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Minority program questioned
Maryland Gov. Martin O'Malley and Comptroller Peter Franchot called yesterday for an expanded review of the state's Minority Business Enterprise program after revelations that a firm headed by prominent GOP women had its application fast-tracked so the company could get a piece of a technology contract with the Department of Human Resources.
"This seems to be exactly what an effective program should not be doing," said O'Malley spokesman Rick Abbruzzese, adding that the governor intends to look at the program -- which was started in 1978 to help racial minorities and women build profitable companies -- from the "ground up."Franchot also asked Maryland Department of Transportation Secretary John D. Porcari, who oversees the minority business program, to expand the audit to include all agency contracts approved quickly during the final year of former Gov. Robert L. Ehrlich Jr.'s administration.
"We want to be a pro-business state in Maryland, and that means that everybody plays by the same rules," said Franchot, who previously served as chairman of the transportation and environment subcommittee of the House Appropriations Committee. "And if the playing field is tilted for any reason, normal businesses turn away from Maryland."
The scrutiny of the state's minority business program follows an investigation by The Sun that revealed that a firm called Isis Technology Consulting LLC, headed by longtime GOP strategist Carol L. Hirschburg, received preferential treatment when it applied with MDOT for certification as a minority firm. Instead of three to four months -- the typical wait time for most firms -- the company was certified in one month.
Hirschburg worked with former Republican Howard County Councilman Christopher J. Merdon to get Isis certified as a minority business so that it could team with Merdon's employer, ACS State and Local Solutions Inc., on a $110 million information technology contract with DHR, the state's welfare agency. The firm had already received some payments when the deal fell apart last month, in part because Isis officials wanted to secure a guarantee they would receive $12 million within three years.
In addition to ACS, Isis also has close ties to nonminority firm Syscom Inc., the founder and president of which is married to Isis investor Dr. Joseline Sangalang Bayer of Annapolis. Isis' vice president and secretary also have ties to Syscom, the newspaper discovered.
State transportation officials have promised to audit all applications that were fast-tracked in the past several years, including during the last Democratic administration. They have also said they will take a close look at Isis to ensure that it indeed qualifies as a minority firm. A spokeswoman for the agency said yesterday that the audit is under way, but she could not give a date for when it will be completed.
Hirschburg has stated that although she requested fast-tracking for her firm, she was never told that she was receiving preferential treatment.
Other members of the Isis team have declined to comment.
A spokeswoman for the Maryland Republican Party declined to comment on Isis or the MDOT audit yesterday. Attempts to reach other Republican lawmakers were unsuccessful.
In Annapolis, Democratic leaders said that they would be eager to delve into the results of the audit.
"The process is very important," said Del. Tawanna P. Gaines, a Prince George's County Democrat and chairwoman of the House Appropriations transportation and environment subcommittee. "We absolutely have to take a closer look to make sure no one is getting special treatment."
Other lawmakers suggested that Isis and its ties to Syscom be investigated further.
"Any of those relationships are suspect and raise concern," said Sen. James E. DeGrange Sr., an Anne Arundel County Democrat and chairman of the Senate Budget and Taxation Committee's subcommittee on public safety, transportation and environment. "You have to look at the details and scrutinize it a little closer.
DeGrange also said that his committee may review the personal net worth cap for individuals applying to qualify their firms as minority and "disadvantaged" firms. The cap for certification to bid on projects with state and federal funding is $1.5 million, not including an individual's primary residence.
"That is certainly not someone who is disadvantaged and has a very meager income and is struggling to make ends meet," said DeGrange. "That should be looked at as well."