Arundel development chief resigns

Morgan's abrupt action follows weeks of scrutiny

loan program questioned

July 16, 1999|By Matthew Mosk and Laura Sullivan | Matthew Mosk and Laura Sullivan,SUN STAFF

The president of the Anne Arundel Economic Development Corporation abruptly resigned yesterday, as the agency is facing increasing pressure to make public a more detailed accounting of its operations.

Richard J. Morgan handed his letter of resignation to County Executive Janet S. Owens during a brusque encounter at the groundbreaking for the Arundel Mills Mall -- a public event that didn't allow Owens the time or privacy to seek an explanation.

For two years, Morgan has led the agency, a private corporation that receives public funds and is overseen by a board controlled by the county. But his resignation capped weeks of scrutiny that occurred out of public view, and several months of growing tensions between his agency and top county leaders.

Last week, state economic development officials offered a blunt critique of the organization's operation during a private meeting with Owens and her chief advisers.

Also recently, Morgan faced scrutiny about the under-performance of loans brokered by the agency, according to a corporation insider who declined to be identified. Simmering questions about the loan program recently prompted The Sun to send Morgan a formal request to produce relevant financial records.

More attention was expected in coming weeks. The county's auditor is preparing to release a study of the agency's finances this month. And Owens said the corporation's policy of keeping its work private -- even from her -- would change shortly, when she makes her final three appointments to its board of directors.

During a brief interview yesterday morning, Morgan did not explain his decision to leave.

But Morgan's friends and supporters said he recognized that, with the departure of former County Executive John G. Gary, who appointed him in 1997, his performance under a new boss was being monitored.

"He knew that there was a problem between him and the new administration," said County Councilwoman Pamela G. Beidle, a friend who at one time sat on the development corporation's board.

"I think he's truly been hurt, and personally offended by all that's happened. And I think [his departure] is going to be a great loss to the county," she said.

In Owens' earliest days in office, Morgan was forced to accept a new style of leadership that called for greater accountability.

The County Council proposed a full audit, and during the budget process attempted to cut $300,000 from the agency's budget. About $150,000 of that was later restored.

In an interview with The Sun last month, Morgan touted the organization's successes, including luring Opus, a giant retail warehousing company, to Odenton, and brokering loans for such successful businesses as The Ram's Head, a popular Annapolis tavern.

Under the agency's loan programs, the group could lend up to $300,000 to small businesses or start-up companies that had been denied loans from commercial outfits institutions.

While some of the 41 businesses involved in those programs have succeeded, at least eight are no longer in business, according to state records.

Sun staff writer Dan Than Dang contributed to this article.

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