ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, July 5, 1996 TAG: 9607050080
SECTION: VIRGINIA PAGE: B-1 EDITION: METRO
SOURCE: LESLIE TAYLOR STAFF WRITER
A now-defunct state agency whose mission was to enhance the quality of child care may become the subject of an FBI investigation into possible bid-rigging.
The Virginia Council on Child Day Care and Early Childhood Programs - abolished by legislation as of June 30 - directed a consultant to give the FBI the results of his six-month review of council records.
The council had hired Mark Kindt, a Cleveland lawyer, to conduct the review after a 1995 state audit showed problems in the council's accounting records for the 1993-94 fiscal year.
Kindt - a former government lawyer, deputy attorney general in West Virginia and director of the Federal Trade Commission's regional office in Cleveland - said this week that the FBI "was interested [in his report], but I can't say really positive or negative." The report was turned over last week.
Kindt's report focused on contracts awarded in 1993 to three agencies - one of them Roanoke's Council of Community Services - to conduct the Centers for Families That Work, a pilot program designed to help working families find quality child care. The centers were to receive a combined $1.2 million in federal child development block grant funds.
In his 34-page report, Kindt wrote that some agencies that were potential bidders for contracts to operate the centers were involved in writing contract specifications. Kindt also said that the Virginia Child Care Resource and Referral Network, a professional organization, had improperly influenced the contract specifications.
"It appears the request for proposals was written narrowly to exclude any providers who were not active in the state resource and referral network," Kindt said this week. Seven of 10 people who attended a Centers for Families That Work planning meeting in 1993 "appeared to have a relationship with the network," he said.
"In my experience as a government lawyer, it was unusual and off the map in terms of level of impropriety."
His review focused on council activities during the time it was headed by Mary Ellen Verdu of Salem, an appointee of former Gov. Douglas Wilder.
The charges have angered Verdu, who was executive director when the Centers for Families that Work contracts were awarded. Verdu said this week that the council called on the expertise of resource and referral people, but that contract specifications were written by council staff.
"We had one meeting that we invited people to, to come up with ideas," she said. "They were experts in the field, resource and referral people, early childhood experts, members of our staff. We brainstormed. But none of the people who ended up bidding had any hand in writing the contracts.
"It makes me very angry, as if they're trying to pursue me for some reason and ruin whatever reputation the council had."
Verdu was executive director from March 1992 until April 1994, when Gov. George Allen appointed Elizabeth Ruppert to replace her.
During the early years of Verdu's tenure, "it appears the council staff made the decision to open up the decision-making process to outsiders," Kindt said.
In a letter to Allen, council Chairman R. Jefferson Garnett, a Louisa lawyer, called Kindt's report "a detailed analysis and powerful indictment of how the process of awarding contracts in our state became corrupted by special interest practices.
"Even more striking than these serious findings, the report exposes how a pernicious ideology has been promoted nationally in child day care and has marched into Virginia unencumbered by the penetrating light of vigorous public debate."
Verdu said she has no clue as to how anyone could draw "conspiratorial charges" from any of the council's records.
"This is some sort of far-right philosophical something wrapped up in conspiracy that is beyond reality," Verdu said. "The idea that there was some conspiracy working is just purely delusional. It has nothing to do with child care."
The council was founded in the late 1980s during the administration of former Gov. Gerald Baliles. Its function was to plan, coordinate and evaluate all state child day care and early child development programs and administer federal child-care development block grant funds.
Most of the block grant funds have been used to provide child-care subsidies to low-income working families. The money - $17.7 million for the federal fiscal year that expires Sept. 30 - now is administered in the Virginia Department of Social Services.
Last year, after an audit showed problems in the council's accounting records, Allen asked 14 of the council's 15 members to resign and named new appointees. Garnett, a former Republican Party activist, was the only member to retain his position.
The audit, conducted by the state auditor of public accounts, found inadequate documentation, coding errors in recording transactions, violations of state procurement regulations and other problems that made deciphering the records difficult, said Walter Kucharski, the auditor.
The state attorney general's office deemed them technical violations, not criminal violations, Kucharski said. But they were violations "that we don't come across very often," he said.
State Sen. Stanley Walker, D-Norfolk, said he intends to check with state authorities on the entire investigative process. Walker, chairman of the Commission on Early Childhood and Child Day Care Programs, a legislative body, said he was disturbed by the report and "amazed" that an outside consultant hired by a state agency had the authority to turn something over to the FBI.
"That, I would think, would have to come from state government," he said.
But Kindt said he was only carrying out the council's instruction.
"Keep in mind that no citizen needs authority to report evidence," he said.
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