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Best of 2013: Following the money

The Brew’s investigative reporting concentrated on Harbor Point and a proposed water utility contract

Above: To get a seat at the power table, you better scatter around the green stuff.

Our investigative credo is premised on the Elvis principle that if you want to find out what’s going on in Baltimore’s power circles, you need to follow the long green trail. Or as Presley sang: “Money, honey, if you want to get along with me.”

That certainly applied to two high-stakes poker games in 2013 – tax breaks for Harbor Point and a “smart” water meter contract covering 400,000 customers in the city and county.

Last March, we broke the story that the Baltimore Development Corp. (BDC) had privately recommended to the mayor a breathtaking $107 million in financing breaks for Michael Beatty’s waterfront project.

Harbor Point developer Michael Beatty with mayor and other city officials backing his tax finance break. (Photo by Mark Reutter)

Michael Beatty describes to the media his plans for a $1 billion waterfront complex as Mayor Rawlings-Blake looks on. (Photo by Mark Reutter)

From that point, we never looked back, reporting among other things:

• How the project also secured brownfield and Enterprise Zone tax breaks as well as a tacit promise by the city to apply future federal highway funds for road and bridge building.

• How Perkins public housing residents were crushed by the Beatty-City Hall steamroller.

• How Beatty won state and EPA approval to build the Exelon Tower over a capped toxic waste dump.

• How the head of the City Council’s Taxation Committee, Carl Stokes, was shot down by the gunslingers at KO Public Affairs and Gallagher, Evelius & Jones.

Our Harbor Point stories can be found here.

Probing a “Done Deal”

That other story involved a water utility contract pursued by another team of insiders skippered by J.P. Grant.

The Columbia-based financier not only had funneled tens of thousands of dollars to the mayor during her 2011 campaign, but agreed to take over the troubled Grand Prix race after two other promoters failed to make a go of it.

Grant reportedly went underwater, as race revenues sank, before he demanded to be released from the contract (under the guise of a scheduling conflict between the race and a college football game at M&T Stadium).

Coming to his potential rescue, however, was another contract involving the installation of new water meters. Grant’s lease finance company joined forces with Dynis, a Columbia-based cell tower repairer, to bid $185 million to install the water meters – fully $100 million above its competitor, Itron, Inc.

Our detailed reporting changed the course of the game. After being tagged a “done deal,” Dynis slipped behind, and other media outlets picked up on the information we had exposed.

After weeks of adverse publicity, the purchasing department recommended, and the mayor approved, the lower bid by Itron, saving Baltimore area ratepayers a cool $100 million.

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Here’s a sampling of the stories we published in 2013:

Politically-wired firm wants $100 million more for city contract than competitor

Grant is proposing to finance the water meter project at a 3.85% interest rate, according to the bid documents, or one full percentage point above the master lease financing proposed by Itron. If the Dynis bid and Grant’s financing are approved by the Board of Estimates, ratepayers are likely to face a total bill of about $240-$250 million. By comparison, the Itron bid says the total cost of its financing proposal would be $97.5 million.

Mayor Rawlings-Blake with J.P. Grant in 2012, shortly after he agreed to organize the Grand Prix race. (Photo by Mark Reutter)

Rawlings-Blake with J.P. Grant in 2012, shortly after he agreed to organize the Grand Prix race. (Photo by Mark Reutter)

Team that got $107 million for Harbor Point is now pushing Dynis water meter bid

The Gallagher Evelius law firm is a veteran player in local and state politics; its managing partner, Richard O. Berndt, was described by the mayor’s father, the late Del. Howard P. “Pete” Rawlings, as “the political pope of Baltimore.” The firm was a heavy giver to Rawlings-Blake’s 2011 mayoral campaign.

KO describes itself as a strategic communications firm that helps it clients “win where business, government, politics and media meet.” Stripped of the fancy lingo, the group is a “boutique” behind-the-scenes player that uses its ties to Gov. O’Malley (co-founder Steve Kearney’s ex-boss) and Baltimore’s mayor to lobby politicians and government officials.

The Dynis and J.P. Grant money trail goes back to the mayor’s 2011 campaign

In the space of 24 hours, her campaign raked in $43,000 from a seemingly motley assortment of individuals and companies during a fundraising event at The Hippodrome Theatre. The donations included checks from a water supply company in Pennsylvania, a cell tower repairer in Maryland, a plumbing firm in Baltimore, and a water consultant in Dickeyville.

In that very same period, seven more checks were received by the “Stephanie Rawlings-Blake for Baltimore” account, according to Maryland election board records. These funds came from Columbia financier and future Baltimore Grand Prix organizer James Preston (J.P.) Grant.

City pledged to clear Labor Day weekends for Grand Prix races

Last Friday, the mayor and other officials cited the inability to find dates as the reason for the Grand Prix’s suspension. According to the city and Race On, an Ohio State-Navy game at M&T Bank Stadium would conflict with the race in 2014 and an American Legion convention would interfere in 2015. “The calendar conspired against us,” J.P. Grant told reporters.

Both events, however, have long been known to the city officials. M&T Stadium, in fact, announced in February 2010 it would host the Ohio State-Navy game – four months before Mayor Rawlings-Blake said the city would sponsor an 180-mile-per-hour race on downtown streets.

City reserves $7 million to repay mismanaged federal homeless grant

Over the last year, the city and HUD’s Baltimore Field Office have been reviewing the city’s documentation of its expenditures and sparring over possible repayment requirements. The Rawlings-Blake administration has concluded that it may have to reimburse up to $7 million of the $9.5 million grant. The bulk of the original grant was administered by the United Way of Maryland under a contract approved by the Board of Estimates – whose terms were faulted as lacking proper oversight by the Inspector General.

After intense lobbying, Council committee passes neutered “Ticketmaster” bill

 [Marceline White of the Maryland Consumer Rights Coalition] said the Council “supported corporations as opposed to city residents” in passing a measure that allows some venues to continue to charge as much as 40% of the ticket price in service fees. She also said she was concerned about the legislative process.

We’ve been asking for these amendments and were not allowed to see them until this morning,” White said, adding that she was shut out of the working group meeting with legislators and staff about the bill over the past month.

City hires strategic consulting firm that recycled its own ideas

Its $167,500 contract was not handled through the city’s normal bidding process and approved by the Board of Estimates because the BDC is a 501(c)(3) non-profit established to provide economic development services to the City of Baltimore.

As a result, the BDC can hire consultants through its yearly appropriation of city funds and does not have to adhere to bidding requirements – or open its records to the public or media, according to BDC staff.

The agency declined to let The Brew review the proposal submitted by AngelouEconomics, saying the material contains “proprietary information” and the BDC had signed a confidentiality agreement with the consultant.

New speed cameras will cost more, not less, from city’s preferred vendor

The original bid sheets, which The Brew requested and reviewed, show that Brekford charges $55,000 per speed camera, compared to $46,500 by Xerox and $60,000 by Redflex. The Brekford figure, signed by the company’s CEO Chandra (C.D.) Breckin, makes its cameras 18.3% higher than the Xerox cameras and 9% lower than the Redflex equipment.

Brekford also charges $2,500 for installing a concrete pad for each portable camera. Xerox said it would charge no fee for the pads, and Redflex would charge $1,500.

During the board meeting, [Purchasing Chief Timothy] Krus said he did not have the specified bid prices at hand, but cited Brekford’s low price at least four times. Assistant City Solicitor Erin Sher Smyth, standing beside him, nodded her head in agreement.

We have asked Krus to comment on The Brew’s findings by email and phone. We will publish his response when we get it.*

*Krus never responded.

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