Lawmakers challenge pact with Pepsi
COKE FIZZING | State to probe rival's claim it never got to make best offer
SPRINGFIELD -- A controversial contract Gov. Blagojevich's administration signed last year giving Pepsi exclusive rights to sell soft drinks on state property will be probed after lawmakers unanimously asked Illinois' top government auditor to investigate the deal.
Auditor General William Holland will look into allegations made by Pepsi's chief rival, Coca-Cola, that the contract was tainted because the administration accepted Pepsi before hearing Coke's best offer.
(Rich Hein/Sun-Times/AP)
The Illinois House voted 104-0 earlier this month to have Holland investigate the Pepsi pact, worth an estimated $130 million to the state and the soft drink company over the 10-year life of the contract.
"We have an obligation to make sure this state is getting the best deal and to make sure we're getting the most income for the residents of the state," said Rep. Jack Franks (D-Woodstock).
But the administration is defending the deal, saying it is good for taxpayers.
"We believe that we have followed all the guidelines and done everything above ground," said Katie Ridgeway, a state Revenue Department spokeswoman. "We've gone back and looked at it again. There's no fuzziness here."
Last July, the state awarded Pepsi the contract, which included four universities and 2,300 vending machines. Eight months later, Coca-Cola officials are still fizzing over what they allege was unfair treatment. They say they submitted an initial bid of about $43 million but could not provide a competitive proposal because the state did not answer certain questions about the contract before awarding the deal to Pepsi.
Pepsi's bid for the contract was about $62.8 million, Ridgeway said.
"We are very disappointed to not have the chance to provide the taxpayers our best possible proposal," said Kevin Morris, spokesman for Coca-Cola. "Illinois taxpayers were shortchanged. ... There's no doubt in my mind about that."
The state looks to receive about $3.5 million a year and the universities as much as $2.8 million a year from the deal. The rest -- about $7 million a year -- would go to Pepsi.
Rep. Susanna Mendoza (D-Chicago), who sponsored the resolution to investigate the contract, said Coke's arguments seem compelling. "It makes you ask questions," she said. "If there's nothing wrong, we will know that at the end of the audit."