Pa. auditor says LCB contract was 'poor judgement'

HARRISBURG - State Auditor General Jack Wagner said yesterday that the Pennsylvania Liquor Control Board might have used "poor judgment" when it awarded a lucrative contract to the husband of an agency manager - but that it had not violated any state law.

Wagner was referring to the $173,000 contract that the LCB recently awarded to Solutions 21 of Pittsburgh, whose president is married to one of the agency's regional managers. The agreement calls for training store clerks and managers in the basics of customer service, including how to greet customers and thank them for their purchases.

Wagner said his office's audit found that the board should have realized that the contract would create "at least the appearance of a conflict of interest."

"It's really that simple," he said yesterday. "It was legal, but we feel very strongly that they should have seen the red flags and should have known that this contract was going to be seriously questioned."

Wagner also said a number of other warning signs should have led the board to reject all the bids, including Solutions 21's, and advertise for new ones - or not award the contract at all.

Questioned by reporters, Wagner added that given the tight economic times, it might have been more prudent for the LCB to delay spending money on employee training.

His office also recommended changes to the agency's procurement process, including ensuring that both management and employees understand and comply with conflict-of-interest laws.

In a statement, LCB chairman Patrick J. "P.J." Stapleton III said that he was pleased the audit did not reveal any violations of state laws or codes and that the agency agreed with Wagner's recommendations.

From the start, LCB officials defended the deal, saying Solutions 21 had submitted the best and lowest offer among five bidders.

They also have asserted that the training is a necessary part of its mission to make its 619 stores more customer-friendly.

"We are in the middle of a major renaissance," said Joe Conti, the LCB's chief executive. "I think professional development of our staff is what's going to sustain all the other missions of this agency."

The agency asked Wagner's office to review the contract after controversy erupted over whether favoritism played a role in awarding it to Solutions 21.