CUMBERLAND -- The state prosecutor's office is examining records of the Rocky Gap Foundation -- operator of the Rocky Gap Music Festival -- and a Western Maryland senator says the foundation could not account for thousands of dollars in state funds it received.
Delegate Casper R. Taylor Jr., D-Allegany-Washington, the foundation's president, confirmed the probe, calling it a "preliminary review" of foundation records to determine whether the state prosecutor should pursue a full investigation into Rocky Gap Foundation activities.
James Cabezas, chief investigator with the prosecutor's office, would not comment on the probe, even to confirm or deny it.
One of the financial transactions questioned is $50,200 the state Department of Employment and Economic Development gave the foundation in 1989, the first year of the music festival. State officials bypassed the usual grant application process, channeling the money through a Bethesda public relations firm.
State Sen. John J. Hafer, R-Allegany-Garrett, said state auditors "could find no accounting trail" for this grant, which went first to the firm of Earle Palmer Brown. The Brown firm has an $18 million state contract for promotion and advertising.
Mr. Hafer said other funds cannot be accounted for and he has asked for a legislative audit of the foundation's financial dealings. The volunteer, non-profit foundation was set up to operate the annual three-day music festival at Rocky Gap State Park, several miles east of Cumberland.
Mr. Taylor said he has called a meeting tomorrow of the Western Maryland delegation in the General Assembly to discuss the accusations. Senator Hafer has been invited to that meeting, scheduled for 3 p.m. in Annapolis, Mr. Taylor said.
In the three years of the music festival, the foundation has received nearly $200,000 in state loans and grants. The festival lost money its first two years -- a little more than $10,000 each year -- but made a profit of $150,000 this year. However, $60,000 of that sum went toward paying back a DEED loan, foundation officials said.
Mr. Hafer has also claimed that state grants may have been "commingled" with election campaign funds spent by a Cumberland public relations firm which handled the campaigns of Mr. Taylor and other candidates.
"This is an issue of accountability, pure and simple," said Mr. Hafer, who won election to the Senate last year over Democrat Daniel F. McMullen. Mr. McMullen is executive director of the Rocky Gap Foundation.
Foundation relationships with state agencies became a source of controversy last year after an investigation into the organization in charge of the Maryland State Games pointed to numerous instances of misused funds. Two former state games officials have recently been charged in connection with that investigation. The games were held at Frostburg State University, also in Allegany County.
"The state games were right there in my territory and it was a beautiful thing, a great benefit to Western Maryland," Mr. Hafer said. "Look what happened to that."
Mr. Taylor was livid over the linking of the Rocky Gap Foundation to the state games scandal. "That is the most disgusting, degrading sort of politics that I have been witness to in my 17 years in politics," the delegate said. "No one can possibly know how much I resent . . . for some lamebrain to make the inference or hint of a connection to the state games."
Mr. Taylor called Mr. Hafer's efforts a "witch hunt" and politically motivated. "I resent these totally unsubstantiated allegations to the depth of my soul," he said.
"What makes this the worst political witch hunt I have ever run across is that this person has been invited in to look at our records since day one and we have answered and exposed whatever questions he has had," Mr. Taylor continued. "He has consistently refused our invitation, and that makes me conclude that all he wants to do is keep asking questions without getting any answers."
Senator Hafer acknowledged that foundation officials invited him examine the records. "I don't deny that," he said. "But I don't think I have to prove how Rocky Gap Foundation funds were used or misused. It's up to the people who receive the funds and the state agency which failed to properly monitor spending. Why do I have to look at the books? All I am asking for is a legislative audit."
One such request by him to the General Assembly's Joint Budget and Audit Committee was turned down. Senator Hafer said he has made a more detailed request and is waiting for a reply.
The $50,200 grant the foundation received in 1989 through the Earle Palmer Brown public relations firm was for a last-minute advertising blitz before the first festival.
Dane E. Taylor, the son of Delegate Taylor and the foundation's secretary-treasurer, said the state determined shortly before the first festival that it needed more publicity in the metropolitan areas.