School fiscal chief quits as bids probed

Head of city system also suspends aide after no-bid publicity

Investigations begin

$12 million energy project spawns furor for lack of oversight

June 02, 2000|By JOANNA DAEMMRICH AND LIZ BOWIE | JOANNA DAEMMRICH AND LIZ BOWIE,SUN STAFF

Baltimore education chief Robert Booker has accepted the resignation of his chief financial officer and suspended another top deputy involved in awarding lucrative, no-bid contracts that have embarrassed the school system.

Booker, at a news conference at school headquarters yesterday, made clear that he had been let down by two of his most trusted senior staff - Roger Reese, the chief financial officer, and Wilbur C. Giles Jr., the business officer.

"Their lack of judgment may have cost the school system dollars," he said, "but without a doubt, it has damaged the reputation of the school system in the eyes of many of its stakeholders."

Giles has been taken off his $96,000-a-year job for a month without pay, pending the outcome of an investigation into his management of an energy conservation project. The suspension went into effect yesterday.

Reese, who handled the project's financing, is leaving his $130,000-a-year post by month's end. Booker said Reese decided to resign this week, after an initial discussion a week ago about the possibility.

"I don't consider Mr. Reese's resignation a punishment. He came forward and said he planned to resign," Booker said.

Reese declined to comment yesterday. Giles could not be reached.

The timing allowed Booker to avoid the ugliness of having to fire either senior deputy, as some advisers had been urging him to do. Booker's two-year term ends June 30, and it will be up to the next schools chief to replace the chief financial officer and decide how to run the business office.

School board President J. Tyson Tildon was one of several city leaders who called Booker's actions "in the right direction" yesterday but cautioned they might not go far enough, especially in light of Giles remaining in his job.

Booker said he is hopeful that his staffing decisions - and steps he and the school board have taken in the past few days to tighten internal controls - will restore public confidence in the way the city schools are doing business.

"Though this situation has been painful and demoralizing," Booker said, "we cannot allow it to immobilize the school system."

Booker's announcement came three days after The Sun disclosed how senior staff had arranged two consulting deals last fall to finance and manage the $12.3 million energy project.

One went to Columbia financial broker J. P. Grant, whose company is making at least $1 million in fees, by the school district's estimate - up to eight times the industry standard. Grant and Giles are friends and went on a golfing vacation together in late March at a luxury resort in Puerto Rico.

The other contract was given 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 considering competitors, to manage the yearlong project for $670,000.

The Carnegie Morgan contract wasn't properly executed for seven months. The school board first learned about it last month and had to approve it retroactively.

Some civic and political leaders said yesterday that they believe Booker is doing the right things to repair faith in the school district's ability to spend taxpayer money wisely. Others cautioned that the district has to demonstrate better financial oversight, particularly now that it's independent of City Hall.

"I think it's a good start," said Baltimore Councilwoman Lois Garey, though she added, "the image rebuilding is going to take I don't know how long."

"I know that teachers are going out and buying supplies on their own because there isn't enough money for their classrooms," Garey said. "When money is being virtually wasted, it makes you sick."

Tildon, who has called the no-bid consulting deals "indefensible," said the school board now plans to examine all major contractual agreements.

The board has also hired an accounting firm to conduct an audit, introduced a new set of spending rules and is asking top school employees to sign affidavits assuring that they don't have conflicts of interest.

"We have to make sure our procurement procedures are not just good but perfect," Tildon said.

He said he can't tell whether the disciplinary action against Giles was appropriate "until we have all the information" and added, "maybe, there are other things that will surface."

Several city and state politicians questioned whether Booker was severe enough.

Baltimore Councilman Melvin L. Stukes, who as chairman of the council's education committee plans to hold a hearing, said he wants "to know how the hell this was done" and "how can you prevent it from happening again."

"I would not have anyone escaping town until they repeat the ABCs for me about five thousand times," he said. "I am serious. We're talking about serious money that affects the children."

Said state Sen. Barbara A. Hoffman, a Baltimore Democrat: "I am not convinced, unless you change the processes, that a month's slap on the wrist is enough for Mr. Giles."

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