Mayor Marion Barry will appoint a special panel to determine what kind of telephone system the District government should purchase following allegations by former cabinet member Jose Gutierrez that the administration sought to steer contracts to the Chesapeake & Potomac Telephone Co.
The panel will be called upon to chart the city's course in awarding up to $20 million in contracts to replace the city government's entire telephone network, including the 911 emergency system, and meeting other computer and telecommucations needs, according to William Johnson, the new head of the Department of Administrative Services.
Meanwhile, as the debate over the city's procurement policies continued to heat up, both Barry and his critics moved on several fronts yesterday:
* City Council members John A. Wilson (D-Ward 2) and Betty Ann Kane (D-At Large) joined council member William R. Spaulding (D-Ward 5) in calling for a council investigation of procurement polices to determine whether politics plays a major role.
* Hispanic leaders who have been angered by administration treatment of Gutierrez stepped up their criticism of Barry, calling for the U.S. Civil Rights Commission and the Justice Department to determine whether the city has systematically discriminated against Hispanics in the awarding of contracts, employment and providing social services.
* Barry told a group of about 35 Hispanic city employes called to his office that he was entitled to discipline Gutierrez, a political appointee, but that he did not intend to retaliate against other Hispanic workers and that he was concerned about the needs of the Hispanic community, according to a participant in the meeting.
Later, after a separate meeting with the Hispanic leaders who have criticized him, Barry announced that Gladys W. Mack, one of his top aides, will look into complaints of discrimination against Hispanics in city employment and contracting.
* Finally, the administration continued to tighten control over the Administrative Services Department, the city's main purchasing agency, which was formerly headed by Gutierrez. Johnson, a former public works official, made several key personnel changes, including taking away contracting authority from assistants with responsibility for telecommunications and real estate.
He also hired a new employe to assist on telecommunications matters and brought into the department Samuel S. Sharpe, a trusted Barry administration legal adviser and contract specialist.
After Monday night's demotion of Gutierrez and the firing of Thomas J. Mattingly, a telecommunications consultant hired by Gutierrez, city officials called police about 12:30 a.m. yesterday and had Mattingly arrested when he refused to leave his office at 613 G St. NW.
Mattingly, who was led from the building in handcuffs, was charged with unlawful entry and released several hours later. Mattingly had backed up Gutierrez's criticisms of the city's handling of the telephone contracts. He called his firing "illegal" and the arrest "demeaning and humiliating."
Several Hispanic leaders also complained yesterday about the stepped-up police security in the mayor's outer office during their meeting with Barry, with eight to 10 officers present at all times.
"This is not the Marion I knew," said Marcelo Fernandez-Zayas, a D.C. public schools administrator who twice headed Hispanic groups that supported Barry for election as mayor. "It's a bunker mentality."
Late yesterday, Barry said he had apologized to the Hispanic leaders who complained that mayoral aide Tina Smith had threatened them with the cutoff of city funds for their programs if they didn't end their public criticism of the administration.
The mayor said that Smith admitted to him that she had made the threat and that she had "probably gotten too emotional."
He also said that he does not intend to reverse his decision to demote Gutierrez, adding that Gutierrez had shown a "lack of respect for the family creed" by complaining to the press before talking to him. "We talk to each other about family problems," Barry said.
The controversy was triggered late last week when Gutierrez said publicly that he believed he had been transferred from his job as director of the Administrative Services Department to another cabinet-level post because he resisted pressure from City Administrator Thomas Downs to approve several controversial contracts.
On Monday, Barry demoted Gutierrez, assigning him to a much lower-level job in the city's planning department. That same day, the city canceled its two consulting contracts with Mattingly, who had supported Gutierrez's allegations.
A major part of the dispute involves C&P's efforts to win three telephone contracts with the city, including one to provide service to the new municipal office building at 14th and U streets NW. Officials hope to choose a firm for the office building contract within a week, saying a delay would set back the building's planned opening this summer.
Mattingly charged that Delano Lewis, C&P's executive vice president and a longtime political supporter of the mayor, exerted pressure after Mattingly and Gutierrez raised questions about the merits of C&P's proposals.
Gutierrez said Downs tried to get him to sign what amounted to "a blank contract" with C&P for the 911 emergency telephone system.
Administrative services director Johnson did not specify when Barry would appoint the eight to 12 members of the special panel to study the city's telecommunications needs, saying only that the appointments would be made soon.
Johnson said the panel will include economists, government officials and experts in the telecommunications field, and will study the issues for 45 to 60 days before recommending what kind of system is best for the city government.
Council member Kane, who heads a council committee that has jurisdiction over telecommunications issues, said yesterday she had been concerned for months that the city was not getting the lowest price possible for the 911 system. She alleged that the Barry administration "stonewalled" her efforts to gather information about the city's dealings with C&P.
Kane also said she disagrees with statements by Barry suggesting that the city may be obliged to provide the multimillion-dollar contracts to C&P or run the risk of the phone company seeking even higher residential phone rates that would hurt the poor and the elderly.
"The whole purpose of divestiture and competition in telecommunications is to get the best service at the cheapest price," Kane said. "You just don't suspend normal procedures like competitive bidding for some vague social purpose that's never going to filter down to poor people anyway."
Both Kane and Wilson said they felt politics played a major role in the administration's awarding of contracts. Wilson said the contracting process was political before Barry took office in 1979, but since then the role of politics has become "more sophisticated" and ingrained.
"As far as waste and inefficiency in government, contracting has to be the major area that the council should be investigating," said Wilson, who is chairman of the Finance and Revenue Committee.
Wilson also said that the city's purchasing procedures need to be centralized, although the council backed away from approving a bill that would accomplish that under heavy lobbying by the Barry administration.
Spaulding, chairman of the Government Operations Committee, said this week that he has reintroduced the legislation and pledged to conduct extensive hearings into the city's procurement practices.
A Washington Post report last year showed that the city's decentralized purchasing procedures were forcing it to pay 26 percent to 79 percent more than the surrounding suburbs and Baltimore for essential goods.
Gutierrez, who for seven years was the highest-ranking Hispanic in the D.C. government, was the first cabinet member to criticize openly the city's policies in negotiating contracts and leases.