for $19,355 in campaign contributions. The commission also wanted an accounting of the money, but in March of this year decided not to pursue the issue further.

At that time, Theodocion said Schrenko was "physically and financially in terrible shape." He rattled off a list of ills, from a ruptured appendix to neurological and back problems, including a "severe lumbar degenerative joint disease."

From an obscure educator in metro Augusta's Columbia County, Schrenko became a trailblazing figure in Georgia politics. In 1994 she became the first woman to win statewide executive office and the first Republican to be elected state school superintendent.

In that position, Schrenko found herself at odds with a state Board of Education appointed by a series of Democratic governors. Schrenko won re-election as school superintendent in 1998 despite a virtual Democratic landslide that year, and became a nemesis of Gov. Roy Barnes.

She crisscrossed the state to denounce the Democratic governor's ambitious school reform plans.

She battled the school board, which accused her of politicizing the superintendent's office and doing a poor job of managing the Education Department.

Eventually, Schrenko stopped showing up for board meetings, and during the final months of her tenure, staffers said they seldom saw her working at her $112,000-a-year job.

On Wednesday, Rusty Paul, former chairman of the Georgia Republican Party, said he listened in disbelief to news reports of Schrenko's indictment.

"I always felt she had a difficult time dealing with the political aspects of her job, but I never had a sense that there were any ethical issues involved," Paul said. "If this proves to be the case, it will be a big shock and surprise to people who worked with her in various capacities."

Paul said the state party had high hopes for Schrenko.

"She had a lot of support from the Christian conservatives in the Republican Party, both in her gubernatorial run and in her tenure as school superintendent," he said.

"I think it's probably just a total shock to them and to most of us in politics who have been around her."


- Staff writers Bill Rankin and Nancy Badertscher contributed to this article.