By Amy Silverman
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The firm saw its personal relationship with Symington as a clear signal it could milk the state cash-cow, so long as the company went along with the governor's requests to do extra work with promises of future payment.
"Based on the fact that the project is large, the client is good for the money and the Governor is also a private client of the firm, I think the risk is minimal," Schultzel wrote.
The need to go through normal procurement procedures was never discussed in the memo. After all, the company already had won the first contract with insider information. Schultzel's memo indicates neither the firm nor Symington and Leckie seemed worried about any future problems.
"They [Symington and Leckie] asked that we begin implementation on one of the agencies in good faith 'on the come,' with the understanding that we would be paid in the next fiscal year," Schultzel wrote in the memo, addressed to Coopers & Lybrand partner Nick Moore.
Coopers & Lybrand could not be paid in the next fiscal year for the implementation work unless the firm's first Project SLIM contract was modified or a new contract was awarded. Neither Symington nor Leckie could legally guarantee, ahead of time, that such steps would be taken. But that didn't stop the governor and his top aide from doing just that--promising future payments for Project SLIM implementation months before a formal proposal for such work was publicly offered and bids were received, according to Schultzel's memo.
Schultzel didn't immediately bite at the promise of future reward offered by Symington and Leckie. Instead, he raised the ante with two requests.
First, Schultzel told Leckie and Symington that Coopers & Lybrand wanted the state to approve a $437,000 change order on its initial Project SLIM contract.
Second, Schultzel demanded that the state begin immediate payment of the $1.5 million in fees related to that contract, even though the state wasn't required to pay the fees until Coopers & Lybrand completed the work in July 1992.
According to Schultzel's memo, the governor and Leckie agreed to the terms.
"I believe that their actions this week demonstrated that they are solidly with us and mean to be our partners in this endeavor," Schultzel wrote.
Indeed, the state agreed in February 1992 to begin early payment of the Project SLIM contract to Coopers & Lybrand. Leckie also made a strong run at having the $437,000 change order approved, even obtaining legal advice from a private law firm. It was this action--the improper commissioning of outside legal advice, which is a minor infraction of state procurement law--that Leckie admitted in his settlement agreement with Woods.
Even with a legal opinion contending the change order was justified, however, Leckie was unable to overcome strong opposition from other Project SLIM officials.
Coopers & Lybrand also kept up its side of the deal. But the firm didn't have to do the work "on the come." Instead, the state Department of Transportation awarded a no-bid contract that paid $80,960 to Coopers & Lybrand in the spring of 1992 to begin Project SLIM implementation at ADOT.
About the same time, the Governor's Office attempted to quietly modify Coopers & Lybrand's first Project SLIM contract to include implementation programs that could be worth up to an additional $4.5 million. The contract modification would avoid any public bidding on the implementation work and fulfill Symington's and Leckie's earlier commitments to Coopers & Lybrand.
The Attorney General's Office shot down that attempt to steer money to Coopers & Lybrand through a contract modification, saying the amount of money and change of work required a new contract.
The Governor's Office was then forced to offer public bids for the implementation project. Eighteen firms, including Coopers & Lybrand, submitted bids. Two of the five members of the selection committee were from Project SLIM and a third was from the state Department of Transportation--both departments under Symington's direct control.
Coopers & Lybrand won the bulk of the implementation work and was paid more than $3.1 million over the next year.
The Attorney General's Office hasn't completely closed the door on additional action in the case.
"The settlement with Coopers does not interfere with our investigative authority and does not release any person not named," says Assistant Attorney General Suzanne Dallimore, chief of the antitrust unit.
The settlement agreements also require Coopers & Lybrand and Leckie to assist the attorney general in any further investigation of Project SLIM contracts.
"We will take advantage of that," she says.
But so far, Woods and his staff have given no public indications that the attorney general is undertaking a serious investigation into Governor Symington's financial relationship with his personal accounting firm, or his role in awarding of state contracts worth $4.6 million to Coopers & Lybrand.
And these last two weeks would have been the time to expect such indications.