Is the state getting its money's worth from the Maryland
International Division, the Department of Economic and Employment Development agency billed as a "one-stop shop" for businesses interested in foreign trade?
A number of state legislators appear to be losing confidence in the way the division is being managed and the way its $4.5 million budget is spent.
Lawmakers ordered a performance audit of the division this week and a special joint legislative committee recommended that some of the work now being done by the Maryland International Division be taken over by the private sector.
In the last several months the division has lost at least four key people, including two who resigned this week. Former employees say the division is losing sight of its objective to help small- and medium-size businesses trade overseas.
Eric Feldmann, director of the division since it was formed in 1988, insists that the division garners more return than do most businesses, and says his critics have been short-sighted in their approach to trade.
Former employees, legislators, the governor and DEED officials agree that the state must pursue international trade, but differences emerge on the way the effort is being undertaken.
Sen. Laurence Levitan, D-Montgomery, chairman of the Senate's Budget and Taxation Committee, said the audit was ordered last April because, "I had gotten back some complaints about the way things were being done."
Levitan said some businesses had raised concerns that members of the the Maryland International Division were poorly prepared in trade shows and questioned the quality of the work they were doing.
Legislative auditor Anthony Verdecchia said his staff is looking at the procedural aspects of the division. "What does it cost to operate it . . . what benefits do we get?"
He said the audit report is due to be presented to lawmakers in October.
Former employees of the division, who asked not to be identified, say politics, rather than business considerations, is the driving force behind many of the division's initiatives.
"People have become travel agents for the big boss," said one employee, referring to many of the trade missions undertaken by Gov. William Donald Schaefer. "The reason we go to some places made little sense to me."
Specifically, he said, the governor's trips to Kuwait and the Middle East were more publicity stunts than sound business decisions. He said he doubts that Maryland's small and medium business can compete in the region and that the big international companies don't need the help of the state to do business there.
Another former employee said the division increasingly focused on the trade missions at the expense of its counseling programs designed to help state businesses work overseas.
"The question is whether the division is to be a public relations umbrella to expose Maryland to the international arena or is it something to get actively involved in real business? There must be a place for both," he said.
A legislative committee charged with reviewing the state's budget needs through the year 2000 on Monday released a report calling for increased private sector support of the Maryland International Division. The committee also suggested that the division's trade activities become the responsibility of the World Trade Center Institute, a new non-profit organization funded jointly by state government and private businesses.
Sen. Larry Young, D-Baltimore, a co-chairman of the committee, said lawmakers are enthusiastic about the state's trade efforts, but believe the businesses that benefit from the initiatives should pay more of the costs.
Del. Howard P. Rawlings, D-Baltimore, another co-chairman, said the recommendations are prompted by more than fiscal expediency.
"It has become clear that many of the legislators are developing a lack of confidence in how the state's trade initiatives are being administered," he said.
Feldmann said he welcomes the audit and the chance to prove the worth of his 55-person division. The governor's trade missions have been an essential part of bringing new business to Maryland. "To be successful, you have to have not just counseling," he said. "Counseling alone doesn't provide the access to Egypt."
Although not the sole element of a successful trade program, Feldmann said, the governor's presence is needed in many parts of the world in order to open the doors to Maryland businesses.
The missions have created 350 jobs and generated $52 million in new investment, he said. The governor's trips also have helped retain business, he said.
Feldmann said some members of his staff complained about the governor's trade missions to the Middle East and initiatives in Eastern Europe and the Soviet Union, but he said they failed to recognize the trade potential in those areas. "There is incredible business there," he said. "This governor is not a Johnny Come Lately. We're going to be there first."