A Paper Trail Goes Unread

April 09, 1995|By C. FRASER SMITH

Spiro T. Agnew, a native son whose success should have been a source of lasting pride, left the nation's second-highest office in 1973 without contesting charges that he had taken kickbacks when he was Maryland's governor.

At about the same time, Baltimore County Executive Dale Anderson served 13 months in jail after being convicted on federal corruption charges.

And troubling questions were raised about the linkage between campaign contributions and government contracts.

Stung by the conclusion that government was for sale in Maryland, the General Assembly acted in 1974 to require corporations doing business with the state to disclose annually the dollar value of their contracts and all campaign contributions made by their corporate officers.

Then-Sen. John J. Bishop thought public disclosure of "what the companies gave and what they got" might put some distance between hard-charging businessmen and ambitious pols.

He wanted the public and the press to have information about a process that went on largely in private. "I thought it would give investigators information and I thought it might reduce the quid pro quos because the reports would be public," he says now.

If only reports were filed, if only the law was obeyed. Often it is not, and no one seems to mind. There is no compliance officer in the secretary of state's office, where the documents are supposed to be filed.

The office makes no effort to learn who owes a report. Violators face a $1,000 fine, a year in jail or both, but no one checks. No late notices are sent, no follow-up made, no investigation ensues unless triggered by some outside inquiry.

Some of the most prominent businesses operating in the state are among the delinquent.

They include include H&S Bakery, owned by John S. Paterakis, one of the most active political contributors in Maryland; Hechinger's, the lumber and hardware chain; the advertising firm of Richardson, Meyers and Donofrio (a company official said the report would be submitted this week); Maxima Computer Systems; the American Ambulance & Oxygen Co.

And the Rite Aid Corp. of Harrisburg, Pa.

The nation's largest drug store chain, which has 181 outlets in Maryland, did millions of dollars' worth of business with various government entities last year, according to data compiled by the state. And an examination of other reports at the state election board shows that Rite Aid-related entities gave at least $17,000 to Parris N. Glendening's gubernatorial campaign.

The corporation also gave $200 to House Speaker Casper R. Taylor. It may have helped others. But it filed no report. Company officials said last week they were unaware of the reporting requirement.

Rite Aid has done much to create a hospitable environment for itself. The company's president, Martin L. Grass of Timonium, bought the old Hecht Co. building on Howard Street, creating optimism that the surrounding commercial area might be revived.

And in a letter, he offered Baltimore Sen. Larry Young the privilege of recommending constituents for jobs -- at a time when Mr. Young's committee was considering a bill that would have reduced the prices Rite Aid pays in Maryland for pharmaceutical products.

Described as good corporate citizenship by its defenders, the offer's timing was called unfortunate by its defenders.

Critics found in it an improper inducement, a new form of political patronage. Parts of the letter were published by newspapers, allowing voters and other lawmakers to judge for themselves.

The legislation that Rite Aid sought would have required prescription-drug manufacturers to offer the same discounts to drug stores that they offer to health maintenance organizations and other bulk purchasers. It died in both houses.

"The letter made it hard for the bill to be considered on its merits," said Sen. Martin G. Madden, the Howard County Republican who voted for a similar measure last year.

At least the letter was made public. The company's contributions have not been fully reported.

Reports filed with the secretary of state show precisely what John Bishop, now a Baltimore County Circuit Court judge, hoped they would and more.

They show that many government contractors systematically attend to the fund-raising needs of elected officials.

Had a report been filed by American Ambulance and its owner, Willie Runyon, for example, it would have shown substantial contributions to Mr. Young. Again, there is no report from Rite Aid, but Mr. Young's filings show the Runyon contributions.

The ambulance man and members of his family were also financial backers of Governor Glendening, giving generously to the gubernatorial campaign and, later, to a legal defense fund established by the governor-elect when his victory was challenged in court.

Mr. Young, who has been one of the most assiduous of campaign fund-raisers, insists that gifts of money to his campaigns don't influence his voting: "I'm going to do what I think is right for my people and my district," he has said.

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