N.Y. bidder raises funds for governor Glendening unaware of bid on Md. pact by host's firm, aide says

Found out on company jet

CEO's money refused

other firms' executives could still contribute

August 09, 1996|By C. Fraser Smith and William F. Zorzi Jr. | C. Fraser Smith and William F. Zorzi Jr.,SUN STAFF

Gov. Parris N. Glendening flew to New York City two weeks ago for a $1,000-a-ticket fund-raiser held by the chief executive of a national corporation that was at the time seeking a multimillion-dollar contract to provide health care services to Maryland state employees.

Glendening, along with the other two members of the state's Board of Public Works, will award the contract as early as Sept. 4.

A Glendening spokesman said yesterday that the governor was unaware of his host's pending bid until the day of the fund-raiser -- and decided immediately to refuse his contributions.

As many as 50 other business executives who attended could still contribute. No checks have been received to date by Glendening's continuing campaign committee, said the spokesman, Raymond C. Feldmann.

The contract in question is worth about $15 million annually to the company that now has it. Sources say new requirements could push its value to $25 million a year. The state's request for bids drew about eight competitors, including at least two Maryland firms.

The July 23 event was arranged by Albert S. Waxman, chairman and chief executive officer of New Jersey-based Merit Behavioral Care Corp., which provides health care services nationwide.

Feldmann said Glendening was unaware of Merit's bid until his flight to New York -- on a Merit company plane. The governor learned of the company's interest from a campaign volunteer Feldmann identified as Melinda Evans, who he said learned of it that same day -- and did not tell Glendening until they were airborne.

Feldmann was unable to provide Evans' address or telephone number.

Glendening decided "immediately in accordance with his feelings and policy" to accept no contributions from Waxman, his employees or the company, and to reimburse the company for the flight and all other expenses, according to Feldmann.

"He wanted no impropriety and no appearance of impropriety," Feldmann said. "He wanted this handled in an upfront and

aboveboard manner."

The governor considered simply turning back, the spokesman said, but continued because business executives with no connection to Merit were expected at the party. Some of them were invited to the event by Ira C. Cooke, an Annapolis lobbyist who represents both Merit and Options Mental Health, a Virginia-based company that now has the state contract.

He said Waxman called to propose the event in April. At the time, Feldmann said, the state had not officially requested bids on the mental health services.

But lobbyists who are paid to keep track of such matters could have read in Board of Public Works minutes as early as December that the contract would be re-bid. State officials made it clear that they would open the contract for bidding some time this year, according to the board's minutes.

Evans did attempt to learn why a New York businessman would want to raise money for a Maryland governor, Feldmann said. The spokesman said he did not know Waxman's answer.

"The person who represents the company brought the businessmen together to give them an opportunity to talk to the governor," he said, referring to Cooke. Cooke declined to comment other than to confirm that the fund-raiser had been held.

According to Feldmann, Evans learned of Waxman's contract bid only as she collected information to brief the governor on who would be at the New York party.

"She was running late for the plane. They got on and during the XTC plane ride to New York she informed the governor that the proposal had been submitted. They both agreed that they would accept no money whatsoever from Mr. Waxman or Merit," he said.

As soon as the governor arrived at Waxman's Manhattan apartment, Feldmann said, the governor announced that he would not accept money from Waxman or other Merit officials.

Among the guests were about 50 other business executives with ties to Maryland who came to "hear the governor's message on Maryland's healthy business climate," Feldmann said.

"This was an opportunity for them to contribute to the campaign and for the governor to speak to them on his feelings for making Maryland a pro-business state," he said.

Whoever wins the contract would provide mental health services, psychological counseling and substance abuse services to about three-quarters of the state's approximately 75,000 employees and their families. Abiding by rules of confidentiality, state officials declined to say who submitted bids.

But sources said Green Spring Mental Health Services and Sheppard Pratt Health System were among the bidders and may be finalists along with Options, the current contract holder.

The total amount of the current Options contract -- a two-year contract with a one-year extension -- is $45.4 million, according to Board of Public Works minutes.

A $39 million contract initially was awarded to Options for January 1993 to December 1995, but the state exercised an option in December and extended the contract for another year.

On May 17, the Department of Budget and Management issued a request for proposals to potential bidders on a new two-year contract for the mental health services, to begin Jan. 1. After the initial two years, the state would have the option of extending the term of the contract for two successive one-year periods.

Under the state's deadline schedule, the bidders' "best and final" offer was to have been submitted by Tuesday, state budget officials said.

An in-house evaluation committee ultimately will make a recommendation through the department's procurement officer. That recommendation then will be acted on by the Board of Public Works, which consists of the governor, Comptroller Louis L. Goldstein and State Treasurer Richard N. Dixon.

Pub Date: 8/09/96

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