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Lawmaker Says He'll Seek Flex-Fuel Deal Subpoenas

September 28, 2007

SACRAMENTO – A state senator said that he will seek subpoenas to force members of Gov. Arnold Schwarzenegger's administration to testify about what he described as an alleged non-competitive purchase of state fleet vehicles from General Motors, according to the Mercury News.

Sen. Dean Florez, D-Bakersfield, for weeks has asked administration officials to appear at a legislative hearing (held Sept. 25) to answer questions about internal state documents that allegedly show the state agreed to buy vehicles from the automaker before a competitive bid was issued.

The questions focus on the state's purchase over the past two years of 1,100 "flex-fuel" GM vehicles, which are designed to run on high-grade ethanol. Allegedly, GM was the only car manufacturer that made vehicles that qualified for the contract. A policy that banned the flex-fuel vehicles from the fleet was changed right before the bid went out. Florez said he wants to know what the governor and his administration knew about the $17 million deal.

“If we don't receive the documents, we are fully prepared to go to the Senate Rules Committee to serve subpoenas,” Florez said at the hearing, adding that he is also seeking testimony from decision-makers within the Governor's Office and state contract managers that were involved with the deal, according to Mercury News.

Schwarzenegger spokesman Aaron McLear said it is rare for such information to be released because it would have a “chilling effect” on information shared with the administration by advisers. The Governor's Office has asserted that state law protects it from releasing documents and providing testimony. The Department of General Services, which buys and manages the state fleet, sent officials to the hearing, where they defended the purchases.

Florez is examining the state contract in response to a Mercury News investigation that focused on questions surrounding the bidding process for the fleet. Those concerns follow an alleged initial story that showed the alternative-fuel fleet, for two years, had been running exclusively on standard gasoline. High-grade ethanol has never been widely available in California, which is why the department banned purchase of the vehicles from 2002 until 2005.

Most recently, internal state documents obtained by the Mercury News alleged that officials with GM and the state signed a memorandum of understanding — agreeing to a limited buy of the vehicles — a month before a competitive bid was issued for the work.

The small program expanded to a large fleet buy of more than 900 of the "flex-fuel" Chevrolet Impalas and Silverado pickups. Records also show the fleet purchases came about only after the state policy that prohibited buying them was eliminated at the last minute, and the fleet contract was modified to add flex-fuel vehicles.

Administration officials said they were insulted by implications that their bidding procedures may have been compromised by the memorandum of understanding, reported the Mercury News. Will Semmes, chief deputy director of the General Services Department, said although GM was the only automaker able to secure the flex-fuel buys and made vehicles that qualified for the contract, the process was competitive because dealerships had to bid against one another for the sales.

The senator will need to submit a written request for the subpoenas, giving legal arguments for seeking information and testimony, something he has not yet done. The request will be reviewed by Secretary of the Senate Gregory Schmidt, who will make recommendations to Senate leader Don Perata, D-Oakland. Perata will decide whether the Rules Committee will consider the request.

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