Port's chief put on leave pending securities probe

March 07, 1995|By Suzanne Wooton and John W. Frece | Suzanne Wooton and John W. Frece,Sun Staff Writers

The executive director of the Maryland Port Administration was placed on administrative leave yesterday by Gov. Parris N. Glendening in the midst of a federal investigation into alleged insider trading of Baltimore Bancorp stock.

The abrupt suspension of Michael P. Angelos was coupled with the resignation of the port's second-in-command, Deputy Director G. Gregory Russell, who was a director of Baltimore Bancorp at the time of its sale to First Fidelity Bancorp. last year.

Glendening aides said yesterday evening that they did not know why Mr. Russell resigned, and he could not be reached for comment.

Yesterday, Mr. Angelos met for two hours with Mr. Glendening and his chief of staff, Major F. Riddick Jr., to discuss the insider trading investigation. Mr. Angelos declined to comment after the closed-door meeting.

But Mr. Riddick said Mr. Angelos, who was already on bereavement leave because of the death of his father, will move into a paid administrative leave when his family leave ends.

"He will be on leave until such time as any issues around this are cleared up," Mr. Riddick said. "When that is cleared up, we'll be able to move on from there." Mr. Riddick said Mr. Angelos told him repeatedly he had done nothing wrong.

The probe by the U.S. Securities and Exchange Commission centers on the purchase of stock by the 43-year-old Mr. Angelos prior to Baltimore Bancorp's merger with New Jersey-based First Fidelity, according to people familiar with the inves- tigation. The $346 million merger, announced a year ago, was completed in December.

The turmoil at the top of the Maryland Port Administration (MPA) comes on the heels of a series of troubles for the new Glendening administration and less than a month after he reappointed Mr. Angelos to the $105,000-a-year job running the state's five marine terminals. Just a month ago, Mr. Russell came under fire for negotiating a $3 million state deal to buy an Inner Harbor cruise ship terminal site that is not far from Harrison's Pier 5 Hotel, which Mr. Russell and four other investors are trying to buy.

A spokesman for the SEC in Washington refused to comment yesterday.

"We are not authorized to confirm or deny an investigation," said John D. Heine, a spokesman for the federal agency, which regulates securities markets.

But Mr. Riddick said both Mr. Angelos and Mr. Angelos' attorney confirmed to him yesterday that the SEC was investigating him.

While it was publicly known that the Baltimore banking company eventually would be sold after a change in management in 1991, the timing and the sale price remained uncertain.

"Everybody knew the bank was for sale," Edwin F. Hale Sr., who was chairman of the former Baltimore Bancorp, said yesterday. "We said the bank would be sold if we had a bona fide offer from a bona fide purchaser."

Mr. Hale, 48, became chairman of Baltimore Bancorp in 1991, just before the company's financial problems emerged and threatened to sink the institution.

In December, after a dramatic four-year turnaround, Baltimore Bancorp was sold to First Fidelity. The acquisition brought First Fidelity's assets to about $35 billion, with almost 700 branches in five states. Baltimore Bancorp shareholders received $20.75 in cash for each share.

According to Mr. Hale, SEC investigators have talked with him several times during the past month. Typically, the SEC looks for links between certain stock purchases and negotiations known only to company insiders before their public disclosure.

"They have spoken to me about the time frame in which the bank was sold," Mr. Hale said yesterday. "I always made it clear the bank would be sold, but they wanted to know certain trigger points."

Mr. Hale also owns Hale Intermodal Transport and Hale Intermodal Marine companies, trucking and barge firms that do extensive business in the port of Baltimore. Several years ago, he appointed Mr. Russell, then the port's chief financial officer, to the bank's 13-member board of directors.

According to the company's final filing with the SEC before the merger, Mr. Russell owned 38,146 shares of Baltimore Bancorp stock.

Mr. Riddick said that Mr. Angelos yesterday showed him documents indicating that he had purchased Baltimore Bancorp stock but had done so at various prices over several years dating back to at least 1992.

In fact, financial disclosure statements filed by Mr. Angelos with the State Ethics Commission show that he owned Baltimore Bancorp stock, but they were unclear about the precise dates that the stock was purchased or sold.

"He's [Mr. Angelos] indicating no conflict [of interest], no issues of concern. He indicates clearly and demonstrates he has purchased stock over time," Mr. Riddick said, adding that the governor still has confidence in him.

"I think he is feeling confident. He knows Michael is a tremendous asset in working with the port and the business community."

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