Coke vs. Pepsi Battle in IL Government Under Auditor’s Review

Illinois' version of a cola war ended when the state gave one company an exclusive contract at all state government buildings, including most University of Illinois facilities. But an audit finds problems with how Illinois chose Pepsi over Coke.

State representatives suspicious of the 2007 deal directed the state's Auditor General to investigate. His findings show those lawmakers had good reason to question the contract. Both Pepsi and Coca Cola submitted proposals to the state. A team was assembled to score each company following strict rules. Instead, some scores were lowered for no reason. And when Coke failed to meet a points threshold, the Blagojevich Administration kept it hidden for months. It wasn't until after Pepsi won the contract that Coke was notified there had been a problem.

Auditor General Bill Holland said the whole process, from the submission of proposals to the evaluation to the notification, was weak overall.

Holland says it's a process that should have been transparent. A spokeswoman for the Department of Revenue which oversaw the process says it was fair and a success ... as Pepsi will pay 64 million dollars over ten years for the exclusive right. At least one lawmaker says the state should seek new bids.

Coca-Cola has not returned calls for comment. But in newspaper reports from last March, when the Illinois House unanimously voted for the investigation, a Coke spokesman is quoted as saying "Illinois taxpayers were shortchanged.