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Audit finds conflict of interest in MTA contracts

January 17, 2019

ANNAPOLIS, Md. (AP) — The state’s Office of Legislative Audits uncovered potential conflicts of interest among contracts made by a former Maryland Transit Administration employee, according to a report released Monday.

The report presented evidence that the unnamed MTA management employee had, through the particular wording of these contracts, gotten around state regulation of subcontractor procurement in order to pay a total of $4.5 million to a vendor with whom they had close relationships.

Two people working for this vendor were close relatives of the unnamed MTA employee, according to the report. The MTA manager also owns properties where two more vendor employees live and another property where the vendor’s CFO operates a business, auditors reported.

The work included four snow and ice removal contracts totalling $6.2 million. The MTA has paid out $3.6 million toward these contracts as of August; $1.5 million of that was paid to the related vendor as either a prime contractor or subcontractor.

The report found three invoices for snow and ice removal totalling $66,400, a $20,000 overpayment compared to the competitive pricing regulations normally used for contractor acquisition, auditors found.

The legal language of some of these contracts also allowed prime contractors to pay their subcontractors for what auditors found to be unrelated work.

In one example, the audit found invoices totalling $15,420 in charges for “delivering bottled water to a light rail office” and driving a light rail employee to a hardware store — activities the MTA deemed unrelated to their contracts.

Of the seven contracts reviewed, the MTA employee was project manager of six totalling $24.2 million.

The audit was conducted in response to a complaint made to the fraud, waste and abuse hotline at the Office of Legislative Audits (1-877-372-8311). Reports may also be made online: https://www.ola.state.md.us/fraud/form/.

An MTA spokesman said in an email to Capital News Service that they worked closely with the Office of Legislative audits for this special review and that these issues resulted from the actions of one individual who no longer works for the agency.

The MTA is a unit of the Maryland Department of Transportation tasked with constructing, maintaining and operating the Baltimore metropolitan area transit system and its commuter services.

Officials referred the matter to the criminal division of the Office of the Attorney General and suggested a referral to the State Ethics Commission.

The Office of the Attorney General would not confirm or deny an investigation and declined to comment further.

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