'Floundering' tech center given last chance by state Official says NITC must show progress

Maryland's top economic development official is leaving the door open for resumed funding of the National Information Technology Center if that "floundering organization" can right itself after a staff purge last week.

Mark Wasserman, the state's secretary of employment and economic development, said late last week that he had cut the state's losses on the semipublic venture after becoming increasingly disillusioned with the Rockville-based organization's performance and management.


Mr. Wasserman said the state has essentially cut off the flow of money to the center except for one more month's funding at bare-bones levels. The remaining money would be used to "keep the ship afloat" while the state gives the organization's board an opportunity to adopt a new approach to carrying out its mission, he said.

"We have been turning up the heat on this organization, and now it's real hot," Mr. Wasserman said. If no progress is made in November, he said, it will probably mean "the end of NITC as we know it."


The NITC, created about 2 1/2 years ago and supported by about $2 million in state funds to date, was launched with the mission of helping to turn emerging information technologies into an economic benefit for Maryland companies.

Mr. Wasserman said that while Maryland was unhappy with NITC's performance so far, the state remains committed to helping Maryland's information industries. He said information technology is the state's largest high-tech sector, accounting for 70,000 jobs.

But some members of the General Assembly said they would be cool toward any request for additional money for an organization whose performance Mr. Wasserman described as "poor."

Implicit in Mr. Wasserman's remarks was a dissatisfaction with NITC's management, led by Michael Walter, who said yesterday that he remains president of the center although "things appear to be in a state of flux."

Mr. Walter has been out of the office for the past week and a half -- a period during which five of the six remaining staff members were laid off, according to a former NITC employee.

Mr. Wasserman said the state has been expressing its unhappiness with NITC's performance since early spring, when his department notified the center that future state funding would not be automatic.

In two letters to Ivor Knight, then chairman of NITC, in May and June, Mr. Wasserman criticized the center for failing to establish strong ties with Maryland-based technology companies, for failing to raise sufficient funds from private sources,and for maintaining a top-heavy management. A source close to the NITC said the organization had three vice presidents, in addition to Mr. Walter as president, when it reached its peak employment of 13.

In an interview, Mr. Wasserman was particularly critical of the $140,000 annual salary being paid to Mr. Walter. "We could not condone state support at those levels," he said.


Reached yesterday at his Great Falls, Va., home, Mr. Walter defended his tenure at the center.

"Given that it has been operational for only a year and a half, NITC by any objective measure is a success, and I am very proud of it," Mr. Walter said. He added that NITC was "a proposal that was sold to the state long before I was ever brought on board," and he noted that he did not set his own salary.

Dr. Paul Schneck, NITC's acting chairman, said yesterday that the group's executive committee would recommend to the full board that the center's mission should be broadened to take in computer technology as well as information systems. He would not discuss Mr. Walter's future or any other personnel matters.

Dr. Schneck expressed confidence that the center can show Mr. Wasserman the type of progress he wants to see before funding is renewed.

Some legislators with oversight responsibilities for the Department of Economic and Employment Development said they would keep an open mind toward any new request for state funds to reinvigorate NITC. They included Sen. Laurence Levitan, the Montgomery County Democrat who chairs the Budget and Taxation Committee, and Del. Samuel I. "Sandy" Rosenberg, a Baltimore County Democrat who heads an Appropriations subcommittee.

But Sen. Julian L. "Jack" Lapides, a Baltimore Democrat who opposed NITC funding last year, predicted that the Schaefer administration would have a tougher time persuading the General Assembly to bankroll "that high-tech rip-off" a second time. "Why they would even consider putting good money after bad is beyond me," he said.