Subpoenas seek Young documents Federal grand jury demands records in corruption probe

Investigation wide-ranging

Ethics committee, Coppin, health care companies notified

January 31, 1998|By Walter F. Roche Jr. and Scott Higham | Walter F. Roche Jr. and Scott Higham,SUN STAFF Sun staff writer Mike Bowler contributed to this article.

A federal grand jury investigating corruption allegations against former state Sen. Larry Young has issued subpoenas demanding hundreds of documents from health-care companies and others with ties to the expelled senator.

The flurry of subpoenas, delivered Thursday and yesterday, is the first public sign of the wide scope of the federal probe into Young's business dealings and his relationship to health care companies with business interests before the General Assembly.

State prosecutors also are investigating Young.

Federal subpoenas were delivered this week to the ethics committee that investigated Young before his expulsion; to Coppin State College, which had a consulting contract with the him; and to at least three health care companies that provided fees and other payments to Young.

When asked whether Young had received a subpoena, his attorney declined to comment last night.

"I will not discuss the particulars or status of any criminal investigation regarding my client," Gregg L. Bernstein said.

State Sen. Michael J. Collins, co-chairman of the Joint Committee on Legislative Ethics, said yesterday that an FBI agent served the panel with a subpoena Thursday seeking committee records relating to its investigation of Young.

The Baltimore County Democrat said the subpoena also demands all notes that committee members took of interviews with witnesses who testified before the panel.

The findings of the ethics panel, which confirmed reports published by The Sun, prompted the Senate to expel the 24-year veteran from the General Assembly last month.

The subpoenas, issued by a federal grand jury at the U.S. District Court in Baltimore and served by FBI agents, demand that all of the documents be delivered to the panel by March 4.

Federal law enforcement officials declined to discuss the subpoenas yesterday.

"Yes, there is an investigation, and there is no further comment," said David R. Knowlton, the FBI's agent in charge of the Maryland field office, which is conducting the corruption probe.

"I can't confirm or deny anything," said first assistant U.S. attorney Stephen M. Schenning, whose office is coordinating the investigation.

"No comment," said assistant U.S. attorney Thomas M. DiBiagio, a federal prosecutor whose name appears on the grand jury subpoenas.

Separate investigation

The federal subpoenas come as the State Prosecutor's Office is conducting a separate investigation into Young's activities. A grand jury in Anne Arundel County has been issuing subpoenas as part of that investigation into whether Young broke any state laws.

State Prosecutor Stephen Montanarelli declined to discuss what effect the federal probe might have on his office's investigation, or whether he is working with federal prosecutors or agents.

In addition to subpoenaing records from the ethics committee, the grand jury is demanding documents from Coppin, which had a no-bid, $300-an-hour consulting arrangement with Young.

Coppin paid Young $34,500 in fees before the arrangement became public late last year and the University System of Maryland Board of Regents canceled the contract.

Coppin President Calvin W. Burnett acknowledged to the ethics committee that he could not document the services Young was to have provided for his fees.

Committee members said that Young also could not provide documentation, other than the $4,000 and $5,000 per month in invoices he sent to the publicly funded college.

Burnett said last night that Coppin had received a grand jury subpoena.

Corporate documents

The federal grand jury also subpoenaed documents from at least two national health care companies -- Merit Behavioral Care Corp. and Kaiser Permanente -- and one regional company, PrimeHealth in Prince George's County, sources and those who have received the subpoenas said.

Merit gave Young and his corporations $115,00 in consulting fees and other payments. Before he became a $300-an-hour consultant for the New Jersey-based firm, Young played a key role in clearing the way for Merit to bid on a multimillion-dollar state mental health contract in Maryland.

Merit lost the contract after it became public that the company had arranged a New York fund-raiser for Gov. Parris N. Glendening in the midst of the bidding and flew the governor in a corporate jet to Manhattan. Merit later purchased the firm that won the contract and became an important mental health care provider in Maryland.

Merit spokeswoman Mafalda Arena said last night that she could neither confirm nor deny that the company had been served with a federal grand jury subpoena.

Kaiser Permanente

The grand jury is also interested in Kaiser Permanente. The company paid to be a sponsor of a conference Young organized through the National Black Health Study Group, a corporation Young created and controlled.

Kaiser officials did not return calls for comment last night.

The grand jury is examining PrimeHealth, a Lanham-based health maintenance organization, because of its ties to Young.

Last fall, PrimeHealth paid to sponsor a study group conference Young organized in Las Vegas. The company also gave $30,000 to another corporation the former senator controls.

PrimeHealth officers did not return calls for comment.

Young, a West Baltimore Democrat, was expelled from the Senate after the ethics committee found that he had used his public position to benefit the corporations he created and ran from his legislative office.

Misuse of taxpayer money

The committee said that he had blended tax money with his own to run the corporations and that he had accepted consulting fees and other payments from institutions and companies with business before the General Assembly.

The committee recommended that Young be expelled. On Jan 16. his colleagues agreed, voting 36-10 with one abstention to remove him from office in the first expulsion from the General Assembly since 1797.

L Young has yet to publicly announce his plans for the future.

Pub Date: 1/31/98

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