A Baltimore Circuit Court judge has ruled that $700,000 raised to put on an annual arts festival in the city, but withheld from the city for 3 1/2 years, should be returned to city government.
Judge Mabel Houze Hubbard ruled yesterday that the Maryland Community Foundation, a private, non-profit organization directed by two of Gov. William Donald Schaefer's top officials, must turn over the money. The decision comes after two years of legal wrangling between the administration of Mayor Kurt L. Schmoke and the organization's directors.
The money, about half of which city officials say is government funds, has been kept in private bank accounts controlled by Jody Albright, who created Artscape under the administration of former Mayor Schaefer, and Mark L. Wasserman, Schaefer's executive chief for administration. Both are officers of Maryland Community Foundation.
"Even though it took such a long time for the court to render a decision, everyone should be relieved and gratified the court has upheld the position of the city and that the funds will be available to support artistic and cultural events sponsored by Artscape," City Solicitor Neal Janey said today.
Clint Coleman, Schmoke's press secretary, said, "The mayor is pleased with this development and certainly hopes that this ends the controversy and that all the parties involved can now work together to support the arts in Baltimore."
The annual festival, scheduled for next weekend along Mt. Royal Avenue near the Lyric Opera House, costs about $350,000 a year to operate. While the city waited for the judge's decision, Claire Z. List, Schmoke's director of art and culture, has continued to run the arts festival with a combination of city government funds and private money raised from businesses and individuals.
The Artscape money withheld from the Schmoke Administration was raised by Baltimore Arts Festival Inc. while Schaefer was mayor. After he was elected governor in 1986, control of the Artscape funds was transferred to the foundation.
When Schmoke took office in 1987, he and his aides attempted to get the money back for city use. While refusing to turn over all accounts, the group gave the city two "grants" totaling $120,000 for the city to use during the last three festivals.
Schmoke has said the dispute reflected the acrimonious relationship that has existed between the governor and mayor.
In motions filed in the case, the foundation's attorney argued that Artscape was run by a private organization, rather than the city government and therefore the current city administration was not entitled to control the funds.
In her ruling, Hubbard noted that Albright raised the money in her position as a city official and used city government stationery, staff and services to raise the funds and run the annual July festival. The judge also noted that city press releases proclaimed Artscape to be a "project of Mayor William Donald Schaefer's Advisory Committee on Art and Culture headed by Mrs. Jody Albright."
Therefore, Hubbard ruled, the Baltimore Arts Festival Inc., which held the money in private bank accounts, was in fact a city agency and that all money collected by it on behalf of Artscape was subject to city control.
The judge ruled all money that was later transferred to the Maryland Community Foundation, plus interest, should immediately be returned to the city. Additionally, the foundation owes city officials a full accounting of what it did with the money, such as possible investments or transfers of funds.
Hubbard also ruled that the foundation should pay all legal expenses incurred by the city during the litigation. She noted that court costs can not be taken out of the Artscape funds.
The foundation has 30 days in which to appeal the decision.
Wasserman, Albright and William A. McDaniel, lawyer for Albright and other former Artscape officials, did not return a reporter's call this morning.