Printing company's status challenged Firm not capable of handling lottery job, panel concludes.

July 16, 1991|By William Thompson | William Thompson,Evening Sun Staff

A company created expressly to handle the lucrative printing business of the Maryland lottery should not be given preferential status as a minority enterprise because the firm has virtually no employees, no equipment and no experience to handle the job, a state review panel has concluded.

WBS Inc., a Baltimore-based company associated with William L. "Little Willie" Adams, a political ally of Gov. William Donald Schaefer and a one-time numbers kingpin, is included in the list of minority subcontractors that helped lottery giant GTECH Corp. of Rhode Island win Maryland's $65 million lottery contract.

John B. Covert, deputy director of the state Department of Transportation's Division of Fair Practices, said a committee review of WBS concluded that the firm should not qualify as a minority contactor under the state's Minority Business Enterprise guidelines because it fails to meet even minimum requirements.

"The committee requires a firm or its owner to have technical experience or expertise," said Covert. "This one did not."

The Transportation Department handles minority business reviews for other agencies. State law requires that 10 percent of large state contracts be awarded to minority contractors or subcontractors.

Covert said WBS has appealed the decision and the issue is expected to go before an administrative law judge. If the judge upholds the committee decision, WBS can carry its appeal up to the U.S. Department of Transportation.

Maryland lottery spokesman Carroll Hynson said that even if the panel's recommendation remains unchanged he did not know whether WBS would be disqualified. WBS could remain as GTECH's printer if the GTECH meets its minority subcontracting requirements elsewhere, Hynson said.

WBS was created in 1990 and, according to GTECH's bid proposal, formed with Virginia-based Quantum Publications Inc. a general partnership called Lottery Enterprises to print lottery ticket stock and pay slips. Quantum is a commercial printer certified as a minority enterprise in Virginia.

WBS is headed by Theo C. Rogers, a black developer who is president of A&R Development Corp. If WBS continues to handle the lottery's printing needs, it could receive as much as 11 percent of GTECH's total contract, or almost $7 million.

Adams, a businessman and political activist who admitted that he ran illegal numbers games in Baltimore 40 years ago, serves as WBS treasurer.

At a ribbon-cutting ceremony opening GTECH's new # headquarters in Columbia last month, Adams told a reporter he was "just a little part" of the lottery contract. And, he admitted, he knew nothing about the printing business.

In the same conversation, Adams described Governor Schaefer and former Gov. Marvin Mandel, who helped lobby for GTECH during the bidding war, as "two of my closest friends."

WBS is one of a handful of lottery subcontractors whose principals have close political and personal ties to Schaefer.

In May, an angry Schaefer reacted to newspaper reports about the list of subcontractors by pledging an independent review of the process used to award the contract. He repeated the pledge a week later but has yet to begin the review.

GTECH's winning bid to supply the state with new computers and lottery terminals was nearly $20 million lower than current lottery vendor Control Data Corp.

Since late June, GTECH technicians have installed 1,092 of the company's new terminals -- about 60 percent of the planned conversion -- at various locations throughout the state. The entire changeover from Control Data to GTECH equipment is scheduled to take place July 24 when the new contract begins.

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