Despite rule, state kept selling cars directly

May 03, 2006|By GREG GARLAND | GREG GARLAND,SUN REPORTER

Despite assuring legislative auditors in January that surplus government cars and trucks would be sold only at auction, a state agency has continued to sell to dealers without going through the auction process, officials acknowledged yesterday.

General Services Secretary Boyd K. Rutherford said managers in charge of selling surplus state vehicles appear to have misinterpreted a memo he issued Jan. 20, in response to critical audit findings.

Auditors had faulted the agency's practice of selling vehicles directly to the public, noting that sales at auctions generated more money and that direct sales held the potential for abuse.

Rutherford said yesterday that he was chagrined to learn, after an inquiry by The Sun, that the Maryland State Agency for Surplus Property had continued to sell vehicles without going to auction after his memo.

"I was a little disappointed, and that's putting it mildly," he said.

Eighteen vehicles were sold directly to nine dealers between Jan. 20 and April 30, Rutherford said. The most expensive was a 2002 tow truck with 226,000 miles on it, for $6,500; the least expensive was a 1997 Dodge van with 156,000 miles that sold for $860, he said.

"At this point, we see no indication that there was any [state employee] benefiting directly or personally from this, but we're still assessing it," Rutherford said.

He said it isn't clear how dealers learned that surplus vehicles, sold at book value, were available.

Rutherford said managers at his agency appear to have misinterpreted what he intended when he ordered a halt to selling vehicles directly to the public. His memo said that, effective immediately, "all surplus motor vehicle sales and disposals shall be conducted through third parties." He said he worded his memo that way to allow for the possibility of selling vehicles through an Internet auction site, as well as through a state vendor -- Bel Air Auto Auction.

He said he thought his intent was clear. He has since "conveyed in no uncertain terms" that surplus state vehicles are not to be sold directly to either the public or to dealers, he said.

Rutherford said the agency began experimenting with direct sales of some vehicles in 2005 believing that it might generate more money for the state than sales through auctions. But General Assembly auditors found that wasn't the case.

Auditors compared similar makes and models with similar mileage sold around the same time and found that some sold at auction fetched nearly twice as much as others sold directly to the public.

Auditors also found that a state car was sold in June directly to the spouse of a "senior management official" who oversees the disposal of surplus property.

The audit report said the state vehicle sold for $1,047. The report did not identify the make, model or year, but officials with Rutherford's agency said it was a 1998 Chevrolet Cavalier with just under 120,000 miles.

Auditors said the June sale "appears to have violated state ethics law and a prior ethics opinion" and referred the matter to the State Ethics Commission for review.

greg.garland@baltsun.com

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