State Ticket Pact Called ‘Dangerous’ Precedent

The chairman of the board of Ticketmaster charged Tuesday that state parks officials have set a “dangerous” and “outrageous” precedent by telling prospective bidders that it is acceptable to falsify a financial statement to get a public contract.

“What they’re telling you is lie and cheat . . . do whatever you’ve got to do to get the contract. Then fix it later,” said Fredric D. Rosen.

Rosen said in an interview that the message was implicit in a decision by Parks and Recreation Director William S. Briner to take nearly two years to rebid the department’s five-year, $15-million contract to handle state campground and Hearst Castle reservations.

Briner earlier this week upheld the finding of an administrative law judge, who ruled that the department had abused its discretion when it awarded the contract a year ago to Mistix, a firm that had no track record, was the highest bidder and had provided the department with false financial information.

But Briner said it was nonetheless in the public interest to allow Mistix to continue as contract-holder for nearly two more years. He said it would take that long to rebid the contract, and that Mistix--acquired by the publicly held G-TECH Corp. after the contract was awarded--was doing a good job.

“That means,” Rosen said, “that if a company has no financial credibility, they can now deal with the state of California, make up their balance sheet and, if they win the bid, then they can shop the contract. That to me is a highly dangerous concept, and you’ve now established a precedent for it.

“I don’t want to come across as a raving lunatic,” he added, “but this is outrageous.”

Briner noted in his decision that “all issues concerning financial capability” have “become moot” because of Mistix’s successful performance.

But Rosen said, “Mistix’s performance is irrelevant. What’s at stake is the bidding process.”

Rosen, whose firm lost in bidding for the contract along with another established computer-ticketing firm, Ticketron, said Ticketmaster would be willing to operate the system for the two years it takes parks officials to rebid the contract and donate any profits to the parks department.

Told of Rosen’s comments, Briner said: “I would also like to know if he would pay for any losses. I am told that Mistix is still losing money.”

Briner acknowledged that “much of the (financial) information submitted by Mistix was false.” But he said that he knew at the time he awarded the contract that Mistix “had the financial backing of G-TECH. . . . So I knew they could do what they said they were doing.”

Not Seen as a Gift

“It’s not unusual for a bidder to have the idea on how he’s going to complete a bid and not have everything in place at the time they complete their bid,” Briner added.

The parks director also said he did not view the nearly two-year continuation with Mistix as a “gift. . . . If Mistix is losing money as I’m told they are, it’s not much of a gift.”

A spokesman for William J. Schmitt, president of Ticketron, said only that he was “disappointed” with the department’s decision. The Ticketron spokesman and Rosen both said that their firms could take over the ticketing system within a month. But Briner said he did not believe it.

An attorney representing Mistix, Charity Kenyon, said her client has not decided whether to challenge Briner’s decision on the grounds that the parks department has no legal right to rebid the contract in two years, when only three years of the five-year contract will have elapsed.