Delivering cash to a candidate while staying within the letter of the law takes finesse.
Photo by: mmodesigner.com
Psst: want to get around Maryland’s campaign finance laws? Then play it like the pros.
State law forbids individuals, companies, unions and political clubs from donating more than $4,000 to a candidate for local office. But in this year’s Baltimore mayoral race, some developers, government vendors and lawyers have blown past the donation limit with ease.
They’ve done it by spreading out their donations via wives, sisters, husbands, in-laws and other family members. More often than not, they gave through multiple companies. Limited liability partnerships are a favorite vehicle because – unlike contributions through corporations, unions or political clubs – donors using LLPs do not have to disclose their identity.
This was the route taken by downtown entertainment mogul David S. Cordish, owner of Power Plant Live and leaser of Hard Rock Café and, soon, Phillips Seafood restaurant. Last week, The Brew described how Cordish used a tangle of LLPs – none identified with his downtown properties – to pump $21,000 to the mayor’s reelection committee. This was all legal because each Cordish-controlled entity individually gave $4,000 or less.
In 2005, state prosecutor Robert A. Rohrbaugh said that the use of multiple companies to make political donations had made state finance laws “virtually unenforceable.” He urged the General Assembly to follow a New Jersey law requiring contributions from all businesses to include the names of the individuals who signed the checks.
More Than $130,000 in Donations
But with legislators in Annapolis loath to close loopholes that public-interest group Common Cause dubs an “incumbent protection system,” the practice of multiple campaign contributions – coordinated by the same individual – has become an exact science.
Before describing how four groups bypassed the $4,000 campaign limit and showered a total of $133,600 on Rawlings-Blake, let’s repeat that none of the contributions are illegal.
That said, none of the strategies adopted by these donors would likely be pursued unless the object of their attention did not accept or condone them. Candidates always have the option of placing voluntary limits on donations – and returning checks that exceed them.
Rawlings-Blake calls reform of state election laws unnecessary because they are the product of many years of work by thoughtful legislators.
Her chief fundraiser, Colleen Martin-Lauer, and her campaign staff are equally scrupulous in monitoring contributions to make sure they are above board. “My campaign goes through the donations on a regular basis and follows the letter of the law,” she said on the Marc Steiner Show last week.
So far, her election committee has returned only one check based on The Brew’s review of election board records. It was from Ekaterina Nazarenko, whose $4,000 donation last January sparked a protest from the Baltileaks website because she is a foreign national.
Asked by Steiner if large contributions could influence her decisions, Rawlings-Blake replied, “If someone thinks that they will have favors from my administration with donations large or small, they are wrong.”
Below are four of the biggest Rawlings-Blake contributors based on campaign records filed through August 26. None are household names; in fact, mostly guard their privacy and release limited information about themselves.
NOTE: The mayor’s five challengers in this Tuesday’s (Sept. 13) Democratic primary are Frank M. Conaway, Joseph T. “Jody” Landers, Catherine E. Pugh, Otis Rolley III and Wilton Wilson.
J.P. GRANT/GRANT CAPITAL MANAGEMENT
Contributions to Rawlings-Blake: $37,500
Contributions to other mayoral candidates: $0
You may never have heard of Grant Capital Management, but the group is well known at City Hall as a provider of lease financing for various government projects. For example, it financed a $33 million, 10-year equipment lease to acquire a Motorola 800 MHZ/911 communications system for the police department and 311 call center.
Founder and CEO J.P. Grant (Grant Capital Management)
On its website, Grant Capital says it arranges finance leasing on terms that are highly favorable to municipal governments. It has won large leasing contracts with public agencies in Washington, D.C. and New Orleans.
James Preston Grant III – who grew up in west Baltimore, graduated from Harvard University and became an IBM equipment salesman before forming his own company – is a prolific giver to Rawlings-Blake, who appointed him to her economic development transition committee last year.
The financier coordinated $38,500 in donations through eight donors, including wife Judy, his sister Linda Grant, his brother-in-law James Wells, his vice president of financing Vananzo Eaton, and his sister’s leasing service, SFC LLC. The donations listed addresses from company offices in Columbia, Md., and his sister’s residence in Washington.
Grant has been generous to other elected officials in City Hall. Through his corporate arm, Grant Capital, the financier gave $4,000 to City Council President Bernard C. “Jack” Young and $9,000 for the prior reelection campaigns of City Comptroller Joan Pratt.
He also contributed $25,000 to former Mayor Sheila Dixon’s 2007 inauguration gala and $16,000 for Gov. Martin O’Malley’s reelection campaign last year.
Both Grant and vice president Eaton did not respond to questions e-mailed by The Brew.
MICHAEL KLEIN/ METROPOLITAN MANAGEMENT CO.
Contributions to Rawlings-Blake: $26,000
Contributions to other mayoral candidates: $0
The Klein family of Owings Mills bills itself as the biggest “convenience-oriented” shopping center owner in the Baltimore area. Among their properties: Northwest Plaza at Wabash Ave. and Northern Pkwy., Hilltop Shopping Center on Reisterstown Rd. and Midtown Marketplace at Howard and 20th streets.
Michael Klein (right) with son Michael and father Philip Klein. (Metropolitan Management)
They are also minority partners with JBG Companies to design and construct the new 538,000-square-foot Social Security Administration building on Wabash Ave. near the Reisterstown Plaza Metro stop. The project represents the largest single office lease ever executed in the history of Baltimore city, according to a release from the mayor, who has hailed the project.
