The U.S. Attorney's office has ended a federal grand jury investigation into allegations of conspiracy and bribery involving Metro's $43 million automatic Farecard contract in 1975, and for the second time has decided that criminal prosecution is not warranted in the case.
The prosecutor's decision, described in a letter delivered to a federal judge yesterday, represents the final episode of a protracted legal battle that begun seven years ago when Cubic Western Data Corp. of San Diego won the Farecard contract over Control Data Corp. of Minneapolis, the initial developer of Farecard equipment.
U.S. Attorney Charles F. C. Ruff said that "after exhaustive investigation, the matter has been closed because there was insufficient evidence to justify bringing an indictment."
Information that surfaced in civil lawsuits led to a federal investigation involving Metro employe Edward Jasnow, who reportedly said he received $38,000 from Julian Zuke, Jr., a consultant to Cubic Western.
Control Data alleged in court records that the payments to Jasnow were made so that he would pass on information about Metro and Control Data to Zuke and thus help Cubic. Control Data also alleged in court papers that the money was intended to get Jasnow to influence other Metro employes to award the Farecard contract to Cubic. Jasnow insisted the money had nothing to do with Farecard, but was payment for consulting work.
Jasnow left Metro and is now in California, Jasnow's lawyer, Michael G. Schneininger, said yesterday that he and his client were "very gratified" that the prosecutor's office had closed the case.
Zuke's lawyer, Lawrence H. Schwartz, also said he was gratified with the prosecutor's decision. Cubic's lawyer, Richard Hibey, said he was "satisfied the matter is closed once and for all," and noted that Cubic never was a direct target of the grand jury probe. The attorney for Control Data could not be reached for comment.
When U.S. District Judge Louis F. Oberdorfer, who was presiding over the civil litigation, learned of the bribery allegations in May 1978, he ordered the U.S. Attorney's office to begin an investigation. In January 1979, the prosecutors ended that investigation with the finding that the case did not warrant prosecution. But the following October, the investigation was reopened when new information came to the U.S. Attorney's attention. Yesterday, the prosecutor's office advised Oberdorfer that it had decided again to close the case.
Last November, civil litigation involving the Farecard contract was settled out of court with Metro paying $2 million to Control Data, which charged that Metro violated the original contract.