The Ehrlich administration fast-tracked a minority business application from a group of prominent Republican women, clearing the way for their hastily formed firm to participate in a $110 million information technology contract with the Department of Human Resources, an investigation by The Sun reveals.
The company, called Isis Technology Consulting LLC, was the brainchild of long-time GOP strategist Carol L. Hirschburg. As a subcontractor on the DHR job, the firm had already received some compensation when the deal went sour last month, in large part because Hirschburg wanted a guarantee that her firm would collect nearly $12 million over three years.
FOR THE RECORD - The headline for an article in the March 1 editions of The Sun identified Isis Technology Consulting as a "firm run by GOP women." One of the active partners, Carol Hirschburg, is a Republican; the other, Verna Willes, is a registered Democrat.
In addition, the company did not close operations after failing to get a pledge of state funding.
The Sun regrets the errors.
A review of state records shows that Isis was certified as a minority business in 30 days instead of 90 to 120 days, the typical waiting time. Isis also was given leeway to bend regulations intended to help "disadvantaged" individuals - those with personal net worth of $1.5 million or less - compete for state contracts.
Isis' preferential treatment has caught the attention of the newly installed administration of Gov. Martin O'Malley. Reacting to The Sun's questions about Isis, John D. Porcari, the acting secretary of the Maryland Department of Transportation, the agency that oversees the minority business program, said he has ordered an audit of all firms that were fast-tracked in recent years, including during the last Democratic administration.
"I have asked that [the audit] be done as quickly as possibly," said Porcari. "It is certainly possible [that firms] could lose their certification."
Porcari also said his staff is looking at Isis to determine whether it qualifies as a minority business.
Even though Hirschburg asked MDOT to fast-track Isis' application, she said she didn't view that as special treatment.
"I was never told, nor did I ever think that anything exceptional was done in our case," said Hirschburg, who has worked for many of the state's top Republicans, including former U.S. Rep. Helen Delich Bentley and two-time gubernatorial candidate Ellen R. Sauerbrey.
Other key players, including the three other women who helped to create Isis, have either declined to comment or have not returned repeated telephone calls to their offices, cell phones and homes.
Created in 1978 by the legislature, the minority business program helps firms run by women and racial minorities to land state contracts. The state requires that a majority of investors in a minority-owned business be financially "disadvantaged"; it caps gross receipts by the firm at $12.5 million over three years.
Isis managed to qualify under the first standard after it revised its ownership structure, but its ties to Baltimore-based Syscom Inc., a non-minority company with international technology contracts, raise doubts about its ability to qualify under the second.
Isis' top investor is Dr. Joseline Sangalang Bayer, a psychiatrist and wife of Theodore F. Bayer, the founder and president of Syscom. The couple and Syscom have donated roughly $22,000 to Republican campaigns in recent years, campaign records show. And they regularly host GOP fundraisers at their $2.4 million Annapolis home. Isis' secretary, Victoria E. Anzmann, is married to Mark D. Anzmann, Syscom's vice president of outsourcing and staffing. Isis' vice president and treasurer, Verna Willes, is Syscom's vice president of human resources.
Isis is based at Hirschburg's Owings Mills condominium and includes in its leased equipment her 2002 BMW. The firm was hired to recruit and pay contract employees to perform computer maintenance and enhancement jobs at DHR, the state's welfare agency. However, only one member of the Isis team - Willes, who was still working for Syscom when Isis started work at DHR - has any recruitment experience.
Joshua A. Newberg, an associate professor at the University of Maryland's Robert H. Smith School of Business, who teaches law and business ethics, questioned whether the move to certify Isis - with its close ties to a non-minority firm - violated the intent of the minority business program.
"If the public policy is to bring in new [minority] players, genuinely new players, then arguably the state should take a look," he said.
Debra F. Carter, assistant MDOT secretary for equity and economic empowerment, said the relationship between Syscom and Isis was reported to the Minority Business Enterprise Advisory Committee, which reviews applications, and Isis was found to be sufficiently independent of Syscom.
"The agency did inquire about the relationship between Syscom and Isis," she said.
But state records show that two non-minority firms - Syscom and ACS State and Local Solutions Inc. - played direct roles in the formation of Isis.