John Paterakis didn’t discriminate when it came to contributing to political campaigns.

The Bread Man wrote checks to Democrats and Republicans and he was especially generous to candidates who shared his Greek heritage. But his political largesse is now at the center of the latest indictments in the city’s political corruption investigation.

A city grand jury yesterday indicted the bakery owner and developer on two counts of violating campaign finance laws for allegedly helping to pay for a political poll for Councilwoman Helen L. Holton. The councilwoman also was indicted in an investigation being pushed by the state prosecutor.

This is not the first time Paterakis’ name has come up in connection with campaign finance violation allegations. A January 15, 1997 Baltimore Sun story by William F. Zorzi Jr., reviewing the 1991-94 cycle, found not only apparent violations of the law by Paterakis but also that the $10,000 cap had not been enforced by two state agencies charged with doing so.

Paterakis said at the time that the contributions were not an effort to persuade office-holders to look favorably on his projects, but rather an effort to help friends.

Too Many Politicians as “Friends”

“Over the years, you establish a friendship with them. How can you turn them down?” he said in the article. “The trouble is I got too many of those people who are my friends.”

Paterakis, 80, who built his H & S Bakery from a family-run operation in the basement of his parents’ East Baltimore row house into an international corporation, is also the developer behind the Inner Harbor East revitalization.

Yesterday’s indictment alleges that he paid $6,000 to developer Ronald H. Lipscomb on behalf of Holton’s council candidacy in 2008. Lipscomb has pleaded guilty in a companion case and is cooperating with state prosecutor Robert A. Rohrbaugh.

An individual may only contribute $4,000 to a single candidate in a four-year election cycle.

Paterakis’ name popped up in connection with the City Hall corruption probe in June, when Lipscomb, charged with bribery for helping fund the Holton poll, pleaded guilty to a lesser charge. Prosecutors dropped the bribery charges and, in exchange, Lipscomb agreed to participate in Rohrbaugh’s investigation.

Under the terms of the deal, Lipscomb pleaded guilty to conspiring with Holton and Paterakis to violate campaign rules, including exceeding limits on how much can be contributed and not channeling the money through Holton’s official campaign treasury.

Pay to Play?

Paterakis has been a political patron to governors and mayors and other candidates in between. His contributions both as a fundraiser and civic giver have led to criticisms that he has benefited from tax breaks and other help from city leaders.

He was among a handful of business leaders that former mayor William Donald Schaefer would tap to get projects done that others wouldn’t want to risk. The Marriott Waterfront Hotel is one – it was built long before that part of town was transformed into a canyon of high-priced condominiums, hip restaurants and shops. The project did receive $20 million in city subsidies and tax breaks. But it led the revitalization push on that edge of the harbor.

According to the 1997 Sun story, “Nine companies owned by the Paterakis family, including H&S Bakery and Automatic Rolls of Baltimore, contributed at least $26,700 to numerous candidates for city and state office.” Under state law, the article noted, contributions by a corporation and any of its wholly owned subsidiaries – as well as other corporations owned by the same individuals – are considered as coming from a single contributor.

That means that, all together, such corporations and subsidiaries can legally give only $10,000.

Approached by The Sun, Paterakis confirmed that the stockholders in each of the nine family companies were the same.

The Paterakis companies’ $26,700 “was in addition to at least $16,050 in contributions to candidates – these permitted under the law – from other Paterakis-affiliated businesses, family members and company officials,” the article noted.

At least $1,000 from Paterakis himself shows up in records.

Later in the story, Paterakis is quoted as saying he believed that each of nine family-owned companies was able to give $10,000 because each was separate. But after learning of the language regarding corporations, he said, “It looks like we goofed up somehow.”
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Ann LoLordo was a longtime reporter and editor at The Baltimore Sun.