A federal grand jury here has reopened a criminal investigation into the award of the multimillion-dollar contract for the Metro Farecard machine, according to the U.S. Attorney's office.
The probe is said to focus on the handling of the Farecard contract and other Metro transactions by a mid-level contract administrator for the Washington Metropolitan Area Transit Authority, Edward Jasnow.
Jasnow received $38,000 in payments from a Washington consulting agency hired by Cubic Western, the firm that won the contract away from Control Data Corp. in 1974, according to court records.
Jasnow has denied that the payments, which he received while working for Metro on the Farecard pact and other such contracts, had any relationship to the Farecard transaction. He has said the money was for previous work he had done for the consulting firm.
Jasnow and others involved in the $43 million contract award were investigated by a grand jury here for five months last year after the payments became known in the filing of a civil suit that has grown out of the contract fight between Control Data and Cubic.
The U.S. Attorney's office informed Judge Louis F. Oberdorfer, the judge now handling the civil suit, last January that it had concluded that "no criminal prosecution is warranted." Oberdorfer had referred the matter to the U.S. Attorney's office for investigation.
However, Assistant U.S. Attorney Jeffrey T. Demerath informed Oberdorfer in a letter made public yesterday that "new information" had come to the prosecutor's attention that caused the office to "reopen our investigation into possible criminal conduct on the part of individuals employed by and doing business with the Metropolitan Area Transit Authority."
The "new information" reportedly involves allegations of improprieties in additional transactions involving areas other than the Farecard contract, and further allegations about the relationship between Jasnow and Julian Zuke Jr., who operated E.C.M. Associates, a consulting firm hired by Cubic.
The checks to Jasnow from Zuke ranged from $1,000 to $10,000 and were issued between Janurary, 1975, and July, 1977, according to records in the civil lawsuit.
According to the most recent allegations by Control Data in its civil suit against Cubic, the firm that won the contract received confidential WMATA information from Jasnow and others.Control Data contends in the suit that Cubic unlawfully interferred with existing contract relations between Control Data and WMATA, and participated in commercial bribery by making the payments to Jasnow through E.C.M. Associates.
Cubic has said in answers to written questions filed in connection with the civil lawsuit that it hired E.C.M. Associates "to provide advice and assistance with respect to Cubic's marketing effort and proposal preparation for the WMATA automatic fare collection system contract."
A "consultant agreement" between E.C.M. and Jasnow, also filed in court records in the civil case, indicates that Jasnow was hired by the firm at a rate of $2,000 a month.
WMATA has said during the suit that Jasnow was among its officials that "reviewed, evaluated or selected" Cubic as the recipient of the Farecard contract, and said it did not know of payments to Jasnow by any outside agency until they came to light in the civil suit.
Metro is conducting an internal investigation into the allegations as well, its attorneys have said.
The payments to Jasnow first became public after a Control Data attorney was told by a former Cubic attorney that he was aware "that money had changed hands," regarding the Cubic-WMATA contract.
The former Cubic attorney, Jacob Pompan, told the Control Data attorney that he knew about the financial transactions because one of the persons involved had come for him for advice on how to handle the payments on his income tax return, according to a statement by Control Data attorney Michael Berens.
Pompan described the participants in the scheme as "amateurs -- they used traceable checking accounts," Berens added in his statement in court records.
In other answers to written questions in the lawsuit, attorneys for Cubic Western said "a small quantity of CDC (Control Data Corp.) data was given" to a Cubic employe by Edward Jasnow in the fall of 1974, but said the information was of little use and did not describe it further.
In 1972, Control Data was chosen to design and -- in the firm's expectations -- to produce the fare collection equipment.
The following year, Metro decided to go ahead with the production contract, subject to an agreement on price that was never reached.
In April 1975, Metro decided the production price of $78.9 million proposed by Control Data was too high. Metro later modified the contract it had made with Control Data, limiting it to $1.2 million, chiefly for equipment still in production.
The larger part of the procurement then went to Cubic, which had lobbied openly to take the job away from Control Data. Control Data contends in its lawsuit that Cubic was able to win away the contract because of inside information it acquired from Jasnow and others.
Metro officials, not to mention Metro riders, have been displeased with the performance of the Farecard equipment from the day it was installed. Entrance and exit gates regularly jam, particularly under the stress of rush hour, and vending machines sometimes refuse to accept money or make change.