Empowerment zone for city lawyers

May 11, 1995|By Eric Siegel | Eric Siegel,Sun Staff Writer

William E. Carlson, the top lawyer for Baltimore's multimillion-dollar federal empowerment zone, has been soliciting private legal work from companies in the zone for his politically well-connected law firm, Shapiro and Olander.

Mr. Carlson, who stands to be paid at least $118,510 from empowerment zone coffers, mailed about 50 letters to companies eligible for empowerment zone benefits.

He asked executives of those firms to consider contacting Shapiro and Olander for help in applying for the "exciting array" of tax credits and other initiatives offered by the federal redevelopment effort.

Shapiro and Olander, an influential law firm that does considerable legal work for the city and for local governmental agencies, is the law firm of Mayor Kurt L. Schmoke's two highest-ranking political aides. Ronald M. Shapiro, one of the name partners, is Mr. Schmoke's campaign treasurer. The mayor's campaign chairman, Larry S. Gibson, is "of counsel" to the firm.

The solicitations by Mr. Carlson -- appointed by the mayor in January to be general counsel to the quasi-public corporation overseeing the $100 million revitalization effort -- raise serious questions about potential conflicts of interest, some experts in legal ethics say.

One legal scholar said Mr. Carlson's conduct was "an impermissible conflict."

Mr. Carlson defended his solicitations yesterday, saying he thought the chances of possible conflict would be "very low" and promising to "disassociate" himself from representing a business one arose.

Included in the Shapiro and Olander mailings are copies of materials prepared by the city's empowerment zone staff and bearing the logo of the Empowerment Baltimore Management Corp., also known as EMPOWER BALTIMORE!

The empowerment zone initiative seeks to revive dilapidated sections of East, West and South Baltimore. It includes $100 million in federal grants, as well as tax breaks to businesses in the zone that could be worth $225 million.

Mr. Carlson is receiving $15,702 a month from empowerment zone funds from January through the end of this month, and another $10,000 a month from June through September. His total budgeted payment of $118,510 was questioned last week by a member of the board, who asked why the board was paying Shapiro and Olander when another prominent city law firm had offered to do the legal work for free.

As general counsel to EMPOWER BALTIMORE!, Mr. Carlson serves as secretary to the corporation, attending all board meetings. His duties include drawing up all the corporation's legal documents and handling the negotiations with federal agencies overseeing the disbursement of funds.

He has also appeared at public forums with executives of EMPOWER BALTIMORE! to discuss the available tax breaks.

In March, Mr. Carlson said he sent letters to about 50 of the largest companies in the zone, "trying to get business" for his firm. The letter, signed by Mr. Carlson, asked the business executives to call him or three other lawyers at his firm. His was one of a number of similar letters that zone businesses say they have received from law and accounting firms.

William I. Weston, professor of legal ethics at the University of Baltimore School of Law and a senior fellow at the school's Hoffberger Center for Ethics, said yesterday that Mr. Carlson's role as general counsel and his solicitations of business create "an impermissible conflict" of interest.

"He's soliciting the very people who are part of the process," he said.

Mr. Weston questioned what Mr. Carlson would do if the interests of a business he represented went against those of the empowerment zone.

"How does he give advice or maintain confidentiality?" Mr. Weston asked.

Another University of Baltimore law professor, Mortimer Sellers, said: "I would say he's probably doing something a prudent lawyer would avoid. . . . This doesn't sound like a particularly good idea."

Mr. Sellers, also a senior fellow at the school's Hoffberger Center for Ethics, said Mr. Carlson's letter itself did not directly violate Maryland's rules of professional conduct for lawyers, which says a lawyer shouldn't take on a new client if the representation of that client would adversely affect his relationship with another client.

"While not obviously a violation of Maryland's rules, it's the sort of initiative a lawyer might hesitate to make on the basis of possible conflicts of interest," Mr. Sellers said.

Mathias J. DeVito, chairman of the empowerment zone board, said he was unaware that Mr. Carlson had sent out solicitations ** until he was contacted yesterday by The Sun.

Mr. DeVito, chairman of the Rouse Co. and a lawyer himself, immediately called Mr. Carlson about the letter.

After talking with Mr. Carlson, Mr. DeVito said that he thought it was "OK" for his general counsel to send letters to prospective clients, but that, "In terms of representing anybody in negotiations with the city or the Empowerment Zone Management Corp., that's something he can't do. He does not intend to."

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