Radio funding draws critics Governor's proposal for loan to network called 'terrible policy'

November 11, 1997|By Michael Dresser | Michael Dresser,SUN STAFF

A Glendening administration proposal to revive a $500,000 economic development award to a radio network is threatening to set off a donnybrook in Annapolis.

The proposed Sunny Day Fund loan to Radio One Inc., a 10-station network co-owned by entrepreneur Cathy Hughes, has been criticized by opponents of Gov. Parris N. Glendening as an attempt to curry favor with an influential figure in the African-American community.

"It's terrible policy. It smacks of using public funds for political gain. It is using public funds to bias the media," charged Del. Robert L. Flanagan, a Howard County Republican, the House minority whip and the most vocal critic of the award.

But Del. Howard P. Rawlings, the Baltimore Democrat who heads the House Appropriations Committee, contended that a revised version of the proposal meets all the requirements for a Sunny Day Fund award. The only reason it is controversial, he said, is that "this Republican pit bull made it a gubernatorial election issue."

Rawlings, like Flanagan, is a member of the joint Legislative Policy Committee, which is likely to take up the matter late this month or in December. The panel, which includes the leadership of the House and Senate, has the final say on disbursement of Sunny Day Fund money.

In June, the committee turned back an earlier version of the proposal. After hearing an unfavorable recommendation from legislative auditors, the panel told the Department of Business and Economic Development to take the deal back to the drawing board.

Whether it can win approval this time is unclear. The committee's co-chairmen, House Speaker Casper R. Taylor Jr. and Senate President Thomas V. Mike Miller, are noncommittal, saying they haven't had time to study the details. Other key members have reservations about the deal.

"I don't know if we'd give it the time of day if it wasn't championed by important people," said Sen. Barbara A. Hoffman, a Baltimore Democrat who chairs the Budget and Taxation Committee. She said that the new proposal appeared to be "marginally better" than the one rejected in June, but that she would have to study the details before deciding whether to support it.

Two of Hughes' stations, WOLB-AM in Baltimore and WOL-AM in Washington, carry black-oriented talk shows that frequently touch on political topics. Among the politicians who regularly appear on the stations are state Sen. Larry Young, a Baltimore Democrat, and Sen. Decatur W. Trotter, a Prince George's Democrat, both strong supporters of the award and political backers of Glendening.

Racial bias suggested

Some African-American public officials have suggested that opposition to the award is grounded in racial bias, noting that the Radio One deal would be the first Sunny Day Fund loan to a minority-owned firm.

But Flanagan dismissed those concerns.

"The history of disbursement of economic development funds in Maryland is that minorities have enjoyed more than their fair share," said Flanagan. "This is about raw politics. It has nothing to do with race."

Rawlings, the most powerful black legislator in Annapolis, also discounted race as a factor -- offering his frequent antagonist a testimonial of sorts.

"Flanagan is strictly motivated by partisan politics," said Rawlings. "He saw an opportunity to take a cheap shot at the governor and he took advantage of it."

Judi Scioli, Glendening's press secretary, reaffirmed the governor's support of the proposal.

"To insinuate that either the owner or the governor would in any way compromise the integrity of that enterprise is nasty and irresponsible," Scioli said.

Hughes could not be reached for comment.

Like the original proposal, the new one is intended to help underwrite Radio One's move from the District of Columbia to Prince George's County. Sunny Day Fund loans and grants are designed to help finance "extraordinary economic development opportunities" that bring or retain jobs for Maryland.

The primary objection to the initial deal was that the loan would have been made directly to Radio One's owners, Hughes and her son, Alfred Liggins. Committee members also criticized that it did not include financial participation by the county that would benefit from the project.

Rawlings said those concerns led him to oppose the original deal. But he said the flaws have been "fixed" in the new version, which has not been made public.

According to Rawlings, the restructured loan would go to the corporation rather than to its owners. Prince George's County has agreed to contribute about $50,000 in the form of training for Radio One's employees.

The original award was structured as a $500,000 loan that would be converted to a grant if the company met its commitments to hire 40 more Maryland workers by 2002 and retain a force of 190 workers in the state through 2005. Rawlings said the new version makes only $400,000 of the $500,000 convertible to a grant.

Such conversions are a common feature in Sunny Day loans.

The money would be used to help Radio One purchase a 78,000-square-foot office building in Lanham. Radio One, which has already moved to the building, is expected to occupy only 17,000 square feet of it -- an aspect of the deal that was criticized by the auditors in June.

The new proposal apparently does not change that provision, but Rawlings defended the use of the majority of the space for rental, saying it was consistent with past economic development deals.

Public funds

But for Flanagan, an outspoken supporter of GOP front-runner Ellen R. Sauerbrey for governor, the details of the proposal aren't important. He said he opposes any use of public funds for economic development deals with media companies -- no matter what ideology they espouse.

"When Governor Sauerbrey takes over, I would not want to see her providing economic development funds to WCBM," said Flanagan, referring to the Baltimore radio station with a conservative bent.

Pub Date: 11/10/97

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