Huddles aide says he thought loan was OK * Treasurer says he told Huddles to pay back $50,000 campaign fund loan with interest. By: Meredith Schlow

November 26, 1991|By Evening Sun Staff

Gary Huddles' former campaign treasurer has testified that he believed the then-Baltimore County councilman was acting within the law when he withdrew money from his campaign fund in 1987 for his personal use.

"He told me he got a legal opinion, and I said 'OK, please, when you pay it back, pay

it back with interest,' " said Herbert Kasoff, 52, who testified for the state yesterday during the first day of the Huddles trial in county Circuit Court.

Huddles, a 16-year councilman who formerly represented the 2nd District covering Pikesville and Randallstown, is charged with theft and misappropriation by a fiduciary stemming from his withdrawal of over $50,000 of his leftover campaign funds in 1987 to cover personal losses he suffered in the stock market.

He paid back the money with interest in 1989 and 1990, and distributed the campaign fund to charity or returned contributions to supporters. Huddles claims that borrowing the money was not prohibited under Maryland election laws.

The two charges carry maximum penalties of 20 and five years, respectively.

Under questioning from Scott E. Nevin, a senior assistant state prosecutor, Kasoff said that he never asked Huddles how much money he planned to withdraw from the $90,000 account, or how long he planned to take to repay it.

"It didn't occur to me," said Kasoff, who testified that he is a close friend of Huddles. "I saw no reason why Mr. Huddles would tell me he was going to do something and not do it . . . call it trust."

Nevin, in his opening statement, told Judge Barbara Kerr Howe that Huddles had been quite aware of the restrictions placed upon campaign funds that prohibit a candidate from using them for any purpose other than those related to the campaign.

"He knew what he could do with surplus funds . . . he exerted unauthorized control over this money," Nevin said.

Nevin pointed to equity in Huddles' stock holdings, which fell from over $100,000 to "a couple hundred" dollars four days after the stock market fell 508 points on Black Monday, Oct. 19, 1987.

Huddles even borrowed $45,000 from a friend before withdrawing money from the campaign fund, Nevin said. Following the withdrawals, Huddles did not file campaign fund reports in 1988, 1989 and 1990 until August 1990, Nevin said.

But Huddles' attorney, Robert B. Schulman, said that failing to file campaign fund reports was something that Huddles did routinely.

"He consistently filed late, time and time again. . . . There's nothing unusual about that," Schulman said.

Schulman said that Huddles never made any attempt to hide the fact that he was withdrawing money from the fund, and that it was always intended to be a loan.

"A loan repaid with interest," Schulman said. "The bottom line is always the same. That Mr. Huddles, from October to December, borrowed money . . . believing there was nothing wrong with it, from his own campaign."

Huddles raised $115,575 in 1986 with an eye toward running for county executive. But his plans were abandoned after a $60,000 unsecured loan, personally arranged for him by Jeffrey A. Levitt -- then president of Old Court Savings and Loan -- became public just weeks after Huddles' fund-raiser.

Huddles, who had not repaid any of the loan in three years, quickly repaid all of it, including $24,000 in interest. Levitt is now serving 30 years for stealing millions from depositors of the now-defunct Old Court.

Since Huddles' money was not raised by a "continuing committee," he could not save it to use in a future campaign. Under Maryland law, it could be refunded to donors, given to charity, or donated to the Democratic Party or to another candidate.

0$ The trial was to continue today.

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