Bereano made loan to Harrison

October 05, 1994|By Marcia Myers | Marcia Myers,Sun Staff Writer Sun staff writers C. Fraser Smith and William F. Zorzi Jr. contributed to this article.

Longtime Del. Hattie N. Harrison accepted an unreported $2,000 loan from Annapolis lobbyist Bruce C. Bereano in 1990 in an apparent violation of state ethics laws.

Ms. Harrison, a Baltimore Democrat and the first black woman to chair a House committee, said yesterday that she did not report the loan on her financial-disclosure forms because the money was for a friend in financial trouble rather than for her own use.

"It was simply a loan that was made for a young lady who was very close to me; she was in desperate need," Ms. Harrison said.

When asked why she sought assistance from Mr. Bereano, Ms. Harrison said she was very busy at the time and didn't know where to turn.

"I just happened to run into Bruce in the [State House] hallway and told him I needed a favor," she said.

The loan, which surfaced in an FBI investigation of Mr. Bereano, could become evidence in his federal fraud trial when it begins later this month. Prosecutors are expected to use the loan as an example of how Mr. Bereano used his staff to disguise financial transactions with state legislators.

According to Ms. Harrison, the lobbyist gave the money to an employee of his law firm, who then turned it over to her.

Contacted last night in Jerusalem where he is vacationing, Mr. Bereano declined to discuss the loan. "The only appropriate place to comment is in a court of law," he said.

Colleagues of Ms. Harrison said they were surprised by the delegate's acceptance of the loan.

"That [loan] is something that must be disclosed," said Sen. Julian L. Lapides, a Baltimore Democrat who co-chairs the General Assembly's Joint Committee on Legislative Ethics. "I don't think it should even be permitted. It's a horrendous precedent and smacks of conflict of interest."

Members of the General Assembly are required to disclose anything that might pose a conflict of interest or give the appearance of a conflict of interest, including soliciting or accepting a loan from "a person who would be affected by . . . the legislator's vote on proposed legislation." The law also prohibits accepting gifts of "significant value" that might influence a legislator.

Lobbyists must report gifts with a value of $75 or more. Whether the loan would qualify as a gift was unclear, ethics officials said.

Ms. Harrison chairs the House Rules and Executive Nominations Committee and is a member of the Economic Matters Committee, which deals with virtually all legislation involving business. The committee frequently handles matters of importance to Mr. Bereano's clients, who range from tobacco companies to the health industry. Votes there often are decided by a narrow margin.

"Why would a lobbyist be giving her money for a friend, except by virtue of the fact that she's a legislator," said Nancy Watzman, research director of Congress Watch. "If a lobbyist is doing that kind of personal favor, what is he expecting in return for that favor?"

Ms. Harrison said yesterday that the loan had been paid back in full with interest. She denied doing anything improper.

She said that Mr. Bereano told her that he would make sure the loan was legal and later assured her that it was.

The loan could prove more troublesome for Ms. Harrison than for Mr. Bereano, who has built a reputation as a full-service lobbyist. He frequently courts legislators with meals provided by clients and tickets to sporting events, and roams the State House halls dispensing cigars.

The loan Ms. Harrison accepted was discussed at a meeting of the Joint Committee on Legislative Ethics late yesterday afternoon, according to one source. If the committee pursues an investigation and finds grounds for unethical conduct by Ms. Harrison, it could refer the matter to the full General Assembly for action, but it has no power to censure Mr. Bereano.

John O'Donnell, executive director of the State Ethics Commission, said previous difficulties involving lobbyists had to do with their failure to register. "The question has never come before us where a lobbyist himself makes a loan," he said, adding that he did not know whether that would be illegal.

Mr. Bereano is to go to trial Oct. 31 on charges that he defrauded clients. Prosecutors contend that he disguised more than $16,000 in campaign contributions by asking members of his law firm and their families to make the payments, then reimbursing them from firm coffers. Mr. Bereano is accused of then billing clients in the amount of the contributions.

The $2,000 loan may surface during Mr. Bereano's trial under a provision that allows the government to show examples of wrongdoing other than those alleged in the indictment.

But Mr. Bereano's attorneys say the loan is irrelevant and are fighting to keep evidence of it out of the trial.

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