McLean tried to skirt lease scrutiny

December 10, 1993|By Kim Clark and JoAnna Daemmrich | Kim Clark and JoAnna Daemmrich,Staff Writers

After top city officials revoked a million-dollar lease on a building she partly owned, Baltimore Comptroller Jacqueline F. McLean tried to rent the same property to the city in an arrangement that would have avoided public scrutiny.

Mrs. McLean's apparent attempt to sidestep the Board of Estimates is one of the issues in a grand jury investigation by Maryland's special prosecutor, say City Hall sources and others familiar with the case.

The revised lease proposal, which called for a month-to-month rental, was short-lived. It stopped after the initial request from Mrs. McLean, at a time when Maryland's special prosecutor began investigating her real estate dealings.

Yesterday, as State Prosecutor Stephen Montanarelli began presenting witnesses to a Baltimore grand jury, city officials were taken aback by her latest move.

"What? What? I think we ought to put the notion of this lease to rest once and for all," said City Council President Mary Pat Clarke, who chairs the Board of Estimates.

"In light of everything that is happening, I don't think anything would surprise me anymore," said Public Works Director George G. Balog, a board member.

The grand jury heard testimony from witnesses in the comptroller's case for the first time yesterday. The investigation is expected to last at least several more weeks.

Investigators are focusing on several questions, including the extent of the comptroller's involvement in the real estate deal and the use of a nonexistent address on city lease documents.

Mrs. McLean, the third-highest official in Baltimore government, did not return messages requesting comment yesterday. A written note was left at her City Hall office and a message at her home.

She said Wednesday, "I was never pursuing the lease in the first place."

The comptroller said last week that she and her husband, James, were about to sell the building at 12 W. Montgomery St., and the lease was with the expected buyer, local developer Otis Warren Jr. He has since canceled his contract to buy the Federal Hill property.

Mrs. McLean has acknowledged that she and her husband needed to sell the former headquarters of her family's now-defunct travel agency to help pay business debts.

The comptroller introduced and rushed through a proposal to lease the building to the city's geriatric nursing service at the Oct. 27 meeting of the Board of Estimates, a five-member body that approves all city leases. The deal called for the service to move from rent-free offices at Montebello Rehabilitation Hospital the McLeans' building, on a 10-year lease with an annual rent of more than $106,000.

As previously reported, Mrs. McLean failed to reveal her financial interest in the building to the Board of Estimates. She also voted in favor of the lease when it came before the board.

On Nov. 24, the board rescinded the lease.

A visit to Schmoke

Soon afterward, Mayor Kurt L. Schmoke said, Mrs. McLean approached him to ask whether the nursing service still wanted offices at the building that once housed Four Seas & Seven Winds Inc.

"She simply asked whether the Health Department was still interested and whether we could continue the transaction," a somber Mr. Schmoke recalled yesterday. "I told her 'No.' I said the matter was under investigation, and it would not be appropriate."

But Mrs. McLean apparently didn't give up.

Just 10 days ago, Mrs. McLean asked a city employee to put together the paperwork for a month-to-month rental, according to three people familiar with the comptroller's actions.

Such leases do not require approval from the Board of Estimates. Mayor Schmoke, Mrs. Clarke and other members of the board, on which Mrs. McLean also serves, said yesterday that they had never heard of the latest rental attempt.

Surprised official

Some officials were surprised to learn yesterday of Mrs. McLean's further attempt to revive the city lease of the vacant building.

"What you tell me shocks me, but it also fits," Mrs. Clarke said. "Apparently, the comptroller is still trying to pursue this issue."

Sources familiar with the grand jury investigation said that the revelation about the month-to-month lease was part of a larger probe into Mrs. McLean's actions.

One of the central puzzles, they said, is why some city documents list the property as 11 W. Hughes St., its rear parking entrance, instead of the more familiar address.

When an official of the city's Health Department first filled out a space request Oct. 19, he listed the address as 12 W. Montgomery St.

But a week later, a committee that approves all city leases received an agenda that gave the address as 11 W. Hughes St. Committee members later said they were unaware the property was the former headquarters of the McLeans' business.

Mrs. McLean, who oversees the city real estate department, has denied knowing anything about the address change.

No comment

The witnesses called before the grand jury yesterday declined to comment to a reporter on the real estate transaction, address change or the probe.

Arthur E. Held, head of the city's Real Estate Department, and Shirley Summers, a city real estate agent, were seen entering the grand jury room at Clarence M. Mitchell Courthouse yesterday morning. Mr. Montanarelli and Chief Investigator James I. Cabezas, who are heading the probe, also would not comment.

L Mr. Held and Ms. Summers each testified for about two hours.

Ms. Summers told reporters that she had already undergone 10 hours of questioning by investigators.

Nervously waving the slip of paper that was her subpeona, Ms. Summers, a 13-year veteran of city employment, said she'd never even received a speeding ticket before.

"I did nothing wrong," she said.

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