An internal report released Friday by the state Division of Motor Vehicles confirms that Verizon Business bought alcohol for state employees while negotiating a lucrative no-bid contract to support the state’s vehicle inspections program.
The adult beverages were part of nearly $21,000 in meals, snacks, drinks, and gifts the telecommunications company claims it bought between 2006 and 2009 for DMV, state Division of Air Quality, and state Department of Transportation employees.
Several of those meals were at pricey restaurants such as Fleming’s Prime Steakhouse, the Angus Barn, and Sullivan’s Steakhouse. Others were at establishments that primarily serve alcohol, including $273.44 at the Grove Park Inn’s great hall bar in Asheville and $154.80 at the Peabody Hotel’s lobby car in Orlando.
As Carolina Journal first reported in November, Verizon and the state agencies involved declined to say whether alcohol was included on the tab. But the internal investigation reveals that Verizon representatives did purchase booze for state workers off the clock.
“From what people who participated told us, alcohol was provided with meals sometimes, but this was always on off duty hours,” said DMV spokeswoman Margaret Howell. “We don’t have any specific records or receipts detailing how much or when.”
State law bars public workers from being reimbursed with taxpayer dollars for alcoholic beverages, even if part of a meal that would be refundable otherwise. In 2009, Gov. Bev Perdue issued an executive order barring cabinet agency employees from accepting gifts from contractors.
In the report (PDF download), DMV disputes the number of meals and staffers involved, claiming that Verizon’s accounting of the expenses “contained a significant amount of fraudulent and inaccurate information.” The agency said 20 employees were involved, not 62 as Verizon claimed, and of those only two had apparent authority to influence the $51.5 million contract with the company.
“I sincerely hope that this experience serves to put our current vendors and those who wish to do business with DMV on notice that we will operate only ‘on the table’ in dealings with them and that our employees know and appreciate the ethical guidelines they must uphold now and in the future,” said DMV Commissioner Mike Robertson in a statement.
Robertson stopped short of firing the workers involved. Instead, he handed out suspensions and written warnings, and required ethics training. That doesn’t go far enough for government watchdogs.
“This scandal highlights the need for strong revolving door legislation,” said Joe Sinsheimer, a Democratic strategist turned government-transparency advocate, pointing to one DMV employee who left the agency and immediately went to work for Verizon.
Robertson said he didn’t fire the workers because those still employed by the agency didn’t accept many meals and typically did so at the request of supervisors, the News & Observer of Raleigh reported.
Beyond the meals and gifts, the report describes a snug working arrangement between Verizon and DMV administrators. Verizon staffers had an office inside the DMV headquarters a few doors from the deputy director’s office. They also were given security badges and often accompanied staff on trips.
“This made it difficult for DMV employees to distinguish Verizon representatives as vendors,” the report says.
Verizon has fired four of its employees and taken disciplinary action against a fifth. The State Bureau of Investigations opened a criminal probe into the gifts in September.
David N. Bass is an associate editor of Carolina Journal.