State officials have revoked the purchasing power of Maryland Public Television after determining that managers with the taxpayer-subsidized broadcaster deliberately circumvented state rules to award more than $500,000 in fast-track construction projects to a single company.
Gov. Robert L. Ehrlich Jr. called the improprieties at the agency "very troubling," and said he welcomed an additional review by lawyers to determine whether the allegations constituted a violation of criminal law.
"Right now, it's at the very troubling stage," the governor said. "You have to question why the same companies were being sought after for contracts."
Department of General Services chief Boyd K. Rutherford said yesterday that an assistant attorney general is continuing to review the problems, and would consult with others in the attorney general's office about whether criminal charges should be pursued.
"It does not look good, and it deserves further investigation," Rutherford said.
General Services said yesterday it had confirmed findings of fraud uncovered by legislative auditors late last year, and that it was rescinding most of the agency's purchasing authority for at least six months. During that period, MPT officials can buy only items costing less than $2,500, and employees must be retrained about how to follow state regulations.
"Evidence was found to indicate that there was a deliberate effort to circumvent the state of Maryland's procurement laws," said Michael Zimmerman, the procurement director for the General Services Department, in an April 15 letter to MPT President Robert J. Shuman.
Ehrlich and the two other members of the state Board of Public Works, Comptroller William Donald Schaefer and Treasurer Nancy K. Kopp, discussed the problems at the board's bimonthly meeting yesterday. The board, which must approve most state spending, reluctantly signed off on $469,300 in questionable payments that had already been made.
"Maryland Public Television is a treasure," Kopp said. "This raises serious questions about how Maryland Public Television has been managed."
The irregularities surfaced during a review of construction projects performed between 2000 and 2002 at MPT's Owings Mills campus to create space for digital broadcasting equipment and for a new education program known as the Education Star schools project.
The construction projects cost about $540,000, but public television officials broke them into individual contracts with a maximum expenditure of $25,000 -- meaning they could qualify as "small procurements" under state regulations and did not need approval from the Department of General Services or the State Board of Public Works.
According to records, all the contracts were then awarded to one company, Ultimate Associates of Manchester.
General services auditors said that interviews with public television employees revealed that broadcasting managers were upset when they learned that proper authorization would have taken at least six months, placing federal grant money for digital equipment in jeopardy.
"Senior management found this unacceptable, and directed work to be performed in the manner in which it was done," auditor Robert Kleinhen wrote.
Although MPT solicited fax and telephone bids for each $25,000 segment of the construction work, it typically reached out to the same companies, and always awarded the work to Ultimate, even when it was at the same price as another bidder. Some of the other bids appeared to come from the same company, even though the letterhead had been changed, officials said.
Larry D. Unger, executive vice president with the Maryland Public Broadcasting Commission, said yesterday he was confident that they agency would regain its purchasing authority after the sanction period.
"We haven't made any secret of the fact that this was not done correctly at the time," Unger said. "We have made changes to ensure that this will not happen again. ... We believe that we will re-earn their confidence."
Unger would not answer questions about whether any MPT employees had been reprimanded for participating in the bidding process, or which managers were responsible. He said he did not know of any relationships between MPT employees and Ultimate Associates.
Unger said he was not aware of the problems until legislative auditors released their findings in November.
The review was limited in scope and did not cover other findings in the legislative audit. Legislative auditors found that an MPT vice president for interactive content, Beverly Bricker, awarded a $54,000 contract for Web page design to her live-in boyfriend without competitive bidding. Bricker no longer works for the agency.