A top state purchasing official might have violated ethics laws by insinuating that vendors could get preferential treatment if they participated in a fundraiser for a nonprofit organization, according to an investigative audit released yesterday.
Sparked by calls to state fraud hot line, legislative auditors began the investigation in September. The 11-page review details how a senior official overseeing the Office of Procurement and Logistics sought monetary sponsorships from vendors for a "reverse" trade show held Oct. 16 by a professional organization of procurement employees. Officials from state agencies were exhibitors at the fair, attended by vendors who work with the state.
The audit does not name the senior General Services official or the nonprofit group. It recommends that the State Ethics Commission review the matter. Secretary of General Services Alvin C. Collins supported that recommendation in a letter responding to the audit, though he defended the intent of the purchasing official.
"These officials acted in good faith for the good of the State and without personal gain. Your audit report will have a chilling effect on the willingness of employees to put in this extra effort for the greater good," he said in his letter to legislative auditors.
The nonprofit Maryland Public Purchasing Association held its first reverse trade show Oct. 16, according to its Web site. Its president, Mark A. Pemberton, the assistant secretary of procurement and logistics for the Department of General Services, has duties that match those described in the audit. He could not be reached immediately for comment yesterday.
According to the association's Web site, 357 people attended the trade show, held at Martin's West. The audit described the event as a fundraiser for the association, whose members include more than 300 purchasing officials at hospitals, schools, colleges and other government agencies.
The association collected about $94,000 through registration fees and sponsorships, according to the audit. Four state agencies and 66 government contractors purchased booths at the event, titled "Building Bridges Between Government and Vendors."
The Maryland nonprofit mentioned in the audit is a chapter of a national organization of procurement officials. The Maryland Public Purchasing Association is the state chapter of the National Institute of Governmental Purchasing. The Maryland group "is dedicated to establishing and maintaining increased professionalism in the field of public sector procurement," according to its Web site.
The nonprofit scrutinized by state auditors created the appearance that it was affiliated with state government because the group's logo includes a depiction of the State House and a map of Maryland, the audit says.
The auditors maintain that the association's actions, "at a minimum, gave the appearance that certain vendors (for example, those that made payments to sponsor the trade show) could receive preferential treatment in dealing with State procurement," according to the report.
Auditors found that association members were encouraged to market the event to their vendors, telling them it would be an opportunity to network with other procurement officials. Vendors attending the fair also received a directory of purchasing officials, with their contact information.
The group's Web site posted a disclaimer stating that trade show sponsors would not get special access or benefits. But the auditors maintain that the disclaimer's presence recognizes "that the trade show as constructed, could give the appearance that vendors ... could receive preferential treatment."
"The purpose of the trade show was to give potential vendors the opportunity to learn what contracting opportunities exist at and the competitive procedures followed by individual agencies," said Collins, the secretary of general services, in the letter responding to the audit.
The association used sponsorship funds to decrease the cost of admission for vendors, he wrote. Also, the Department of General Services official did not personally solicit vendors, participate in the planning or encourage members to do so, Collins wrote.
According to state law, officials are not allowed to knowingly accept anything of economic value either directly or indirectly from vendors or potential state vendors.