The state has abandoned its attempt to put Blind Industries and Services of Maryland into temporary receivership, settling for an independent audit of the agency's operations over the last 29 months.
City Circuit Court Judge Joseph H.H. Kaplan, in ordering the review of programs and finances, said yesterday that the state will have to pay for the audit but may be compensated by the quasi-public agency if any wrongdoing or mismanagement is uncovered.
In a lawsuit filed by the Maryland attorney general last week, the state asked that the state Department of Education be appointed as a receiver to oversee assets of the Blind Industries, a Baltimore-based non-profit group providing education, training and jobs for blind adults.
The allegations of mismanagement, based on a state audit, included payment of a $2,000 country club membership for Blind Industries President Richard J. Brueckner, large raises for top executives, and money spent on various entertainment costs.
An attorney for the agency's board, Stanford Hess, conceded that many of the expenditures were made, but argued that they were incurred in the normal conduct of business. He requested the dismissal of all legal actions against Blind Industries.
The state withdrew its petition for receivership before the judge could issue a formal ruling at yesterday's hearing. Kaplan agreed to the state's request for an audit, but stipulated that the state must pay for it.
"There's no basis for receivership, temporary or otherwise," Kaplan said, noting that the expenditures in question amounted to less than $10,000.
"[But] unless the air is cleared here, there are going to be continuing battles between the state of Maryland and Blind Industries. Blind Industries, even with a $13 million budget, can't afford those battles."
The state provides $1.6 million of the agency's budget. The cost of the independent audit was estimated at $50,000.
Hess called the decision a vindication for Blind Industries. "The judge essentially threw the state's case out," he said.
"Essentially, Blind Industries is back where it was efore we started, maybe in better shape," Hess added, because the state will have to hire an independent auditor instead of using its own accountants.
Deputy Attorney General Ralph S. Tyler, said he was satisfied, too, although he adamantly maintained that the state has the right to seek receivership.
But Ralph Sanders, a former Blind Industries president and leading activist in a group opposed to the agency's current management, said the audit could not compensate blind adults who are poorly served by the agency in the meantime.
"They're simply not providing adequate services to blind people," Sanders said. "You can't six months, 12 months down the road retroactively help blind people who didn't get help now."
The state's lawsuit against Blind Industries also alleges that it failed to hire enough blind employees, as required by law. Hess has said the agency did have to hire sighted workers to work on a federal contract at its Salisbury plant, but had agreed to replace them with blind employees if any more applied.
Also yesterday, a group of blind vendors, the Randolph-Sheppard Vendors of Maryland, urged Gov. William Donald Schaefer to reorganize the agency's board. Blind Industries' 10-member board is appointed by the governor.