A special Virginia grand jury yesterday accused the former manager of the state government's multimillion dollar printing business of accepting kickbacks from a Richmond printer.
In its first report on allegations of corruption in the state's central purchasing agency, the panel said other printers had received favored treatment and said "other apparent improprieties in the purchase of numerous other commodities." The jury said it would continue its investigation, which has uncovered a bribery scandal in Virginia's equivalent of the federal General Services Administration.
The grand jury's report charged that James A. Padgett, former printing manager for the State Department of Purchases and Supply, received at least $40,000 between 1973 and 1975 from Henry Lotz, owner of White System Inc., in exchange for favored treatment in awarding state printing contracts.
The report recommended that Padgett be indicted, and also suggested that the state undertake civil action against him and Lotz to recover money the state may have lost due to the alleged kickbacks scheme. Virginia law does not empower special grand juries to issue their own indictments.
Circuit Court Judge James Wilkinson, who empaneled the eight-member special grand jury last December, said he would turn over its report to a regular grand jury for immediate consideration.
Neither Padgett, who resigned from the state job in 1975, nor Lotz could be reached for comment yesterday. In a newspaper interview earlier this year, Padgett was quoted as acknowledging he had received more than $30,000 in bribes from an unnamed company.
The grand jury did not identify other state employes or vendors it is investigating. Numerous newspaper reports have identified at least three other former department employes as under investigation and have said the probe has been broadened to include state purchases of furniture and cleaning supplies.
"There's going to be a lot more," said a source close to the investigation who would not predict how many officials would be indicted.
The probe of the agency, which annually buys more than $100 million of printing, furniture, food and other supplies for the state, dates back to 1975 when department head Phillip Brooks asked the State Police to investigate complaints of irregularities in the printing section.
The results of the probe were turned over to Richmond prosecutor Aubrey Davis, who has said there was not enough evidence then to indict anyone. Padgett, who was suspended for a time during the investigation, resigned at the end of that year.
The complaints resurfaced in 1977 when a number of printers repeated them before a state legislative sub-committee. Last year a Norfolk newspaper published a series of articles saying some companies still were getting preferential treatment and charging that investigations into the department had been less than thorough.
The stories led to the impaneling of the special grand jury in December. A month later, Attorney General Coleman issued a report charging that purchasing practices throughout the state's agencies were haphazard and left the state vulnerable to charges if favoritism and corruption.
In March, Gov. John Dalton created a special management team headed by Assistant State Attorney General Robert Kyle to "ride herd" over the purchasing department and hammer out uniform state purchasing procedures.
A month later, the department announced the firings of purchasing manager Roy T. Scott, No. 3 man in the department, and printing buyer Owen W. Matthews.
Sources said Scott, who was officially dismissed for "administrative misconduct and gross incompetence," had bypassed competitive bidding procedures in awarding $211,000 in business to InterRoyal Corp., a New York-based furniture manufacturer. Scott has denied any wrongdoing and is appealing his dismissal.