City probes contracts with McLean's brother

March 08, 1994|By JoAnna Daemmrich and Kim Clark | JoAnna Daemmrich and Kim Clark,Sun Staff Writers

The city auditor is investigating contracts worth tens of thousands of dollars with a medical supply company owned by the brother and sister-in-law of embattled Baltimore Comptroller Jacqueline F. McLean.

Gaithersburg-based District Scientific and Medical Supply Inc. is one of four companies under scrutiny in the wake of a criminal investigation into the comptroller's conduct. She was indicted Feb. 25, accused of stealing more than $25,000 from the city and arranging for a lucrative city lease of a family-owned building.

District Scientific's business with Baltimore surged from next to nothing to about $60,000 a year after Mrs. McLean took office in late 1991. The comptroller failed to disclose the family connection in voting on numerous routine contracts that went to the company over the next two years.

"We have been doing a thorough audit of all transactions of the office. I don't know at this point if there's a problem with District Scientific," City Auditor Allan L. Reynolds said yesterday.

Mrs. McLean's brother, George L. Fountain Jr., said his dealings with Baltimore have been completely aboveboard.

"I earned everything I have," he said, adding that he won the additional business through competitive bids, not his relationship to Mrs. McLean.

The investigation is focusing on the increase in District Scientific's business with the city, requests for expedited payments and whether the company's products are the least expensive available.

In 1991 and 1992, District Scientific received $2,118 in city contracts, according to Mr. Reynolds. However, in the fiscal year starting July 1, 1992, after Mrs. McLean was elected to the city's third-most powerful position, District Scientific pulled in $64,916 worth of business. In the past six months, the company has shipped supplies worth another $35,692.

Mr. Reynolds declined to name the other three companies being audited.

Former City Auditor Benjamin Katz, who retired last summer, said his work into District Healthcare --a well-known company based in Washington -- was called off in April after Mrs. McLean questioned whether it was necessary. He wanted to determine whether the prices were reasonable.

Mr. Katz reminded Mr. Reynolds of that work several months ago, after allegations surfaced that the comptroller had hired a fictitious consultant, Michele McCloud, and tried to obtain a $1 million city lease for a building that she and her husband own.

Mrs. McLean, who is on an indefinite, unpaid leave, is scheduled to be arraigned March 22 on four counts of misconduct in office and one count of felony theft.

One city official said yesterday that Mr. Fountain had telephoned him, asking for fast payment -- and had mentioned his relationship to the comptroller.

Despite the call, "We were not pressured or influenced in any way," said Norman B. Johnson, chief of fiscal services for the Baltimore Fire Department.

Renee Fountain, Mr. Fountain's wife and president of the company, said they founded District Scientific nearly 10 years ago and built a solid reputation for supplying surgical gloves, masks, syringes and other medical items to hospitals as well as the federal and state government.

Members of the Board of Estimates, the five-member panel that reviews city expenditures, say they never realized that the company was run by Mrs. McLean's brother and sister-in-law.

The city ethics law requires elected officials to reveal only connections that benefit them directly, Mayor Kurt L. Schmoke said yesterday. The mayor acknowledged that he would have preferred knowing about the relationship. "I guess in the current context, the more you disclose the better," he said.

Council President Mary Pat Clarke said she would have recused herself from any vote awarding city business to any of her own family members. "It is the custom that you disclose your interest when a family member is involved," she said.

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