Maryland's top transportation official says managers at the State Highway Administration routinely cut corners in following state procurement rules and often asked contractors to perform work outside the scope of their contracts.
State Transportation Secretary Beverley K. Swaim-Staley said a Department of Transportation investigation found no instances in which SHA officials profited personally from violations of the procurement rules.
But she said the practice of shuffling work from one contract to another — which has the effect of concealing changes from the state spending board — must end.
"The rules were not followed, and they need to be," Swaim-Staley said.
In an interview with The Baltimore Sun, Swaim-Staley offered her most extensive public comments on problems at the SHA since they were revealed in a scathing audit released in July.
The Office of Legislative Audits, the investigative arm of the General Assembly, raised concerns about allegedly cozy relations between senior SHA staff and former employees who left the agency and went on to work for private highway contractors.
Auditors said the agency failed to report changes in contracts to the state Board of Public Works, where they could have faced public scrutiny.
Auditors also raised the case of a high-level state construction official who, they said, solicited state contractors to become sponsors of a charity golf tournament with which he was associated.
They reported that the official expedited contract awards to two of those contractors and failed to make all the required ethics disclosures.
The official left the agency earlier this year. Swaim-Staley said the SHA was conducting a search for a replacement.
Auditors reported that another senior SHA official retired and soon took a job with a construction management company that later received a $16 million contract in a procurement process in which he had participated.
Former administrator Neil J. Pedersen retired from the agency the day before the audit was released. State officials and Pedersen have denied any connection between his departure and the audit.
He said at the time of his resignation that some senior officials at the agency had let him down.
Swaim-Staley said the agency has since examined many contracts to see whether they raised concerns.
"We have not found additional conflicts of interest," she said.
After the legislative audit was released, Swaim-Staley asked Deputy Transportation Secretary Darrell B. Mobley to take over the SHA as acting administrator and to uncover any management issues that needed to be addressed.
The agency operates with an annual budget of nearly $1 billion.
Swaim-Staley and Mobley said top-level personnel changes were occurring at the agency, but they declined to go into details, citing confidentiality provisions in state law.
"It's actually fair to say that people may have decided to opt to take their retirement," she said. "People would rather just leave if they can rather than go through a process of change."
Mobley said he had not actively encouraged any SHA managers to move up their retirement. But he and the secretary said further personnel moves were possible as he continues his evaluation.
"There are more personnel changes taking place," Swaim-Staley said.
The secretary said the department's focus so far has been to address the issues raised in the just-completed investigation and to cooperate with legislative auditors in a second examination now taking place at the agency.
Earlier this summer, Office of Legislative Audits director Bruce Meyers said his staff had encountered resistance from some SHA employees when seeking access to agency documents. Swaim-Staley said she had intervened to make sure the auditors had access to whatever they needed to finish their job.
The secretary said she had sent an auditor from her staff to assist with the highway administration, one of six agencies that make up the transportation department.
Mobley said he had not found a pervasive pattern of inappropriate relationships between SHA officials and the companies that provide consultants for the agency's projects.
"I would not say there is a culture of wrongdoing or coziness," he said.
Mobley has moved to protect workers who raise concerns about the agency from retaliation by managers.
Two since-retired SHA employees say they received orders from their bosses to restrict their communication outside "proper channels."
In identical language, the employees say they were told: "[Y]ou are no longer to send, copy or blind copy correspondence to any SHA/MDOT management, other SHA employees or local/state officials."
Swaim-Staley repudiated the wording, which was broad enough to have been interpreted to include reports to state auditors and other investigatory officials. She said such a blanket order did not reflect the values of the O'Malley administration.
Mobley has sent a memo to employees emphasizing the need for "open communication" between SHA managers and employees. The memo stressed that employees' free-speech rights protect them from retaliation if they bring problems or complaints to top-level officials, whether inside the agency or not.
"If an employee wants to talk with me, the door is open," the memo said.
"Employees have the right to call, email or meet with anyone all the way to the secretary or governor," Mobley said. "The climate at SHA needs to be one of mutual trust and respect."
Mobley said that while he wanted employees to take up issues first through the chain of command, he understands there must be an exception when an employee is complaining about a supervisor's actions.
"You're more than welcome to come to me if it's about your direct supervisor," he said. "We want folks to communicate."