Booker urged to fire 2 aides

City schools chief mulls fate of figures in no-bid contracts

Decision likely tomorrow

He faults top officials on oversight, restates confidence in system

June 01, 2000|By Liz Bowie and JoAnna Daemmrich | Liz Bowie and JoAnna Daemmrich,SUN STAFF

Baltimore schools chief Robert Booker is under pressure from advisers to take action against two top deputies involved in the awarding of lucrative, no-bid contracts.

Booker said yesterday that he is doing his own review and expects to "make some decision" by tomorrow, but he refused to comment further about his plans.

Emerging from a closed-door meeting with Mayor Martin O'Malley yesterday afternoon, Booker said he blames the problems with the contracts as much on failures by top employees as on weaknesses in internal controls.

"I have not lost confidence in the system," he said. "If the employees had done the job that they should have done, the system would have had appropriate results."

While he mulled over whether to take disciplinary action against chief financial officer Roger Reese Jr. and business officer Wilbur C. Giles Jr., Booker tried to shore up confidence in the school system's ability to manage its finances.

Booker was asked by O'Malley to go to City Hall to explain what steps he is taking to tighten spending controls.

"I just wanted to get a better understanding from him about what he was doing to address the problem," O'Malley said after the meeting. "I think he's doing the right thing."

Booker's impending decision comes after The Sun disclosed Tuesday that two consulting agreements had been arranged last fall to finance and manage a $12.3 million energy conservation project being run by Giles.

One went to Columbia financial broker J.P. Grant, whose company is making at least $1 million in fees, by the school system's estimate - up to eight times the industry standard.

Grant and Giles are friends and went on a four-day golfing vacation together in late March at a luxury resort in Puerto Rico.

The other contract went to a Baltimore energy planning firm, Carnegie Morgan Resource Management, which came up with the idea to lower utility costs and then was chosen by Giles, without competitive bidding, to manage the project under a $670,000 agreement that wasn't properly executed.

Panel to review contracts

Booker, whose term ends this month, has acknowledged being unfamiliar with many details of both consulting deals. Reese handled the financing of the energy project and signed for Booker.

Booker said he told the mayor he has appointed an internal committee to review all contracts before they are presented to the school board, to determine whether the proposed services and costs are justified.

The school board also has hired the Arthur Anderson LLP accounting firm to conduct an audit and is asking top officials to sign affidavits affirming that they don't have conflicts of interest.

"You will not see this kind of problem again," Booker said, adding that he believes the series of steps that have been taken will restore credibility to the system.

But several people inside and outside the school system have advised Booker that's not enough, according to three sources.

Urged to fire men

Those advisers have urged him to take immediate action to remove Reese and Giles.

Giles, hired as the school facilities director in 1993, was promoted to a new, $96,000-a-year job in February 1999 that gave him power over all school contracting in Baltimore.

Reese came from Atlanta 2 1/2 years ago to be the schools' chief financial officer. He is paid $130,000 a year.

Neither Giles nor Reese returned phone calls to their office yesterday.

City Comptroller Joan M. Pratt proposed yesterday a new way to strengthen the school board's ability to track all the contracting and purchasing that used to be handled by City Hall.

Three years ago, the city gave up partial control of its school system in return for $254 million in new state aid.

Pratt said she thinks the governor should appoint her and her state counterpart, William Donald Schaefer, as ex-officio members of the school board to provide their financial expertise and do audits at the board's request:

"That way we could have some audit powers, subject to the authority of the school board. If it was subject to the other board members, I don't think they would object to that kind of action."

Maryland school Superintendent Nancy S. Grasmick said yesterday that she is disturbed by the way in which the two consultants were hired and would help the city schools put in place better safeguards.

"Obviously, we want to assist them. We want the system to be functional," she said. "This is clearly dysfunctional.

"Beyond that, I think it's a very sad situation. I think it diminishes public confidence in the system and detracts from the excellent instructional work being done, and that's unfortunate."

The timing of the no-bid consulting controversy is particularly embarrassing because of the school board's complaints that the state is shortchanging its efforts to turn around schools.

Last month, the board sent Gov. Parris N. Glendening a strongly worded letter urging him to come up with more money - or face the prospect of a bitter court battle.

Glendening is out of the country this week.

But the governor's spokeswoman issued a statement that the state has greatly increased its city school spending during his administration, from $3,893 per student in 1995 to $6,488 beginning July 1 - and wants to make sure its investment is well-spent.

"The state has been a full partner in providing educational opportunities to Baltimore City students," said spokeswoman Michelle Byrnie.

"There are concerns raised by several recent articles about how that money is being spent and if it is being managed wisely and in the most effective and efficient ways."

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