Racing board head is out Glendening demands Levey's resignation after loan oversight

'Potential conflict of interest'

Ethics panel informs governor about failure to disclose funding

July 13, 1996|By Michael Dresser | Michael Dresser,SUN STAFF Sun staff writer Tom Waldron contributed to this article.

Gov. Parris N. Glendening has dismissed Dr. Allan C. Levey as chairman of the Maryland Racing Commission after learning that Levey failed to disclose a personal loan as required by law.

The ouster casts another shadow over the Maryland racing industry, which is already embroiled in controversy after the announcement earlier this week that the majority owner of Pimlico and Laurel racetracks has been charged with making illegal campaign contributions to Glendening's 1994 campaign.

The forced resignation was announced yesterday evening by the governor's office, which released a series of letters revealing what Glendening described in one as allegations of a "serious ethical conflict."

According to the letters, Glendening demanded Levey's resignation Thursday after John E. O'Donnell, chairman of the State Ethics Commission, notified the governor's office Wednesday of a "potential conflict of interest."

Levey submitted his resignation as both chairman and non-salaried member of the commission in a letter dated yesterday.

"Questions have been raised about a small personal loan, which I received and repaid in 1994, which I omitted from my financial disclosure statement," Levey wrote. "I regret this omission and choose to resign rather than involve the racing industry in additional controversy at this critical time."

Repeated calls to Levey's home and office were not returned. A check of his 1994 disclosure form showed that no loans were reported for that year.

Levey, a member of the commission since 1990, was appointed chairman by Glendening last year. There was no announcement of who would replace him.

The resignation leaves a critical vacancy as the commission could soon face the tricky question of what to do about Joseph A. De Francis, the principal owner of Pimlico and Laurel. De Francis was charged Tuesday with illegally masking $12,000 in political contributions by sending money to three relatives in Buffalo, N.Y., who each sent $4,000 to the Glendening campaign.

The nine-member commission, which meets monthly, regulates Maryland's horse racing industry and licenses all persons, associations or corporations that operate tracks. Its powers include approving all racing dates, changes in track ownership and locations for simulcasting and off-track betting.

The 61-year-old Levey, an oral surgeon who practices in Oxon Hill and lives in Potomac, is a former state Republican chairman who bolted the party to support Glendening in his race against GOP nominee Ellen R. Sauerbrey.

Joyce Terhes, the current Republican state chairman, showed little sympathy when told of the news.

"I have been distraught that he had endorsed Glendening. I truly believe his endorsement of Glendening was to get the position of chairman of the Racing Commission, but until I have further details, I will have no further comment," she said.

At the time of his appointment in August 1995, Levey won plaudits from members of the racing industry, including De Francis. "I think Allan is an excellent choice," De Francis said at the time.

Since then, Levey has been supportive of the industry's position -- championed by De Francis -- that Maryland tracks need to be allowed to match Delaware tracks in the installation of slot machines.

Spokesmen for the governor revealed few details, citing Levey's privacy rights now that the ethics commission is reviewing the matter.

The governor's announcement made no mention of who might have made the loan to Levey, but the lender is presumably connected with the racing industry in some capacity.

John E. O'Donnell, chairman of the ethics commission, said members of part-time boards such as the racing commission are required to report loans only when they come from somebody connected with the industry they regulate.

"There has to be a relationship between the work of the board and the people the board deals with and the item to be disclosed," said O'Donnell, who declined to discuss any specifics of the Levey case.

While O'Donnell would not confirm whether the ethics commission has launched a formal investigation of Levey, he said the board does have the power to launch such a probe -- even after the resignation of the affected official.

Pub Date: 7/13/96

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