Blind Industries decides to fight state lawsuit American Council for Blind calls for changes after audit of BI indicates mismanagement.

December 20, 1991|By Marina Sarris | Marina Sarris,Evening Sun Staff

The Evening Sun Friday, after correctly reporting the name of a Blind Industries and Services of Maryland official who received a raise, inadvertently used another person's name in the second reference. The official who got the raise was president Richard J. Brueckner.

The Evening Sun regrets the error.

The governing board of Blind Industries and Services of Maryland will fight the state's attempt to put the quasi-public agency into receivership, although a separate consumer group for the blind sided with the state today.

The consumer-oriented American Council of the Blind of Maryland today called for a reorganization of Blind Industries in the wake of the state's allegations of mismanagement.

FOR THE RECORD - CORRECTION

Blind Industries' board, however, voted yesterday to dispute allegations contained in a lawsuit filed Tuesday by the Maryland attorney general. The vote was unanimous with one abstention, said the board's attorney, Stanford Hess.

The lawsuit is based on a state-ordered audit that uncovered "inappropriate" entertainment expenses, faulty hiring practices, large raises for executives, and a potential conflict of interest involving two agency officials. The suit asks for a review of Blind Industries' operations and the appointment of a temporary receiver to oversee its assets.

Blind Industries received $1.2 million, or almost 10 percent, of its $13 million annual budget from state taxpayers. The Baltimore non-profit agency provides training, education and jobs for blind adults. It manufactures clothing, note pads and other goods at plants in Baltimore, Salisbury and Cumberland.

The 100-member American Council of the Blind was "shocked and appalled" at the audit's findings, said Gene Spurrier, council vice president and legislative committee chairman.

But Blind Industries' board members, who are appointed by the governor, believe the audit contains "half-truths" and misinformation, Hess said.

Hess met with officials in the attorney general's office today. Deputy Attorney General Ralph S. Tyler said no agreement had been reached as of noon. The case is scheduled to be heard in Baltimore Circuit Court Monday.

Hess rebutted the allegations against his client.

The state contends that Blind Industries gave its top executives big raises and paid $2,000 toward a county club membership for President Richard J. Brueckner, although the agency is losing money. Blind Industries officials also spent money inappropriately on meals, alcoholic drinks, golf fees and baseball tickets, the audit says.

Brueckner used social activities to solicit donations to the agency, Hess explained. The president only used the golf

membership on weekdays to entertain people connected to Blind Industries, Hess said.

Hess said the audit's information about Brueckner's salary is wrong. Brueckner's starting salary in 1989 was $82,000,not $62,000 as stated in the suit, he said. The salary later was increased to $98,000, but Brueckner rejected $4,000 of the raise, Hess said.

Brueckner's salary was scheduled to reach $101,000 next month, as alleged, but only if he met certain profit goals, Hess said. Brueckner fell short of the mark, so he won't get the raise, Hess said.

Hess did not dispute the suit's contention that the agency lost money while Hess and other managers received raises. The audit also says the agency's lowest-paid workers earn $4.30 an hour.

Hess said the net income figures could have been distorted by a large donation one year.

The audit said Brueckner and Frederick Puente, chairman of the board of trustees, tried to set up a soft-drink business that would have competed with Blind Industries' vending division. The plan fell through.

Hess declined to comment in detail. He did say, however, that the men did not buy a competing business and did not, as the suit alleged, spend company time on the project.

Hess did not dispute the suit's contention that Blind Industries failed to hire enough blind employees, as required by law.

But he explained that the agency thought it had resolved that matter in a meeting with state vocational rehabilitation officials before the suit was filed.

Hess said the problem began when the agency received a federal contract to make Army sweat shirts but could not find enough blind people to work at its Salisbury plant. The agency hired sighted workers with the understanding that they would be replaced if blind people applied for the jobs, Hess said.

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