Like many property managers, the Klein family sets up LLPs to operate their real estate projects. President Michael Klein spread $26,000 across a collection of partnerships with names like 40 GEIPE and KD Associates. Klein did not make any contributions in his own name.
“I’m a proponent for good government,” the developer said, in an interview yesterday. “She [Rawlings-Blake] has shown exemplary skill in the last 19 months. I’d like to see what she can do in the next four years.
Describing his political affiliations, Klein said, “I consider myself an activist Democrat, as well as an important figure in the regional real estate market, holding a million square feet of property.”
Asked if his contributions might help smooth the way with construction of the SSA building, scheduled to start this year, Klein said, “That’s not a route you want to go down. It’s a very stupid question to ask.”
DAVID COOPER/THE WODA GROUP
Contributions to Rawlings-Blake: $24,500
Contributions to other mayoral candidates: $500 to Catherine Pugh
As a leading builder of “affordable” – that is, publicly subsidized, low-income housing – The Woda Group (TWG) of Westerville, Ohio, has moved aggressively into Baltimore.
Last year, it won a contract to build a residential complex on the 2600 block of Pennsylvania Ave., which was recently completed, and is hatching plans for additional housing projects on the Pennsylvania Ave. site, as well as in east and west Baltimore.
David Cooper, the company’s principal, used his business partners and wives to spread out the company’s donations and scoot past the $4,000 donation limit. On a single day, $4,000 checks were written from Cooper, his wife Cheryl, his partner Jeffrey Woda, Lynette Woda, and senior Woda vice president Thomas S. Simmons. All the checks used the parties’ residential addresses in Ohio rather than Woda’s corporate address.
David Cooper (right) at groundbreaking ceremonies on Pennsylvania Ave. with Mayor Rawlings-Blake (second left) and others last year. (The Woda Group)
A $2,000 check from an Ohio building supplier and a $2,000 check from a New Orleans resident appear to be Woda-linked, but the connection could not be not verified. They were not counted in our finally tally of $26,000 from TWG.
State Senator Catherine E. Pugh, in whose legislative district the Pennsylvania Ave. project is being built, received a $500 check from Cooper.
Other elected officials have been recipients of Woda largesse, delivered through the company’s name or in the names of David Cooper and Jeffrey Woda.
They include Gov. O’Malley ($5,000), City Council President Young ($4,750 since 2009), Lt. Gov. Anthony Brown ($4,000), City Councilman Carl Stokes ($1,000), state Delegate Talmadge Branch ($500), and City Council members Mary Pat Clarke, Belinda Conaway, Jim Kraft and Sharon Green Middleton ($250 each).
Woda’s public relations director, Greg Mustric, did not respond to a Brew e-mail seeking more details about the contributions.
LAWYERS AT GALLAGHER, EVELIUS & JONES
Contributions to Mayor Rawlings-Blake: $45,600
Contributions to other mayoral candidates: $0
This downtown law firm has played the giving game to a tee. Under its own name, it signed two $2,000 checks to the Rawlings-Blake campaign, thereby reaching the $4,000 finance law limit.
But look at the individual contributions made by firm members and fully $41,600 more went to Rawlings-Blake from 26 of firm’s 44 lawyers.
Most of the contributions were made last January, suggesting a coordinated effort by Rawlings-Blake’s fundraising guru Colleen Martin-Lauer. Richard O. “Rick” Berndt, a Gallagher managing partner who served on the mayor’s transition team, also appeared instrumental in getting the legal troops to give.
Gallagher, Evelius & Jones Managing Partner Richard O. Berndt (GEJ)
While Berndt contributed only a modest sum ($500) in his name, his wife, Rita, gave $4,000 in January when so many other Gallagher associates were busy writing checks.
Among the most generous were two real estate lawyers. Thomas B. Lewis ($2,500) has been active representing “developers in structuring tax increment financings [TIFs] for new development in Baltimore City,” according to the firm’s website.
TIFs are controversial tax breaks that Rawlings-Blake has supported as mayor and City Council President. Her main primary opponents – Landers, Pugh and Rolley – have all questioned the use of TIFs, especially for financing luxury developments in the Inner Harbor and Harbor East.
Attorney Nita L. Schultz (who contributed $10,000 through family members and in her name) specializes in affordable housing. She “represents owners in the negotiation of professional service and construction contracts,” with special emphasis on projects involving federal and state housing funds, according to the website. She also sits on the board of the Women’s Housing Coalition, which serves women recovering from addictions.
Berndt and Schultz did not respond to our requests for comment. Lewis e-mailed back this:
“I have worked in Baltimore city for 30 years and lived in the city prior to moving to Annapolis in 2005. The mayor worked as an intern in our office when she was in high school, so I have known her a long time.
“She is smart, grounded, positive and professional. I have a lot of respect for her and her work. She represents and serves the city well. I am glad she is willing to continue in office during a really difficult time for local government.”
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OTHER RECENT BREW ARTICLES ON THE MAYORAL RACE and MONEY:
“City set to approve cost overruns for water and downtown street projects”
“Tax breaks for developers – economic development or corporate welfare?”
“Inside City Hall: Spending before the Board of Estimates”
“Grand Prix boosters race ahead with campaign contributions”
“Rawlings-Blake should return $16,000 from Cordish, two opponents say”
“Cordish contributions to Rawlings-Blake reach $21,000″
“Pugh and Rolley pick up donations, but lag behind Rawlings-Blake juggernaut”
