Grand jury indicts contractor on bribery charges

July 12, 1995|By Norris P. West and Melody Simmons | Norris P. West and Melody Simmons,Sun Staff Writers

A federal grand jury yesterday charged that a local contractor paid $6,500 in bribes to a city housing authority manager at a time when his son served on the authority's board.

The grand jury handed up a five-count indictment against Larry E. Jennings Sr., whose companies were awarded about $1.3 million in contracts for work in the authority's no-bid repair program.

Yesterday's indictment marked the 13th time federal charges have been filed in connection with the housing authority's $25.6 million repair program, which was sharply criticized last fall in a U.S. Department of Housing and Urban Development audit. Twelve people have pleaded guilty.

"We're not at the beginning, but we're not at the end," said Gary P. Jordan, first assistant U.S. attorney.

Mr. Jennings is charged with making three payments to Charles Morris, a former housing authority management analyst who oversaw the program. Morris has pleaded guilty in the sweeping federal investigation and is cooperating with federal investigators.

Reached at his Baltimore office yesterday afternoon, Mr. Jennings, president of Elias Contracting Corp. and vice president of Environmental Protection Co. Inc., said of the indictment: "I don't have any comments."

George Terwilliger III, a Washington attorney representing Elias, said he could not comment on the specifics of the indictment because he had not read it. However, Mr. Terwilliger predicted that Mr. Jennings would be cleared.

In September, an audit by HUD's regional inspector general said the housing authority "entered into a series of contracts for rehabilitation and lead testing with the father and sister of an authority board member." The audit cited the contracts in concluding that authority regulations against conflict of interest were inadequate.

Mr. Jennings' son, Larry E. Jennings Jr., resigned from the board of the Housing Authority of Baltimore City after being cited by federal auditors with conflict of interest.

Although the audit did not mention the younger Mr. Jennings by name, The Sun reported in April that Elias Contracting, owned by his parents, received contracts for renovation work. It also reported that Environmental Protection, owned by his sister, Georgia M. Page, received contracts for lead-paint testing.

Larry Jennings Jr. said yesterday he had not talked to his father since the indictment. He denied any conflicts and said he rarely talked business with his father. He said the board was a policy-making panel that did not make decisions on contracts. ,, However, the board was briefed on contracts.

"We have no relationships with contracts," he said. "We never approved contracts with contractors."

State records show that the elder Mr. Jennings incorporated Elias Contracting Co. in 1991 -- three years after his son was appointed by Mayor Kurt L. Schmoke to serve on the five-member Housing Authority board.

Elias renovated 63 homes under the no-bid program and received more than $1.1 million. But federal auditors described its work as poor and concluded that the company inflated costs per apartment by as much as 71 percent and billed for work never performed.

According to the grand jury, Mr. Jennings paid Morris $2,500 on April 26, 1993, $2,500 on May 5, 1993 and $1,500 on June 25, 1993 to win no-bid contracts for Elias.

The elder Mr. Jennings was also indicted for tax fraud for allegedly filing tax forms overstating the amount of money his companies paid to subcontractors.

The indictment charges that Mr. Jennings generated money for payments by cashing checks made out to subcontractors, used the money for bribes, then falsely reported the amount paid to the subcontractors.

Housing Commissioner Daniel P. Henson III said charges did not harm the housing authority, saying the problem centered on Morris.

"I don't think one bad apple tarnishes the rest of the 1,400 employees," he said. "I think the record will show that is not the case."

He said most of the problems occurred shortly after he became housing commissioner in March 1993. "Adequate checks and balances may not have been in place at the time, but clearly are in place now," Mr. Henson said.

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