Cox's Wife Lent Money To Rubble Fill Company President

January 06, 1991|By Carol L. Bowers | Carol L. Bowers,Staff writer

The wife of outgoing state Delegate William H. Cox Jr. lent an undisclosed sum of money to Richard D. Schafer, the president of the company seeking permits to start an asbestos rubble fill near Havre de Grace, a recent deposition given by the state delegate shows.

Cox, a District 34 Democrat, said in the deposition that while

he signed a bank agreement to be a guarantor of an $800,000 loan forthe company, Maryland Reclamation Associates Inc., he decided not tobe a shareholder. That decision meant that he would be one of the parties responsible for repaying the loan if the company defaulted, buthe would not share in company profits.

Cox said he "closed the door" on being a shareholder in the company in October 1989, about fourmonths before signing the guarantor note.

But Cox said in the deposition he was uncertain whether he had signed any loan guarantees for MRA apart from a $800,000 bank loan for the rubble fill project. "Idon't believe so, but I'm not sure," he said in response to the question.

Cox said in an earlier deposition, taken in July 1990 in connection with a suit MRA filed against the county government, that he signed an agreement Feb. 9, 1990, with Bank of Maryland-Harford County to be one of four guarantors of the $800,000 loan to MRA.

Those guarantors, as disclosed in the July deposition, are Cox; E. Jean Koontz, Cox's office manager; Larry Stancill, president of the Harford Sands gravel company; and William D. Hooper, Schafer's Bel Air-based lawyer. The company used the loan to buy 55 acres on Gravel Hill Road near Webster, where it wants to operate the rubble and asbestos dump.

When asked during the deposition if he has assisted MRA with obtaining any other financing, Cox replied: "Not that I can recall. But I'm (Schafer's) broker and have been."

Cox had said earlier last year that he was the "broker of record, period" for MRA in the rubble fill deal.

Cox, who lost a November bid for re-election and will step down from his post Jan. 9, said in the deposition he did not know the amount of the loan his wife, Paige, made to Schafer and did not know whether the check for the loan was written on a joint checking account with his wife. It was not clear from the deposition when Paige Cox made the loan.

Paige Cox, reached by telephone Thursday, refused to comment on her loan to Schafer or her husband's statements in the deposition.

The delegate disclosed the information in a deposition taken on Dec. 18 for a $2.9 defamation and trespass suit Schafer filed against Sylvia Hutsell, a Webster-area resident who publicly opposed the Schafer project.

Three other Webster-area residents are also named in that suit. Kieron F. Quinn, a Baltimore lawyer representing Hutsell, took Cox's testimony. The deposition is now part of thecourt record in the suit.

Cox was not asked during the depositionwhy his wife lent money to Schafer. In response to questioning, Cox said he did not know if his wife had an understanding with Schafer that she would become a shareholder in Schafer's company.

In the deposition, Cox said he and Schafer discussed the possibility of Cox lending Schafer money. Cox said that while he had "loaned it to him in the past" he decided not to loan Schafer money at that time. The delegate said he could not recall the time or location of the discussion.

It was unclear from the questions and answers in Cox's deposition whether Paige Cox's loan was made to Schafer as an individual or in his capacity as president of Maryland Reclamation. No questions were asked during Cox's deposition about a loan interest rate or repayment terms.

On Dec. 12, Quinn took Schafer's testimony in the same suit. In that deposition Schafer said he had received a loan from Paige Cox in October 1989 and that the loan has not been repaid.

Schafer refused to answer further questions about outstanding loans to MRA.

Quinn, a lawyer with Quinn, Ward and Kershaw, said he has filed fora court order requiring Schafer to respond to all questions he refused to answer in the Dec. 12 deposition.

Controversy over the rubble fill began in November 1989, when the County Council voted to include the project in the county Solid Waste Management Plan. The councilspent little time debating the proposal before approving it. It later reversed the decision after conducting public hearings at which citizens opposed the plan.

On May 11, four days after the council reversed its decision, Maryland Reclamation filed suit against the county and the council, asking the court to nullify the county's second decision.

A Circuit Court judge ruled last fall that the council hadacted improperly in reversing its vote on the proposed dump. That ruling cleared the way for Maryland Reclamation to seek state permits to operate the rubble fill. However, the decision is being appealed bythe council and the citizens included in the suit.

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