State officials are combing through the financial wreckage of the Maryland State Games to find out how much, if any, of more than $1 million in state aid received since 1988 is left.
Auditors from both the health department and the legislature are investigating the finances of the Maryland State Games Foundation, while the attorney general's office is investigating possible criminal violations, according to various officials.
Adele Wilzack, state secretary of health and mental hygiene, issued a statement last night saying there had been "serious deficiencies" in both the non-profit foundation and a related entity, the Maryland State Games Project, a small unit of the health department.
State grants received to the foundation "were not expended appropriately and necessary documentation to justify other expenses is presently unavailable," Wilzack's statement said.
The health department has awarded the foundation $490,000 in grants the last two years, department documents show.
A Howard County judge last week appointed a Baltimore financial services company to take over the foundation to prevent any improper use of state money.
James Narron, the head of both the private foundation and the state games project within the health department, "has engaged in widespread activities and has authorized repeated expenditures for questionable, improper and potentially illegal purposes," the department stated in its court filing.
The department has not described the alleged improper spending.
Narron and John M. Staubitz, former deputy secretary for operations in the health department, resigned from the health department last week after questions were raised about the games program and foundation. The foundation's office, on the grounds of Springfield State Hospital in Catonsville, closed last week.
Narron could not be reached for comment but he was quoted in The Sun today as saying his organization had spent all of its money on proper activities endorsed by state officials. However, Narron acknowledged that he was not a "detail" person.
Wilzack's statement said the state would interview all employees involved in the State Games Project.
Among the people working at either the foundation or in the health department were Christopher Hillman, Narron's brother-in-law; Bryant McGuirk, the son of former Sen. Harry J. McGuirk, one of Gov. William Donald Schaefer's closest advisers; and Michael C. Sabatini, son of Nelson J. Sabatini, the deputy secretary of the health department, according to various sources.
Narron helped launch the state games in 1985, while he was an official with the Howard County Parks Department. The games have grown each summer and this year attracted more than 3,000 amateur athletes from across Maryland.
The games were considered something of a bureaucratic plum just two years ago, as both the state health department and the Department of Economic and Employment Development jockeyed to take some credit, state sources said. DEED has given the program about $200,000 since 1988, state records show.
The state has frozen a grant of about $50,000 because of its own fiscal problems, said Michael Marqua, director of sports promotion for DEED.
Besides the $490,000 in grants to the foundation, the health department has budgeted at least $300,000 on the sports-games unit the last two years, legislative analysts said.
The health department grants came out of alcohol and drug prevention funds, expenditures that some drug-treatment experts questioned.
The legislature's fiscal analysts also questioned the health department's spending on the state games, saying in its critique of the 1990-91 budget that the program is not consistent with the health department's mandate. Analysts recommended killing the program, saying the money "could be better utilized to meet the identified health services needs of the citizens of the state."
Legislators also were skeptical about the project during this year's budget deliberations, but ended up approving the money after appeals from Wilzack and Staubitz, said Sen. Barbara A. Hoffman, D-City, a member of the Budget and Taxation subcommittee that considers the health department's budget.
"We thought the whole thing was questionable and we really gave them a hard time about it," Hoffman said. "I guess our instincts were right."
Besides the annual sports festival, the state games program helps pay for other programs, including midnight basketball in Prince George's County.
Narron's organizations have led the state's effort to host a U.S. Olympic Festival in either 1993, 1994 or 1995, a major sports event that would be expected to bring in large amounts of revenue. Maryland was selected as one of five finalists for the three events this fall, but state officials said privately yesterday the state's efforts were likely doomed by recent revelations about problems with the state games operation.
Don Porter, the chairman of the Olympic Festival committee, said this week Olympics officials "want to more know about the situation. If there is a problem, we want to know."
The State Games Foundation has declared itself a non-profit organization. But the Internal Revenue Service has no record of it actually gaining proper non-profit status, said Baltimore IRS spokesman Aaron Welch.