O.C. Trustees Sign Unisys Pact Despite Perks Uproar
Trustees of the North Orange County Community College District have approved a $1.5-million computer contract with Unisys Corp., even though records show that the board recently fired its chancellor in part for not reporting resort trips and other favors he allegedly accepted from the firm.
The board action--at a time when county prosecutors are investigating former Chancellor James S. Kellerman’s dealings with Unisys--has been criticized by Trustee Chris Loumakis as “premature and irresponsible.”
Board President Otto J. Lacayo, one of two trustees whose investigation of alleged wrongdoing led to the dismissal of Kellerman in May, defended the computer system upgrade, which was approved last week.
“I’m not going to stop doing business for the district simply because one person did something improper. . . ,” said Lacayo, who added that Unisys is the only manufacturer that can supply equipment compatible with Unisys and Univac computers already in use.
“Among the questions we had (involving Kellerman’s conduct) was the acceptance of two weekend trips to Unisys functions at resort hotels,” Lacayo said. “But this does not automatically eliminate Unisys, a very large corporation, from bidding.”
Unisys was the only bidder on the contract to expand the district’s overloaded computer system. But a company spokesman said there was nothing improper with the contract or the board’s 5-0 vote.
However, Loumakis, who missed the June 27 meeting because of illness, said there was no need for the seven-member board to act on the computer contract now. Trustee Steve White also was not present for the vote but could not be reached for comment.
“We should do no business with Unisys until the district attorney gives us an idea what their role was in possibly corrupting our leadership,” said Loumakis, who has previously been censured by his board colleagues for publicly discussing the Kellerman investigation. “We are hardly conducting ourselves fairly when we punish the chancellor and reward the company.”
In a brief interview Thursday, Kellerman declined to comment on the Unisys contract but acknowledged that he had accepted the resort trips, which he said were to attend computer workshops on how to use Unisys equipment.
Kellerman, who has charged in a legal claim against the district that he was wrongfully fired from his $97,000-a-year job, said the Unisys trips were business-related. Kellerman has denied committing any misconduct.
Deputy Dist. Atty. Wallace Wade confirmed that an investigation is under way into charges that Kellerman accepted two all-expense-paid trips from Unisys, one to the La Quinta Country Club near Palm Desert in November, 1988, and the other to the La Costa Hotel and Spa in Carlsbad in October, 1987. Double-occupancy room rates during those months ranged from $180 to $350 per night at La Quinta and $180 to $225 at La Costa.
“That is one of the allegations made,” Wade said. “We have to look at all of them to determine which ones have potential in terms of prosecution.”
A confidential board letter to Kellerman, a copy of which was obtained by The Times, details 13 allegations against the former chancellor and charges that he did not report the Unisys trips on annual ethics statements as required by state law and district policy. In addition, the April 26 letter alleges that the district was billed for a $2,000 Unisys computer that was installed in the chancellor’s home, and that he received free computer-related services from Unisys employees.
Among the other charges detailed in the letter were allegations that Kellerman received a $3,000 personal loan from Assistant Chancellor Joanna Spaulding while working as her direct supervisor, and that Spaulding co-signed a $4,000 credit union loan to Kellerman. The former chancellor was also accused in the letter of improperly arranging to have the district pay a $3,120 repair bill for his district-owned car, submitting duplicate expense reports to receive double reimbursements and claiming to attend education-related out-of-town conferences that he did not attend.
Unisys spokeswoman Charlotte LeGates confirmed that the company held “events” at La Quinta and La Costa resorts on the weekends in question but declined to talk about free accommodations or other gratuities allegedly provided to Kellerman.
“This matter has been and is being reviewed internally,” said LeGates, who spoke from the firm’s Blue Bell, Pa., headquarters. “To our knowledge, all actions that have been taken with regard to our business relations with North Orange County Community College District and its current and former employees have been lawful.”
Citing the likelihood of litigation in the case, she declined to comment further.
Unisys was one of five firms that were solicited for bids to upgrade the district’s computer system. Unisys was the only manufacturer to submit a bid, according to district records. Jack Raubolt, director of information services for the district, said that since the district purchased two mainframe computers in 1976 and 1981 from Unisys at a total cost of $2.4 million, the district had little alternative but to continue to upgrade through Unisys. Converting existing equipment to another manufacturer and retraining staff would have cost $3 million to $3.5 million, Raubolt said.
The upgrade purchase, consisting of a new mainframe and software, is intended to quadruple the memory of the existing system and give the district 10 times the existing processing power. In addition, the cost of the system is expected to be offset by selling computer services to other community colleges. The district’s computer system is now running at capacity, Raubolt said.
“We have 15 major projects that are waiting to be done,” Raubolt said, citing payroll and fall registration for the district, which governs Cypress and Fullerton colleges. “If we had delayed this purchase any further, we would have had to put major projects on hold.”
Trustees Lacayo, Barbara G. Hammerman and Barry J. Wishart also defended the board action as necessary despite the county prosecutor’s investigation. Efforts to reach trustees White, Wallace R. Hardy and Nilane A. Lee were unsuccessful Thursday.
“It was purely a business decision,” Hammerman said. “I felt it was the right thing to do in the normal course of business. I don’t think there was any inappropriateness in any of the actions taken.”
Wishart said the board considered the likelihood of being criticized for the timing of the purchase vote. But he said trustees decided that Unisys was the only realistic supplier and to delay action would make it difficult for employees to do their jobs and increase upgrade costs down the road.
“We’ve got a budget of over $70 million and in excess of 30,000 students, and we have to get them registered and educated, and we cannot do it without an efficient computer system,” Wishart said. “For us to go out and satisfy our computer needs through another company would cost us a substantial amount of money and that just wouldn’t have made sense.”
