SPRINGFIELD - Illinois' top financial watchdog alleges the state's administrative agency awarded lucrative contracts to vendors who also helped create proposal specs.

Auditor General William Holland broke more than 12 years of relative media silence Tuesday to raise concerns about the Illinois Department of Central Management Services' handling of contracts and $546,650 in questionable expenses.

"There clearly was some inappropriate activity," Holland said. "I don't know that it's sinister, but I guess I don't know that it's not."

Holland raised concerns about nine contracts totaling $69 million aimed at streamlining

state government. Five of those firms helped research criteria for contracts they ended up winning.

Holland argues there should been a paper trail detailing that potentially unfair advantage.

"In writing, let's claim responsibility for this," Holland said. "What you've got is a lot of people not putting their names to paper."

CMS officials defended the freespade work provided by these companies because the state couldn't do it fast enough.

"The state of Illinois didn't even understand what property we owned and occupied. In terms of technology we had no idea what individual agencies were doing from a technology perspective," said Brian Chapman, CMS's chief operating officer.

Chapman is a former employee of McKinsey and Company Inc., which was awarded a $14.7 million contract to review the state's procurement process. McKinsey was among the companies criticized by Holland.

A search of Illinois State Board of Elections records showed that three of those vendors or people associated with the companies donated $52,500 to Gov. Rod Blagojevich.

Donations included:

l Maximus, Inc., which was awarded a $34,993 contract for fleet management, donated $20,500 to the governor from 2002 to 2003.

l BearingPoint Inc., which was awarded work totaling more than $21 million, donated $28,000.

l Fred Fried, who helped found Team Services, LLC, which was given a $360,000 contract for strategic marketing, donated $4,000 to Blagojevich in 2001.

However, Paul Campbell, the agency's director-designee, said politics was "absolutely not" a factor in awarding the contracts.

State Rep. Jack Franks, D-Woodstock, said taxpayers should be concerned "that your taxes are being spent as they should be and not be squandered and not being given to insiders and people with clout."

Franks, the chairman of the House's State Government Committee, said he plans to hold hearings about the contracts and other possible problems within CMS.

"It looks like there was actual illegal activity here," he said.

The auditor general has turned over part of his report to the state's ethics police as well as the Attorney General's Office concerning questionable reimbursements made to several contractors, namely Illinois Property Asset Management, LLC, that won a $24.9 million state contract.

Those expenses include:

l $495.05 for a celebration dinner after the firm won a state contract.

l $278.30 to fly a guest to Chicago for the weekend.

l $13.00 for parking at a Chicago Bulls game.

l $32.01 for ice bucket and tongs.

While the agency will make sure that inappropriate expenses are repaid, Campbell said he didn't think any crime had been committed by state workers or vendors.

matt.adrian@lee.net

217-789-0865