Steinberg, Venetoulis battle in court

January 28, 1994|By Patrick Gilbert and William F. Zorzi Jr. | Patrick Gilbert and William F. Zorzi Jr.,Staff Writers

Once political allies, now courtroom enemies, Lt. Gov. Melvin A. Steinberg and his former campaign coordinator, Theodore G. Venetoulis, are locked in a dispute over Mr. Venetoulis' brief stint at the wheel of the Steinberg gubernatorial effort.

Mr. Venetoulis, a former Baltimore County executive and political analyst, filed suit against Mr. Steinberg and his campaign committee Dec. 29, claiming he was dismissed

without cause in October after less than five months on the job.

The lieutenant governor and his committee counter-sued the same day, alleging financial irregularities by Mr. Venetoulis involving payment of his salary, campaign bills and expense accounts. Mr. Steinberg also charged that Mr. Venetoulis overstepped his authority and at times "acted as if he . . . were the gubernatorial candidate."

How the wrangling will affect the Steinberg campaign is unclear, but it is likely to damage both men in the short run.

Some Steinberg supporters say they are worried that the dispute will give the lieutenant governor's opponents an opportunity to question his management ability. Mr. Venetoulis, who had come off a failed commercial printing venture and had hoped to launch a political consulting firm with the Steinberg campaign as his first account, might be forced to pursue other interests.

"I can't make comments on it because it's in litigation," Mr. Steinberg said yesterday, directing further questions to his lawyer, T. Allen Mott, who also declined to discuss the suits.

Mr. Venetoulis had a similar response, saying, "It's in the hands of the attorneys." His lawyer, John P. McKenna Jr., also declined to comment.

Both sides have requested a court trial, which has not been scheduled. In addition, Mr. Venetoulis is seeking an injunction ordering the Steinberg campaign committee to maintain a $180,000 balance -- the salary Mr. Venetoulis claims he is due -- in its treasury pending the trial.

Mr. Steinberg hired Mr. Venetoulis, an old friend and one-time political ally, as his campaign coordinator in June. According to court documents, Mr. Venetoulis' contract called for him to receive $70,000 in two $35,000 payments from June to December 1993.

Beginning this month, Mr. Venetoulis would have received $15,000 a month through September, plus a $45,000 bonus if Mr. Steinberg won the Democratic primary.

The Steinberg campaign committee fired Mr. Venetoulis Oct. 29. In the counter-suit, the Steinberg forces alleged irregularities in Mr. Venetoulis' handling of campaign funds.

In particular, they allege that Mr. Venetoulis submitted an invoice for his first salary payment of $35,000 in July but actually directed the committee to pay him $40,000.

The counter-suit also questions the payment of $900 to a Capitol Hill lobbying firm owned by Mr. Venetoulis' wife for a fax machine that allegedly cost $750, charges Mr. Venetoulis with incomplete documentation of expenses and car phone bills, and alleges that he took $100 from petty cash without signing a receipt, telling a staffer "not to worry about it."

Although it does not go into detail, the suit alleges that Mr. Venetoulis "at times overstepped his authority and at times acted as if he, not Mr. Steinberg, were the gubernatorial candidate."

Mr. Steinberg's suit asked for compensatory damages "believed be in excess of $5,000" on several counts, including breach of contract and breach of fiduciary duty.

The dispute signals the end of a fruitful alliance. Mr. Venetoulis was Baltimore County executive from 1974 to 1978, after running successfully as a reform candidate in the aftermath of the criminal kickback charges against two of his predecessors, Dale Anderson and Spiro T. Agnew. Mr. Steinberg was the only Baltimore County senator to support Mr. Venetoulis' bid.

Mr. Venetoulis managed former California Gov. Jerry Brown's upset victory over Jimmy Carter in Maryland's 1976 Democratic presidential primary.

When he ran for governor in 1978, Mr. Venetoulis finished far fTC down the list in a crowded Democratic primary, failing to carry even one precinct in his home county. Once again, Mr. Steinberg went against the political tide and supported his old friend.

Despite those loyalties and Mr. Venetoulis' experience, Mr. Steinberg surprised some supporters when he tapped Mr. Venetoulis to bring life to his lackluster gubernatorial effort.

The doubters worried that Mr. Venetoulis would bring too much baggage to the campaign. They cited Mr. Venetoulis' own loss in 1978, his close ties to Gov. William Donald Schaefer and Mr. Venetoulis' more recent financial troubles, including his filing for personal bankruptcy protection under the weight of business-related debts of more than $1 million from a failed Silver Spring commercial printing operation.

Nevertheless, Mr. Venetoulis was hired because he had run a statewide campaign before and knew Maryland politics.

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