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Associated Press
Jan 19, 2005 - 01:00 AM

by TOM CHORNEAU, Associated Press Writer

Firm hires governor's fund-raiser to pitch program to agencies

SACRAMENTO (AP) -- A communications firm with close ties to Gov. Arnold Schwarzenegger is helping a state contractor persuade department heads to join a struggling procurement program, an official with the contractor said Wednesday.

The contractor, Virginia-based CGI-AMS, recently hired Wilson-Miller Communications, which is co-owned by Marty Wilson, a top political adviser to Schwarzenegger and his main fund-raiser. Last May, the Schwarzenegger administration hired CGI-AMS to help the state trim its $4.9 billion purchasing bill.

A spokeswoman for CGI-AMS said her company hired Beth Miller, Wilson's partner, to develop a marketing and education program aimed at getting more state officials to join the "strategic sourcing" program -- a new initiative that uses the state's buying power to cut vendor prices.

But so far the program has fallen well short of expectations -- saving less than 10 percent of the $96 million goal Schwarzenegger set for this fiscal year.

Miller's role is to design only a communications program, not to lobby, said Diane Roman Fusco, spokeswoman for CGI-AMS. Still, Roman Fusco said the education program is being developed and could involve Miller making face-to-face contact with state officials.

"My understanding is that Beth had worked in state agencies before and has a lot of experience and understanding of how these people work and busy they are," said Roman Fusco. "She demonstrated strong skills and delivered some good ideas on how we could reach those people effectively."

Miller, who once worked for Republican former Secretary of State Bill Jones, did not return calls Tuesday or Wednesday. Wilson also did not return calls both days.

Terms of the agreement were not disclosed.

The procurement program, called strategic sourcing because it requires comprehensive planning before an organization spends money, is one of the first initiatives Schwarzenegger chose to undertake as part of his effort to make state government more efficient.

Although administration officials still have high hopes for the program, to date CGI-AMS has completed just one moneysaving deal -- a renegotiating of an office supply contract that will net about $9 million through July 2006.

The administration has adjusted downward to $46 million what they still expect the purchasing program to save before the end of this fiscal year. The program was a key recommendation from Schwarzenegger's landmark plan to remake state government, called the California Performance Review.

Analysts at the Performance Review estimated that as much as $30 billion could be saved over a five-year period if idea such as strategic sourcing were adopted.

The three-year contract calls for the company to help state employees negotiate purchasing deals and will receive on a sliding scale a share of the savings. Thus, the more agencies and departments participating, the more the company will earn.

Because much of what the state spends is not directly controlled by the administration -- including the nearly $50 billion that goes to schools -- success of the purchasing program's depends on getting voluntary participation.

Roman Fusco, however, said the hiring of Miller should not be read as a sign the company is worried state officials are resisting the program.

"We are just trying to provide as good a program as we can," she said.

Some critics, however, view CGI-AMS' hiring of Wilson-Miller as a means to put pressure on state purchasing agents.

"This is the worst kind of influence peddling," said Jamie Court, president of the Foundation for Taxpayer and Consumer Rights, a Santa Monica-based consumer group. "This type of cash register politics is the very thing that Schwarzenegger ran Gray Davis out of office for."

CGI-AMS, which has no other procurement contracts like the one with California, donated $25,000 in March to Schwarzenegger's California Recovery Team -- a campaign committee that Wilson helps oversee.

Although the governor's office did not immediately provide comment, the governor has repeatedly said that he makes no decision based on campaign contributions or special-interest influence.
--------------------------------------------------------------------------------
On the Net:
http://www.cgi.com/web/en/home.htm

CGI-AMS Home page:
http://www.governor.ca.gov/state/govsite/gov_homepage.jsp

Governor's home page:
http://sfgate.com/cgi-bin/article.cgi?file=/news/archive/2005/01/19/financial1747EST0111.DTL




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