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Drivers' book deal flunks audit

The sole advertiser in the state manual employed a lobbyist now married to the highway agency director.

Published July 14, 2006

TALLAHASSEE - The wife of Florida's top highway safety official lobbied for a company that landed a lucrative contract from his agency. State auditors said Thursday the public should have been told about it.

The review focuses on Fred Dickinson, the executive director of the Department of Highway Safety and Motor Vehicles. His agency last year awarded a five-year contract to a private company, National Safety Commission, to distribute the Official Florida Driver's Handbook.

The handbook is distributed for free at motor vehicle offices, but the company charged $6.95 to mail it.

And the company got the exclusive right to advertise its driver safety courses in the book.

The audit is the latest in a long-running series of reviews that have called into question the way the Bush administration administers contracts.

The state did not pay the company for printing and distributing the handbook but gave the company permission to charge shipping costs and include free advertising, matters also questioned by the audit.

The company, owned by Ken Underwood of Ponte Vedra Beach, was the only bidder for the contract. His lobbyist was Dickinson's wife, Sherry, the agency's former director of legislative affairs. She also lobbied for five other firms that did business with Dickinson's agency.

She dropped those clients in May after Gov. Jeb Bush said the arrangement gave "the appearance of impropriety."

"She never lobbied the department, so I knew there was no influence on her part," said Dickinson, who answers to the governor and Cabinet and has run the agency since 1992. "We need to document when we're aware that maybe there's a conflict."

Underwood's competitors say they did not anticipate how deeply his ads in the handbook would undercut their ability to attract students who take courses in driver safety and drug and alcohol awareness. Some driving schools say they have had to lay off employees as a result.

The handbook resembles a government document. The cover features the official state seal; inside are six full pages of advertising for Underwood's Lowest Price Traffic School, the only school allowed to advertise in the book.

The Auditor General said the public should have been alerted to the "potential conflicts of interest" involved in allowing Sherry Dickinson to lobby for firms that did business with her husband's agency.

The Auditor General also said the Legislature should amend ethics laws because such arrangements could affect public confidence in awarding of government contracts.

Dickinson noted that auditors concluded there was no evidence that the relationship between the National Safety Commission and his wife "directly influenced" award of the handbook contract.

The audit said the agency "did not document in the public record its consideration and disposition of any potential conflicts of interest identified in connection with the evaluation of the vendor response."

The audit also questioned whether the agency had the authority to allow the vendor to charge a $6.95 shipping fee for each handbook, or to allow the vendor to advertise in them. Auditors recommended that the Legislature analyze the effect such advertising may have on industry competition.

Dickinson defended the contract as a good deal for taxpayers. The agency estimates a savings of $2.5-million over five years, but Underwood said the actual savings will be higher. Underwood would not say what the deal was worth to his company.

Critics of the handbook contract say the audit confirms their suspicions.

"It seems like they have been susceptible to influence, and this audit supports that," said John Pesack, vice president for operations at Driver Training Associates in Lakeland.

Kim Jowell, who runs Suncoast Safety Council in Clearwater, said of the handbook deal: "It wasn't an arm's-length arrangement. That's the bottom line. And it just shouldn't have been done."

Driving schools wish the state had followed its old system that referred drivers to the Yellow Pages. But more and more motorists use the Internet, and the motor vehicle agency's Web site contains a link to Lowest Price Traffic School -- "proud sponsor of the Florida Drivers Handbook."

Underwood said he hired Sherry Dickinson in 2003 mainly because of her political ties to then-Senate President Jim King, R-Jacksonville. At the time, the vendor wanted a bill passed to require 15- and 16-year-olds to take a basic driver improvement course, but the measure did not pass.

Underwood said that when he hired Sherry Dickinson as his lobbyist in 2003, she and Fred Dickinson were not yet married. They married three months later.

"I can't really fire someone just because she's married to the director of the department," Underwood said.

Sherry Dickinson's lobbyist expenditure report shows she was paid between $10,000 and $19,999 to lobby for the National Safety Commission in the first quarter of this year. She withdrew as the firm's lobbyist May 16.

Underwood's competitors say his exclusive advertising deal in a state-issued handbook gives him an unfair competitive advantage.

Underwood says his critics could have bid on the contract, too, but didn't. Jowell, of Clearwater, said she didn't because she could not afford the $1-million performance bond requirement.

"I don't deny that he's a great businessman," Jowell said of Underwood. "But basically the state is aiding him in controlling the market."

"Hogwash," said Underwood, who claims to use 24 different marketing devices to promote his driving school. "These people complain, but they didn't even show up for the dance."

Times staff writer Steve Bousquet can be reached at or 850 224-7263.

[Last modified July 14, 2006, 00:57:16]

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