Angry Schaefer orders review of awarding of lottery contract

May 22, 1991|By John W. Frece | John W. Frece,Annapolis Bureau of The Sun

ANNAPOLIS -- Gov. William Donald Schaefer said yesterday he would order an independent review of the process used in awarding a lucrative new state contract for lottery computers and terminals to assure the public that the process was not politically tainted.

Reacting angrily to newspaper stories that appeared in The Sun and Washington Post last weekend detailing the political connections of some of the individuals and companies who will benefit from the $64 million contract to GTECH Corp. of Rhode Island, Mr. Schaefer said:

"The lottery is a major source of funds for the state of Maryland. People have to be confident in the integrity of the system. Since it was initiated years ago, there has been no scandal. There is none now."

The governor was particularly vitriolic concerning the story that appeared in Saturday's editions of The Sun and a follow-up editorial in yesterday's editions entitled, "Tainting the Lottery."

"I can't tell you the disgust I have for the reporter and the editorial because it goes to the integrity of the process and the integrity of the Board of Public Works, integrity of the persons who worked on technical and financial ends," said Mr. Schaefer, speaking about the lottery contract at the beginning of yesterday's weekly board meeting.

"The innuendo in the editorial and in that story leads me to appoint someone to look into the process again," he said.

The newspaper stories revealed that among the subcontractors who will receive a share of the GTECH contract will be:

* William L. "Little Willie" Adams, a political ally and close friend of Governor Schaefer's who has been prosecuted over the years for running an illegal numbers racket in Baltimore. Mr. Adams is treasurer of WBS Inc., a company that stands to earn more than $1.2 million for doing printing work for the State Lottery Agency.

* Beverly A. Wyatt, wife of Maurice R. Wyatt, the patronage chief when Marvin Mandel was Maryland's governor. Her company, Consolidated Computer Investors Inc., would receive $55,000 for providing "mini-computer" services to GTECH. Mrs. Wyatt's company would qualify as a minority contract because she is a woman. Mr. Mandel is now a lobbyist for GTECH.

* Real estate executive Otis Warren Jr., an associate of Mr. Adams' and Mr. Schaefer's, who could earn as much as $100,000 finding property for GTECH's computer installations.

Without mentioning the company by name, Mr. Schaefer said it was obvious to him that the newspaper stories were prompted by Control Data Corp., the incumbent operator of the state's lottery computers and losing bidder in the battle with GTECH over the new state contract.

Mr. Schaefer also disparaged Control Data's proposal for involving minority contractors in its bid, saying it lacked specifics. "Really, very sketchy information as to minority participation," he said.

Connie Scovin, vice president of communications for Control Data in New York, said, "We applaud the governor for initiating an investigation into the award of the lottery contract, something we called for in our protest of last November."

In November 1990, Control Data filed a formal protest over the Schaefer administration's decision to create a separate process to award the new lottery computer contract that differs from the procurement law used for all other major state purchases.

The protest claimed that by instituting its own procedure, the administration "could invite prospective vendors to sense a new opportunity to utilize the political process rather than the procurement process to advance their interests."

The governor said he had decided to order an independent review "to look to see if there is any undue influence, or a tainting of the process."

The governor did not say who would conduct the review.

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