Contract With GOP Consultant's Firm Under Review for $1 Million in Spending

Maryland officials said yesterday that they are reviewing more than $1 million in expenditures related to a consulting contract with a firm headed by Alan B. Fabian, a well-connected Republican businessman who pleaded guilty this month to a multiyear fraud scheme involving other companies.

The state contract, approved during the administration of then-Gov Robert L. Ehrlich Jr. (R), authorized spending on "strategic budget consulting services and software" from CMAT International of Baltimore, starting in 2005. Fabian, the chief executive, later served as finance chairman for the unsuccessful U.S. Senate bid of then-Lt. Gov. Michael S. Steele (R).

During his tenure, Ehrlich sought to re-examine budget practices of state agencies in hopes of streamlining their missions and reducing costs. Democrats broadly panned the effort as unsuccessful.

Henry Fawell, a former Ehrlich press aide, said yesterday that the contract with CMAT was competitively bid and approved by the Board of Public Works, a panel that included the state treasurer and comptroller.

"There is nothing to suggest the work was not appropriate and effective," said Fawell, who now works in Ehrlich's law firm.

Shaun Adamec, a spokesman for Gov. Martin O'Malley (D), said less than $40,000 of the spending occurred after O'Malley took office in January 2007. Only two state agencies used services related to the contract, he said.

"We've asked the agencies to review the work that was produced," Adamec said. "It's not something that the agencies will use again."

Joseph Shapiro, a spokesman for Comptroller Peter Franchot (D), said his office was examining options related to the contractor.

"Situations like this underscore the need for due diligence in reviewing state contracts," Franchot said in a statement.

Prosecutors have said Fabian defrauded banks and businesses of at least $32 million from 2001 to 2004 in a scheme involving several entities, including a Georgia computer-leasing company. Fabian was indicted on 26 counts, including money laundering.

Fabian, of Cockeysville, Md., pleaded guilty to two counts of the indictment this month and is expected to receive prison time.