Firm hires governor's fund-raiser to pitch program to agencies

By: TOM CHORNEAU - Associated Press | Wednesday, January 19, 2005 9:25 PM PST ∞

SACRAMENTO -- A company struggling to help the Schwarzenegger administration slash purchasing costs hired a consulting firm with close ties to the governor to prod state agencies to join the procurement program.

Virginia-based CGI-AMS hired Wilson-Miller Communications this month. The firm is co-owned by Marty Wilson, is a top political adviser to Gov. Arnold Schwarzenegger and his main fund-raiser. Last May, the administration hired CGI-AMS to help the state trim its $4.9 billion annual purchasing bill.

Wilson's partner, Beth Miller, was hired to develop a marketing and education program aimed at getting more state officials to join the "strategic sourcing" program -- a new initiative that uses the state's buying power to cut vendor prices, said a spokeswoman for CGI-AMS.

So far, the program has fallen well short of expectations -- saving less than 10 percent of the $96 million goal Schwarzenegger set for this fiscal year.

Miller's role is to design only a communications program, not to lobby, said Diane Roman Fusco, spokeswoman for CGI-AMS. Still, Roman Fusco said the education program is being developed and could involve Miller making face-to-face contact with state officials.

"My understanding is that Beth had worked in state agencies before and has a lot of experience and understanding of how these people work and busy they are," said Roman Fusco. "She demonstrated strong skills and delivered some good ideas on how we could reach those people effectively."

Miller, who once worked for Republican former Gov. Pete Wilson and Secretary of State Bill Jones, said she is providing "corporate communication" services that have no connection to her partner's position as the governor's fund-raiser.

"I'm working with senior management at CGI-AMS on how they can make this project successful," Miller said. "I have broad experience in Sacramento and with the state. I'm well qualified to do this work."

She said that she is not working for the state and said it was "highly unlikely" that she would ever contact any state managers in her role with CGI-AMS.

Terms of the agreement were not disclosed.

Some critics viewed CGI-AMS' hiring of Wilson-Miller as a means to put pressure on state purchasing agents.

"This is the worst kind of influence peddling," said Jamie Court, president of the Foundation for Taxpayer and Consumer Rights, a Santa Monica-based consumer group. "This type of cash register politics is the very thing that Schwarzenegger ran Gray Davis out of office for."

The procurement program, called strategic sourcing because it requires comprehensive planning before an organization spends money, is one of the first initiatives Schwarzenegger chose to undertake as part of his effort to make state government more efficient.

Although administration officials still have high hopes for the program, to date CGI-AMS has completed just one moneysaving deal -- a renegotiating of an office supply contract that will net about $9 million through July 2006.

The administration has adjusted downward to $46 million what they still expect the purchasing program to save before the end of this fiscal year. The program was a key recommendation from Schwarzenegger's landmark plan to remake state government, called the California Performance Review.

Analysts at the Performance Review estimated that as much as $30 billion could be saved over a five-year period if idea such as strategic sourcing were adopted.

The three-year contract calls for the company to help state employees negotiate purchasing deals and will receive on a sliding scale a share of the savings. Thus, the more agencies and departments participating, the more the company will earn.

Because much of what the state spends is not directly controlled by the administration -- including the nearly $50 billion that goes to schools -- success of the purchasing program's depends on getting voluntary participation.

Roman Fusco, however, said the hiring of Miller should not be read as a sign the company is worried state officials are resisting the program.

"We are just trying to provide as good a program as we can," she said.

CGI-AMS, which has no other procurement contracts like the one with California, donated $25,000 in March to Schwarzenegger's California Recovery Team -- a campaign committee that Wilson helps oversee.

A spokesman for the governor's office said they are not commenting on the contract. But the governor has repeatedly said that he makes no decision based on campaign contributions or special-interest influence.

On the Net:

http://www.cgi.com/web/en/home.htm

CGI-AMS Home page

http://www.governor.ca.gov/state/govsite/gov--homepage.jsp

Governor's home page