Law firm has no conflict, Young case counsel says Attorneys also represent conglomerate buying company in ethics probe

January 10, 1998|By Walter F. Roche Jr. and Scott Higham | Walter F. Roche Jr. and Scott Higham,SUN STAFF

The special counsel directing the investigation of Sen. Larry Young is a partner in a law firm that represents a health-care conglomerate purchasing one of the companies at the center of the state ethics inquiry.

Jervis Finney, counsel to the Joint Legislative Ethics Committee, is a partner in the Baltimore firm Ober, Kaler, Grimes & Shriver.

The law firm represents Magellan Health Services of Atlanta, one of the nation's largest health-care businesses. Last year, Magellan announced plans to purchase Merit Behavioral Care Corp., a New Jersey company that had hired Young as a $300-an-hour consultant. The sale is pending.

Merit, through a subsidiary, has a contract with the state of Maryland. Young, who chairs an influential health-care subcommittee, never disclosed his $7,000-a-month consulting deal with Merit to state and legislative ethics panels, records show.

The ethics committee is examining a long list of disclosures made by The Sun last month, including a report that a company the senator controls, the LY Group, was receiving tens of thousands of dollars in consulting fees from Merit. The panel is expected to conclude its deliberations Monday.

Finney said this week that he had disclosed his law firm's relationship with Magellan to legislative leaders before his appointment last month. He also mentioned the relationship during a news conference held to announce his appointment and said he does not work on legal matters dealing with Magellan.

"It's not a conflict because it isn't a conflict," Finney said. "It was reviewed by all sides."

The relationship was not disclosed to Young's attorneys.

One of Young's attorneys, Gregg L. Bernstein, said this week he is confident that the ties between Magellan and Merit would not affect Finney's handling of the case against his client.

"We were not aware," Bernstein said. "But I have the utmost confidence in Mr. Finney's impartiality. He's a straight-shooter, and I don't think he would be swayed by that sort of thing. Whether it raises the appearance of a conflict is another issue."

A spokesman for Magellan said this week that as a matter of policy, the business would not discuss whom it has retained for legal work. Finney said Ober, Kaler's work for Magellan is related to federal regulatory issues.

Ober, Kaler managing partner John C. Baldwin declined to discuss his firm's work for Magellan.

A Baltimore physician says the law firm told her it would be a conflict to represent her when she was considering filing a lawsuit against another firm controlled by Magellan.

Dr. Dora D. Logue was considering suing Green Spring Health Services of Columbia last year over the quality of care it had provided to her son. She said an Ober, Kaler lawyer told her that the firm could not represent her because Green Spring was affiliated with Magellan, one of Ober, Kaler's clients.

That attorney, Kevin Dunne, said yesterday that he was "certain" he never spoke with Logue. He said her name is not contained in records the firm keeps to show contacts with clients or potential clients. Logue said she spoke with Dunne during phone calls, including one on Dec. 30, 1996. She said he told her the firm could not represent her because of the conflict.

Senate President Thomas V. Mike Miller announced Finney's selection Dec. 22 and called the former U.S. attorney a man of unquestioned integrity. Because Finney did not personally represent Magellan, Miller said, he did not see a conflict in the Young case.

"He has prosecutorial experience. He has legislative experience," Miller said. "But most of all, he's a person of unquestioned integrity."

Finney is leading the legislative probe into 20 ethical violations Young may have committed while blending his public responsibilities with his private business dealings. The committee is examining findings contained in Dec. 3 article in The Sun.

The paper disclosed that Young had consulting contracts with Merit and Coppin State College. He never reported the Merit contract to the state and legislative ethics committees, but he did report the Coppin contract to the State Ethics Commission.

The newspaper also reported that Young has been running at least three corporations out of his legislative district office in West Baltimore. Yesterday, records were provided that purport to show the senator had a separate lease at the office for the LY Group and was making separate rent payments on the space above what the state is paying.

The records show the LY Group wrote one rent check two months before a lease was signed to occupy the building at 200 S. Arlington Ave. The LY Group then wrote one other check, for $1,000, to cover the rent for the next 15 months.

After The Sun published its report Dec. 3, the LY Group wrote two more checks to the landlord of the building, BMC Enterprises, one for $1,000 on Dec. 16 and the other for $2,000 on Dec. 17. The backs of the checks, which would show the dates of deposits, were not made available to the newspaper.

Pub Date: 1/10/98

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