Fancy meals precede awarding of contract

RALEIGH -- In June 2008, days after administrators at the state Division of Motor Vehicles awarded a lucrative no-bid contract extension to Verizon Business, the company hosted a meal for 15 state employees at the Capital City Chop House.

The bill, which included the tab for two wives and a boyfriend, came to $1,021.18. Two Verizon salesmen picked up the check.

The trip to the steakhouse was one of more than 200 occasions in the last four years in which Verizon says its staff provided meals and gifts to high-ranking employees from DMV, N.C. Division of Air Quality and state Department of Transportation. Many recipients directly oversee the company's $51.5 million contract to provide computer services and technical support to the state's vehicle inspections program.

The names of nearly three dozen DMV employees appear on a list of those Verizon says accepted steak dinners, spa treatments and a ticket to a Carolina Hurricanes game.

In addition to meals at such pricey Triangle restaurants as The Angus Barn, Sullivan's Steakhouse and 42nd Street Oyster Bar, the company paid for catered lunches of barbecue and deli meats at DMV headquarters.

Other times, the meals were more modest, such as burgers and fries at Five Guys and Domino's pizza.

The company's sales staff filed more than $21,800 in reimbursement claims for entertainment expenses involving state workers. Some DMV employees also filed expense claims for the same meals the Verizon employees said they paid for.

The State Bureau of Investigation is probing whether Verizon employees or the state employees broke the law, including examining whether those who accepted the meals and gifts made decisions that financially benefited the company.

Chrissy Pearson, spokeswoman for Gov. Beverly Perdue, said Tuesday that the state's chief executive is following the investigation closely.

"Gov. Perdue believes, above all else, that those who work in service to the state must adhere to the highest ethical standards," Pearson said.

Claims documented

The list of perks provided by Verizon was released Tuesday by DMV Commissioner Mike Robertson following a public records request from The News & Observer and The Charlotte Observer. The newspapers reported Saturday on issues involving DMV and Verizon, including hundreds of inspections computers the state paid for that the company never delivered.

In an interview last week, Robertson declined to say how many employees were involved, citing the criminal investigation. The documents released Tuesday list 62 people Verizon says accepted its hospitality, as well as details of the items provided.

The list does not provide titles or job descriptions, but at least 37 people are current or former employees of DMV, the Department of Transportation or Air Quality. The remaining people appear to be the spouses, boyfriends and girlfriends of the state employees, as well as consultants working for the state.

Nearly all the state employees whose names appear on the list are still on the job.

"The fact that an employee's name is on the list does not prove wrongdoing," said Robertson, who asked for the SBI to investigate last month within hours of receiving the list from Verizon.

A former SBI agent who took over the top job at DMV in March, Robertson said Tuesday that the criminal investigation is likely to take weeks, if not longer. After that, DMV will conduct an internal investigation to determine whether personnel action is warranted.

A spokesman for Verizon said the company will take disciplinary action against five of its employees for violating the company's ethics policy.

eSticker deal

Among those listed as being among the most frequent recipients of Verizon's largess was Deborah Brewer, deputy director of DMV's License and Theft Bureau.

Brewer and her boss, bureau director Brian K. Bozard, both retired May 1, shortly after Robertson reopened an inquiry into whether the pair had accepted $900 in tickets to sit at Verizon's table during Perdue's Inaugural Ball in January.

Bozard is listed as Verizon's guest on seven occasions, sometimes accompanied by his wife. Brewer, along with her boyfriend, received 89 meals and gifts on the company's dime, according to Verizon's accounting.

Bozard and Brewer, neither of whom could be reached for comment Tuesday, helped oversee DMV's implementation of the eSticker program, a digital system for tracking state automotive inspections that ended the need for windshield stickers.

Launched in November 2008, eSticker required new computers for all state inspection stations. The agency sought no competitive bids before signing a 5-year deal with Verizon that paid the company a $5.3 million "down payment" for 3,000 inspection computers, as well as a $1.70 transaction fee from each inspection, expected to yield total more than $6 million annually.

As DMV's top cop, Bozard was paid $103,704 a year. Brewer made $90,177 a year.

Brian Phillips, an environmental program supervisor at the Division of Air Quality, was assigned to work with DMV staff to make sure the new equipment provided by Verizon to monitor automotive exhaust worked as it was supposed to. He is named on Verizon's list as attending 57 events, including the hockey game and a visit to a hotel health club. He could not be reached for comment.

Paul Gordey, an engineer at Air Quality, is listed as being at 70 meals paid for by Verizon.

Reached at his office Monday, Gordey said "It's not true," before referring questions to the agency's public affairs staff.

Staff writers Benjamin Niolet and Lynn Bonner contributed to this report.

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