RALEIGH -- A state Division of Motor Vehicles internal investigation found that at least 20 employees, including high-ranking administrators, accepted meals and gifts paid for by Verizon Business, which holds a multimillion-dollar no-bid contract with the agency.
DMV Commissioner Mike Robertson has taken personnel action against nine employees, but none were dismissed. Those involved will receive additional ethics training. The employees who accepted the most meals and gifts are no longer at the agency.
For its part, Verizon fired four of its employees and disciplined a fifth staffer.
The meals, between August 2006 and April 2009, were sometimes modest, including fast-food lunches and snacks delivered to DMV headquarters in Raleigh.
On other occasions, they were dinners at some of the capital's finest steakhouses, where the telecom giant's employees paid for food andliquor. Many of the meals were bought as DMV officials were considering a lucrative extension of Verizon's $51.5 million contract to provide computers and data service to vehicle inspection centers.
Among the dinners:
In February 2007, when DMV supervisor Michael Gaither retired, Verizon picked up the tab for a $781.42 party at the Angus Barn. As the head of DMV's emissions program, Gaither had direct oversight of Verizon's contract. After his retirement, Gaither went to work for Verizon at a reported salary of about $75,000 a year.
In July 2008, John Robinson Jr., the director of the DMV's License and Theft Bureau, retired. A gathering at the Capital City Chop House was attended by DMV and Verizon employees, as well as members of Robinson's family. Verizon picked up the $1,021.18 tab and made a job offer to the departing state administrator. Robinson declined to take the position, according to the report released Friday.
"The relationship between DMV and the contractor was too close," said Robertson, who was appointed last year to lead the agency. "I can assure the public, as long as I am DMV commissioner, that this will never happen again."
License and Theft Director Brian K. Bozard and Deputy Director Debbie Brewer, both of whom retired in May 2009, were investigated for accepting meals and gifts from Verizon that included hotel rooms and tickets to Gov. Bev Perdue's inaugural ball.
The DMV's investigation found that the agency's employees were so cozy with Verizon's representatives that the company was provided an office at DMV headquarters and given security badges that allowed Verizon's employees to enter the building at will.
Brewer was so close to Verizon account manager Andrea Wright that the two traveled together, shared accommodations and were even roommates for a time, according to the report. Brewer would routinely invite DMV workers to dinner and announce to the table she was paying, only to then be seen handing the check to a Verizon staffer who actually footed the bill.
After Brewer resigned from DMV, the report said, it was rumored that Wright planned to hire her at Verizon, replacing a worker then assigned to the emissions program. The Verizon employee to have been replaced, Lori Selvia, filed a complaint with the company's internal ethics division.
Internal investigation
In September, Verizon's lawyers turned over records to DMV indicating 206 expenditures for 62 people.
The DMV's investigation found that many of the entries on Verizon's list were falsified, according to the agency's report. In interviews, Verizon staffers admitted that they had sometimes included the names of additional DMV employees who were not present at a meal on their reimbursement requests because the tab had exceeded the $45-per-person cap allowed by the company's regulations.
In other cases, DMV investigators did not interview retired employees to determine whether they accepted meals or gifts, instead focusing on those still at the agency. It is a violation of state ethics rules for employees to solicit anything of value from a contractor working for the government.
All told, the DMV's review confirmed that Verizon paid for 57 meals and 23 meetings where "snacks" were provided, involving 20 current and former employees. Six spouses and "significant others" of state employees also had their meals paid for.
Robertson said Friday that he had suspended two employees for a week without pay and issued formal written warnings to seven. Five other DMV employees have received "counseling for guidance."
Robertson said he didn't fire the employees because those still at DMV were found to have accepted few meals and often acted at the behest of supervisors setting a poor example.
"Most employees perceived [Verizon's payment of meals] as gestures of friendship and goodwill," the DMV report said.
In addition, investigators found that two Department of Transportation employees and six workers from the state Division of Air Quality also accepted meals paid for by the company.
None of the air quality employees was disciplined, said division spokesman Tom Mather. The division, which is part of the Department of Environment and Natural Resources, was not the Verizon contract administrator, so "there was no state law violated by our staff," Mather said.
Perdue's gift ban
In October 2009, Perdue ordered a ban on employees' accepting gifts from contractors. The Governor's Office, through a spokesman, declined to comment Friday.
A criminal probe into the affair by the State Bureau of Investigation was launched in September and continues, according to Robertson.
DMV investigators did not interview former administrators Robinson, Bozard and Brewer, or Verizon manager Wright, saying they have been identified as "persons of interest" in the criminal probe. Investigators did call Bozard to ask some general questions about Verizon, according to the report, but he hung up on them.
SBI probe nearly done
Jennifer Canada, a spokeswoman for Attorney General Roy Cooper, said Friday that the SBI agents are wrapping up their work and will soon share their findings with Wake County District Attorney Colon Willoughby, who will decide whether to proceed with a criminal prosecution. It is illegal for state employees to accept money, meals or gifts in exchange for favoritism in government contracts.
"The most disconcerting issue identified through the investigation was the fact that administrators who had direct oversight of the Emissions and E-Sticker program and the services provided by Verizon staff, accepted meals form Verizon," concluded the DMV's report. "Regardless of their position, employees who received meals used poor judgment in allowing Verizon to provide them with meals or snacks, and their actions were in violation of DMV ethics policies."
Staff writer Lynn Bonner contributed to this report.
