Rosenberg made loan to racing official $20,000 from Crown CEO is characterized as help for a friend

July 16, 1996|By Peter Jensen | Peter Jensen,SUN STAFF

Baltimore businessman Henry A. Rosenberg Jr. revealed yesterday that he lent $20,000 to the chairman of the Maryland Racing Commission, whose failure to disclose the money led to his ouster Friday by Gov. Parris N. Glendening.

A spokesman said that Rosenberg, chairman and chief executive officer of Crown Central Petroleum Corp., had known Dr. Allan C. Levey, the commission chairman, for years and that he helped many people.

Levey's forced resignation was prompted by what Glendening administration officials described as a "serious ethical conflict."

In his resignation letter, Levey admitted that he failed to disclose a "small personal loan which I received and repaid in 1994."

Rosenberg, 66, and his son Ned Rosenberg have invested in racehorses since the mid-1980s, including unsuccessful 1992 Preakness entry Dash For Dotty.

A Crown Central spokesman said Rosenberg charged a "market" interest rate on a $20,000 loan to Levey, who paid him back "some time ago." He offered no further specifics.

"They've known each other for years and apparently the other party [Levey] had some financial reverses," said Joseph M. Coale, the Crown spokesman. "Mr. Rosenberg has helped many, many people in the course of his career. He didn't view this any differently from his other cases."

Coale said he did not know whether Rosenberg was aware of any potential conflict of interest posed by the loan. Rosenberg was unavailable for comment yesterday.

Ralph S. Tyler, Levey's attorney, confirmed that Rosenberg was the source of the loan. He said the two men have been friends for more than 15 years, and saw no conflict because Rosenberg had no matters pending before the commission.

"There was no conflict between Dr. Levey's loan obligation and any matter that ever rose before the racing commission," Tyler said. "Had such a conflict arisen, he would have recused himself. The need to do that never arose."

Levey, 61, a dentist who lives in the Washington suburb of Potomac, referred all questions to his lawyer. Tyler declined to comment on the purpose of the loan, which is under review by the state Ethics Commission.

But a racing industry official said yesterday that Levey told him last week that he faced foreclosure on his home two years ago because of a "bad business deal" at the time he took out the loan with Rosenberg.

"You do anything to save your house," said John D. Poole, owner of the Cracked Claw, an off-track betting facility near Frederick that is regulated by the racing commission. He said he was not told details of the failed investment.

The dismissal comes at a sensitive time for the racing industry. Last week, Joseph A. De Francis, the majority owner of the

Pimlico and Laurel racetracks, was charged with making illegal contributions in 1994 to the Glendening campaign.

De Francis has led a drive in Annapolis to legalize slot machines at racetracks and off-track betting parlors in order to help his tracks compete with out-of-state facilities and to create more tax revenue for the state.

Stephen Montanarelli, the state prosecutor, has charged that De Francis illegally contributed $12,000 to the Glendening campaign sending money to three relatives in Buffalo, N.Y., who gave the candidate $4,000 each.

Glendening has said he had no knowledge of the transaction.

Ellen Moyer, a member of the nine-member racing commission, said she does not believe Levey violated state ethics laws. She said she thinks the governor reacted harshly because of the way the "De Francis issue" is being used by Republicans.

"From what little bit I know, I think it's a stretch to call it an ethics breach," said Moyer, who also is an Annapolis city council member. "The De Francis issue is clearly being used in a partisan fashion to set up issues for the '98 election. I would guess Dr. Levey got caught in the wrong place at the wrong time."

Pub Date: 7/16/96

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