Sunday, January 20, 2008; Posted: 10:27 PM
Larry Olson, former head of the state Department of Information Resources, worked the second half of last year for Houston-based TPI, a leading adviser on corporate and governmental outsourcing. Earlier, his state agency paid TPI $4.5 million to help it re-bid a much-expanded state outsourcing of computer services.
Another top official at the department, Kim Weatherford, retired last July to work as a contractor for Stellargy Consulting LLC. Its main owner, Gary C. Young of Dripping Springs, co-owns with his wife, Charlyne, a separate firm, Stellargy Services LLC. Stellargy is a subcontractor for IBM on the state's $863 million, seven-year outsourcing deal.
Neither Mr. Olson nor Mr. Weatherford appears to have violated any state ethics laws.
Both say a "revolving door" law's prohibitions don't apply to them because they haven't lobbied the department or worked for their private employers on matters connected with the outsourcing contract. TPI's top executive, Ed Glotzbach, and Mr. Young, respectively, confirmed Mr. Olson and Mr. Weatherford's accounts.
Government watchdog groups, though, say the two men's actions raise concerns.
"As this situation points out, that law is too weak to protect the public from potential conflicts of interest," said Craig McDonald of Texans for Public Justice. "Citizens can't have confidence in government agencies if they don't know whether the government is working for them -- the citizens -- or their next employer."
Leaders of Common Cause Texas and Public Citizen of Texas said the two former officials' career moves underscore a need to tighten the law to bar decision-makers at agencies from working for state contractors or regulated industries for at least two years after leaving office.
The outsourcing deal with IBM, struck in November 2006, has attracted little public attention because even though more than 500 state employees lost their jobs, about 40 percent found other state positions and the rest were guaranteed spots with IBM or its subcontractors Unisys, Xerox and Pitney Bowes.
While state employee groups have protested other privatization pushes, such as call centers for social program signups, the groups have been largely silent about "data center consolidation," as the deal is known.
A 2005 law increased pressure on state agencies to use the information resources department's data center as a backup for their databases and a bulk purchaser of hardware and technology services.
Defense contractor Northrop Grumman Corp. operated the center in Austin and San Angelo between 1996 and Aug. 31, when IBM took over. Under the expanded contract, IBM's team also provides high-volume printing and mail services.
The department has said the contract should save taxpayers $159 million over the next seven years.
Mr. Olson and Mr. Weatherford, who predict the deal will be beneficial, said they acted ethically in taking private sector jobs. Both said they checked with lawyers before leaving the state payroll to clarify what kind of work they could perform -- and for whom.
"I have always conducted myself properly in all my dealings with the state -- before, during and after my public service," Mr. Olson, 55, who ran a similar outsourcing program for Pennsylvania in the 1990s, wrote in an e-mail.
He said he attended final presentations by bidders, including TPI, who wanted to help the department design and carry out the plan to expand and re-bid the data center contract. "But I had no involvement in the scoring or selection decisions," he wrote.
Mr. Olson said he didn't start talking with TPI about going to work there until a few weeks after he left his state job in December 2006. He and Mr. Glotzbach said TPI executives acceded to his request not to work for the company on any "Texas public sector projects." Mr. Olson resigned from TPI this month.
Mr. Weatherford, 54, managed the data center contract for two years as the department's head of statewide technology operations. He had been an information technology worker and executive for state human services agencies for about 28 years.
Mr. Weatherford said his operations unit at the department drafted a request for offers when the data center contract was re-bid. He said he helped negotiate with the two eventual bidders, IBM and Northrop Grumman.
Mr. Weatherford said, though, that he didn't use his clout for a post-retirement gig.
Mr. Young, a past acquaintance from the computer world, didn't approach him about joining his new consulting business until several months after the department chose IBM, Mr. Weatherford said.
Mr. Young acknowledged he will benefit from his wife's subcontracting work for IBM. They co-own Stellargy Services, which as a female-headed business is receiving about 2 percent of total payments under the contract -- under IBM's pledge to funnel 20 percent to minority-owned companies.
However, Mr. Young said he didn't offer consulting work to Mr. Weatherford as a reward for the state's selection of IBM.
"We would never cross that line," Mr. Young said.
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