By Sean Yoes,
Afro Staff Writer

FIRST IN A SERIES

Although Morgan State and the University of Maryland Baltimore County were each accused of mishandling millions of dollars designated for campus construction during this decade, the allegations against the two institutions were treated very differently – and in Morgan’s case, more harshly – by both state legislators and The Baltimore Sun, a special investigation by the Afro has found.

The unrelenting criticism of Morgan by certain law makers and the daily press was fueled, in part, by the way complaints were filed against the historically black university and UMBC.

“Our audit disclosed significant deficiencies related to MSU’s management and oversight of its capital improvement projects,” legislative auditor Bruce Myers stated in a letter. When the Office of Legislative Audits raised questions about Morgan in an audit made public February 8, the findings and recommendations – all 17 of them – were placed prominently within the audit, forcing the school to respond.

By contrast, the allegations about the misappropriation of UMBC construction funds were placed in the “background information” section of the audit, which meant UMBC officials were not obligated to respond to the charges. There were no findings or recommendations connected to the construction scheme published within the audit, which was released after the completion of the General Assembly. Consequently, no hearings were ever scheduled in Annapolis.

The difference in the way the audits were handled – and the timing of their release – troubles State Sen. Verna Jones of West Baltimore’s 44th District..

“If the information is going to be used, then there is a responsibility for it to be used in the same fashion,” said Jones, co-chair of the Joint Audit Committee. “We can’t have two different standards of how to deal with information.”

In view of Morgan’s current audit troubles, some legislators of threatening to rescind the school’s authority to manage its own construction projects, authority the school fought hard to win in 2006.

Delegate Norman Conway of Wicomico County, for example, said during a House Appropriations Committee hearing in February, “Autonomy is granted and autonomy can be taken away.”

The actions of the auditors and lawmakers’ criticism of Morgan State have been front-page stories in the Baltimore Sun, the city’s major daily newspaper.

Even before audit of Morgan was made public, The Sun began publishing seven articles – most of them on the newspaper’s front page – within one month, all questioning Morgan’s competence and ability to manage campus projects.

“Morgan skirted rules on contracts,” reads the headline of a story on the Sun’s front page dated January 30. The Sun also published an editorial titled, “Morgan’s building mess.”
It said, “The legislative audit that detailed contracting problems at Morgan State University has raised lots of questions.”

 State Sen. Nathaniel McFadden remembers his first reaction to the stories and editorials.

“My first concern was how quickly The Sun got a hold of this issue and how quickly public opinion was framed against Morgan,” said McFadden, President Pro Tem of the Senate. “There have been other schools in the system, UMBC and others, that have had problems, but they have not reached the level of attention in The Sun paper.”

Excessive attention notwithstanding, the charges that Morgan allegedly padded the price of its construction projects in order to have extra operating funds is a serious one.

 “For one project we reviewed, with expenditures totaling $7.4 million as of June 30 2007, a number of questionable matters were identified which resulted in their referral to the Criminal Division of the Office of the Attorney General,” stated legislative auditor Bruce Myers, in the audit’s cover letter to the members of the Joint Audit Committee. 
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In a statement, Morgan said: “The majority of the deficiencies involve the failure of staff to follow state procurement regulations in the letting and awarding on bids of campus construction projects. The Administration regrets the difficulty in which the University finds itself, and has moved aggressively to implement internal controls that should prevent such mistakes in the future and improve capital program operations.”

Before Morgan plunged into what the Sun calls a “building mess,” UMBC had become embroiled in a building mess of its own.

From 1998 to 2004, five university employees – Patrick Sisk, Joseph Shryock, Dennis Roberts, Joseph Cheek and Andrew Reider, the alleged leader –  were portrayed by prosecutors as a ring of thieves that bilked UMBC of hundreds of thousands of dollars through a construction contract scheme. All five have been convicted of various crimes connected to the scheme.

“From 1998 to 2004, Andrew Reider engaged in a pattern of soliciting bribes from contractors and stealing from the University of Maryland Baltimore County (“UMBC”),” according to the formal statement of facts in the criminal case against Reider.

“Reider steered business to his contractor friends, in exchange for substantial personal benefits, such as home improvements, mobile phone service, golf outings, and other entertainment expenses,” the statement continued. “Reider also orchestrated a scheme to have a subcontractor over-bill the University, which created a slush fund in the subcontractor’s bank account under the control of Reider. Reider directed the disbursement of approximately $136,000.”

The UMBC illegal construction scheme may be connected to millions of dollars of construction projects over the course of several years.

From May 1984 to May 2004 Reider was UMBC’s Project Manager in the Construction Services department. He wielded wide power over the projects he managed and he, “supervised virtually all work performed at UMBC by general contractor Hayes Construction Company,” according to the Attorney General’s filing.

Hayes Construction Company was one of the four pre-approved, on-call general contractors available for construction projects at UMBC from 1980 to 2006.

“As a result of Reider steering business to Hayes Construction, Hayes Construction performed more work at UMBC than any other on-call contractor during the course of this scheme,” according to the Attorney General’s statement of facts against Reider. “Unlike any other contractor, Hayes Construction had a constant presence on the UMBC campus, including a fenced compound, where they kept a trailer of offices that was wired with computers and telephones. The compound remained on campus from 1988 until February of 2005,” according to the Attorney General.

Reider controlled millions of dollars in construction bids on the UMBC over the course of several years, with the lion’s share going to Hayes Construction. In the years 2000 and 2001 alone, at least $14 million in construction took place on the campus.

Despite the massive fraud and criminal convictions, the Baltimore Sun published a total of five articles connected to the UMBC case. At its current rate, the paper will end up publishing ae least two or three times as many stories on Morgan.

In a written statement to the Afro, the Sun said:

“Recently, auditors examining Morgan State University referred findings to the Attorney General’s office, resulting in a criminal investigation involving several million dollars of state funds.  In 2006, the Attorney General’s office discovered that approximately $130,000 of state funds had been embezzled, leading to the convictions of four individuals.  Our editors make decisions every day in scaling stories based on their scope and impact to our readers. No two stories are identical. We have a responsibility to deliver local news that watches out for community interests, including how their tax dollars are being used. We believe our coverage has been appropriate considering the findings of the audit and the scale of tax dollars involved.”

Auditors defend their different approach to Morgan by claiming because the UMBC case had been referred to prosecutors, there was no need to include broad findings with the internal audit of UMBC.

Bruce Myers, supervised both the Morgan and UMBC audits. “I can tell you in that case UMBC found a problem, they had it referred to the AG (Attorney General), the investigation was ongoing and their internal auditors were working with the AG and we made sure they were doing all the things they should be doing,” Myers said. “So we didn’t have any recommendations to make that they weren’t already doing.”

He denies that he operated on a double-standard.

“It was our judgment, there’s a lot of judgment in this but, we’re professionals,” Myers said. “We have CPA’s here, we have certified fraud examiners here and every case is a little different.”

McFadden argues that Morgan was indeed treated differently.

“What this whole battle is about is whether historically Black institutions are adequately funded and they can compete competitively for students and that’s what this is all about,” he explained. “That’s the big picture – comparability and equity. Morgan’s is in this war about duplication, which, again is all about allocation of resources.”

(Next Week: Using Morgan as a political ping-pong ball)