Metro has begun investigation into allegedly improper conduct by at least three of its officials -- and possibly several other employes -- in their handling of the $43 million Farecard machine contract, according to federal court documents.
Control Data Corp., the firm initially hired to develop the controversial Farecard system, gave unspecified small gifts to Metro employes and then received improper access to confidential internal Metro documents about the bidding process for later stages of the system, the documents show.
Among those accused by Metro of leaking the inside information was the then-project manager for the system, Ralph Sheldon, who is now assistant director of the office of equipment design. Sheldon, who was informed in September that he was being investigated by Metro for leaking the material, has said he passed on the information, according to the court records.
Sheldon declined to comment yesterday on the allegations of impropriety concerning his involvement with the contract.
However, Metro attorneys said the transmittal of any such inside information to Control Data by a Metro employe "constitutes a conflict of interest, at a minimum."
Metro attorneys found the information about Sheldon in Control Data's office files as a result of ongoing complex litigation over the award of the contract involving Control Data, Metro and Cubic Western, the firm that won the contract away from Control Data in 1974.
Previous information discovered in the civil suits has led to a federal grand jury investigation that is reportedly focusing on another Metro employe, Edwar Jasnow. Jasnow reportedly has said he recieved $38,00 in payments from a Washington consulting firm hired by Cubic Western, but said the money had nothing to do with the Farecard award.
The information disclosed yesterday shows that Jasnow also received unspecified "gratuities" from Control Data, apparently at another stage of the contracting process. The third person identified as having received a "gratuity" from Control Data is Norman Diamond, a former Metro employe. Previous court documents said he received a microwave open.
In addition, Metro attorneys said Control Data "tendered and furnished gratuities to persons whose identities are presently unknown to Metro, some of whom are reasonably believed to have been in the employ of the United States or of Metro, and destroyed records of these transactions to conceal the details thereof."
The Metro attorneys also accused Control Data of in effect forcing the Washington Metropolitan Area Transit Authority to repay the alleged payoffs by inflating its bills for work on the contract to cover the gifts.
At the time when Control Data and Cubic Western were competing for one part of the contract, "CDC improperly obtained advice, assistance and documents from WMATA's then project manager, Ralph Sheldon, including documents which disclosed Cubic's unit pricing information," Metro attorneys added.
In the documents in U.S. District Court here to Metro attorney Leonard Petkoff, the agency details several of its allegedly confidential documents it said it found in Control Data's files and said it appeared most of them came from Sheldon.
"Mr. Sheldon delivered [one such] document to Control Data official Wes Mader at Mr. Sheldon's home in response to Mr. Mader's repeated requests to Mr. Sheldon for assistance in the preparation of their proposals to WMATA for the full system [farecard] contract," the court records said. t
The grand jury here that is hearing allegations of criminal conduct in connection with the award of the Farecard contract reopened its investigation last month after Assistant U.S. Attorney Jeffrey T. Demerath of the fraud division said "new information" had come to the prosecutor's attention.
Demerath said he would have no comment on the information made public yesterday in the civil suit.
Control Data was chosen to design and, in the firm's expections, to produce the fare collection equipment. The next 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. Cubic got the contract instead for about $43 million. Control Data contends in its lawsuit that Cubic was able to win the pact because of inside information it received 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 rush-hour stress, and vending machines sometimes refuse to accept money or make change.