Schaefer grants Cardin pardon in S&L scandal

September 10, 1994|By John W. Frece | John W. Frece,Sun Staff Writer

In a surprising footnote to the savings and loan scandal that ripped Maryland apart nine years ago, Gov. William Donald Schaefer has quietly pardoned Jerome S. Cardin, the deceased one-time owner of the infamous Old Court Savings and Loan Association.

The pardon, granted Sept. 2, three days before Rosh Hashana, the start of the Jewish new year, was requested in May by Mr. Cardin's widow, Shoshana. Mrs. Cardin is a prominent activist in civic and Jewish community affairs locally and nationally, and is a longtime acquaintance of Mr. Schaefer's.

Mr. Cardin was convicted in 1986 of stealing more than $385,000 from Old Court depositors. He was sentenced to 15 years in prison but was released in 1989, after serving just over a year, because of ill health.

He died in Florida last December at age 69.

The collapse of Old Court led to a string of failures by privately insured S&Ls in Maryland, left thousands of depositors without access to their money for years and ultimately cost taxpayers millions of dollars in a bailout that took years to complete.

Mr. Schaefer's press secretary, Joseph L. Harrison, said the governor granted the pardon based on Mr. Cardin's lifetime of philanthropic activities, because he served time in prison, because he paid $10 million in restitution and because he is dead.

"At this point, there was no reason not to issue a pardon," he said.

Mr. Harrison was asked whether Mr. Schaefer, before leaving office in four months, also might pardon former Old Court owner Jeffrey A. Levitt or anyone else convicted in the S&L fiasco.

"No, absolutely not," Mr. Harrison said. "There is absolutely no connection between this case and any other case. The governor reviews each pardon [request] individually and makes his decision on the merits of each case."

Paul J. Davis, chairman of the Maryland Parole Commission, also recommended that the pardon be granted, Mr. Harrison said.

Mr. Davis could not be reached for comment. But in a May 24, 1994, letter to the governor, a copy of which was obtained by The Sun, Mr. Davis said: "I suggest, in light of the fact that Mr. Cardin is deceased, there is nothing to be gained by continuing the stigma attached to his conviction. His family only suffers now."

Mr. Davis went on to say that Mr. Cardin "was cooperative in the end" and that "several judges and former judges" agreed that a pardon was appropriate. He did not identify the judges.

The Parole Commission chairman offered the governor this political advice: "There will be criticism. However, I don't believe it will be too great. You might want to take the action toward the end of the year, during the Hanukkah, which begins Nov. 27, 1994."

Instead, Mr. Harrison said, the governor had the pardon hand-carried to Mrs. Cardin just before Rosh Hashana, which begins a 10-day period of penitence and spiritual renewal.

Attorney General J. Joseph Curran Jr. said his office was notified just before the pardon was granted. He said the pardon has no legal significance because Mr. Cardin is dead.

"Whatever benefit there is [from a pardon] is only while you are alive. It has zero benefit posthumously. It is a gesture of compassion, which the governor is entitled to give," he said.

He and others in his office said they could not recall any other pardon being granted in Maryland posthumously. Mr. Curran said he thought the governor probably granted it as a favor to Mrs. Cardin.

"Perhaps the governor was sympathetic to all the great works Mrs. Cardin has done. Governor Schaefer is a person with a very big heart, for all his tough exterior, a person with genuine compassion," Mr. Curran said.

Neither Mrs. Cardin nor members of her family could be reached for comment.

News of last week's pardon drew mixed reactions yesterday.

Harry R. Hughes, who was governor when the S&L scandal erupted in May 1985 and whose own political career was damaged by the political fallout that resulted, said, "I don't think I would have done that. Is he going to do it for Jeffrey Levitt too? As far as criminal activity is involved, they are all sort of equal.

"There are a lot of people who think people get off with white-collar crime anyway. This just sort of verifies it in their minds, I'm sure."

Dale P. Kelberman, who is assistant chief of the White Collar Crime Section for the U.S. attorney for Maryland and who in 1986 helped prosecute Mr. Cardin as an assistant attorney general for the state, said he was not consulted about the pardon in advance.

He said he did not know what effect a posthumous pardon would have, other than "to underscore that white-collar criminals get treated differently than other people."

He said depositors "were affected to the same extent by Mr. Cardin" as they were by Levitt, Old Court co-owner Allan H. Pearlstein or other unscrupulous S&L owners.

But some people who knew Mr. Cardin over the years applauded the governor's action.

Former Baltimore County Councilman Gary L. Huddles said, "I would approve of what the governor did. Mr. Cardin paid his debt. People move forward in these things, and the governor recognized this."

State Del. Richard Rynd, a Baltimore County Democrat who knew Mr. Cardin for years, agreed, saying, "I think it was a gesture by the governor to recognize all of the philanthropic things Jerry has done."

Apart from his S&L connections, Mr. Cardin was a lawyer active in Democratic Party politics. He served on the president's council at Notre Dame College and was actively involved with the Jewish National Fund and Associated Jewish Charities.

He founded the Retinitis Pigmentosa Foundation in Maryland In 1971 and, later, the Basic Cancer Research Foundation in Baltimore.

"Look, what was done was done," Mr. Rynd said. "No one liked what happened. Still, the majority thought it wasn't Jerry who caused the problem. It was Jeffrey Levitt."

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