The Maryland State Games program used $4,500 in government drug-abuse prevention money to hire the band for a "thank-you" party Gov. William Donald Schaefer hosted for his staff last spring, the program's financial records show.
The payment was just one example of questionable spending found in a review by The Sun of health department records on the freewheeling State Games program, which had been charged with promoting amateur athletics as a means of discouraging young people from using drugs.
The records show that the program channeled more than $45,000 in public relations work to a Virginia firm headed by a friend of Deputy Health Secretary Nelson J. Sabatini, apparently without seeking competitive proposals from other firms.
The program also spent at least $500 with a computer business headed by a relative of James E. Narron, the dismissed director of the State Games, and another $12,000 to advertise in a
sporting magazine published by one of Mr. Narron's friends.
And with the written approval of former Deputy Health Secretary John Staubitz, the program awarded state jobs to at least two childhood friends of Mr. Staubitz's -- William R. Fairbank and Bryant M. McGuirk, a son of former South Baltimore state Sen. Harry J. McGuirk, who now is an aide to Governor Schaefer.
State Health Secretary Adele A. Wilzack, who has described the State Games effort as a good idea gone awry, recently disbanded the office after dismissing Mr. Narron and Mr. Staubitz -- formerly one of her most trusted aides -- amid allegations of cronyism and financial impropriety.
A criminal investigation of the program is being conducted by the state attorney general's office.
Ms. Wilzack refused to answer questions about the program last week, saying she would have no further comment until she reports to legislative committees later this month.
But a spokesman for Governor Schaefer said he was shocked at the source of the payment to an Annapolis band called the Admirals, which played at Mr. Schaefer's party at Martin's Crosswinds in Greenbelt to thank hundreds of executive employees for their work during the 1990 legislative session.
"The governor's staff was not aware of this -- absolutely not, no way," said Paul E. Schurick, Mr. Schaefer's press secretary. "If this is true, it is an abuse of authority and an abuse of funds."
Mr. Schurick said that all costs for the event were supposed to be paid from the money raised by selling tickets to all who attended, and that officials from several state agencies had helped to plan it.
"I remember very clearly that Mr. Staubitz stepped forward and volunteered to get a band," Mr. Schurick said. He said members of the governor's staff who later paid the bills apparently didn't notice that they never got one for the music.
The Maryland State Games, an annual sporting competition, had been run by volunteers using privately raised money until 1987, when Ms. Wilzack decided to hire Mr. Narron to run them as a state employee. Ms. Wilzack felt her department should be involved because the event helped to promote healthy lifestyles, Mr. Narron has said.
But by last year, the State Games program had grown into a far-flung operation that was hosting an international pingpong championship, financing a private fencing academy and trying to lure a surfing competition to Ocean City.
Mr. Narron has said that Ms. Wilzack was fully aware of the activities of his office, though aides to Ms. Wilzack have suggested that she delegated responsibility for oversight to Mr. Staubitz.
Ms. Wilzack has declined to discuss whether her friendship with Mr. Staubitz may have affected her ability to supervise the operations of his office. Mr. Staubitz often accompanied Ms. Wilzack at political fund-raisers. She was a frequent guest at an Ellicott City restaurant and lounge owned by Mr. Staubitz.
Ms. Wilzack has acknowledged that after hiring Mr. Narron to run the Maryland State Games, she later authorized her aides to award more than $400,000 in health department drug-abuse prevention grants to the private Maryland State Games Foundation -- which also was operated by Mr. Narron.
The funding arrangement meant Mr. Narron could spend the grant money without competitive bidding or other approvals normally required for state spending. Mr. Narron was the only person who could write checks from the private foundation's account, according to legislative auditors.
It was through the private foundation that the State Games paid the bills for the band at Mr. Schaefer's party and for the public relations, computer and advertising fees. All of the money spent on the governor's party and the computer and advertising fees came from the drug-abuse grants, health department auditors found. Most of the money paid to the public relations firm came from the same funds.
Officials at the Borden Group in Alexandria, Va., said last week that Deputy Secretary Sabatini mentioned the firm to Mr. Narron, and that company president Enid Borden is a friend of Mr. Sabatini's.