Lobbyists must pay ex-partner

Judge rules 2 men failed to divide business assets fairly

`Greed took over'

Ruling prompts fourth partner to consider suit

July 31, 1999|By Greg Garland | Greg Garland,SUN STAFF

Annapolis lobbyists Gerard E. Evans and John R. Stierhoff improperly distributed bonuses to themselves to keep a former partner from collecting money he was owed when they dissolved their old firm, a judge has ruled.

Charles County Circuit Judge Christopher Henderson said "greed took over" when the principals of the firm led by Evans and Stierhoff set about dissolving it in 1997. He ordered that the two men and a third lobbyist, Joel D. Rozner, pay about $75,000 to their ex-partner, Charles A. Dukes Jr.

The judge's ruling this week came in a civil lawsuit filed by Dukes claiming that he was not given his fair share of the assets when the firm -- in which he, Evans, Stierhoff and Rozner were partners -- broke up.

Evans, Stierhoff and Rozner set up a new, high-powered lobbying business after dissolving the old one. Rozner left it in April 1998 to join a rival firm.

In their new business, Evans and Stierhoff remain among the highest-paid lobbyists in Annapolis. They are the subject of a federal investigation into their relationship with a Baltimore legislator. Investigators are trying to determine whether the two men persuaded state Del. Tony E. Fulton to introduce legislation to help them win lobbying clients.

In his ruling, Henderson said money left in the old firm's accounts should have been divided among the four partners, but that Duke was not given his proper share.

The controlling partners took $90,250 out of the firm's accounts in February 1997 to pay themselves bonuses -- $66,500 for Evans, $16,625 for Stierhoff and $7,125 for Rozner -- and that money must be repaid, Henderson wrote.

"Greed took over, and they voted themselves a bonus that would virtually wipe out the firm's bank accounts, and effectively deprive Dukes of any value for his shares of stock," the judge wrote.

The bonuses and other expenses that together total $300,000 must be divided among the former partners, Henderson ruled, with Dukes' share of that about $75,000.

Evans and Stierhoff did not return phone calls yesterday. Daniel J. Mellin, an attorney who represented them in the civil suit, said the dispute was simply over the proper way to liquidate the firm's assets.

"Mr. Evans, Mr. Rozner and Mr. Stierhoff always felt the amount due was less than what Mr. Dukes was saying, and [Dukes] always said it was many, many times more," Mellin said. Dukes had been seeking more than $500,000 in his civil suit.

Mellin also said he disagreed with Judge Henderson's characterization of what happened. "I take issue with the judge's reference to greed in the opinion," he said.

Rozner said he had little input into decision-making as the firm split up, as reflected in the much lower bonus he was awarded compared with Evans and Stierhoff.

"The numbers speak for themselves," Rozner said, adding that he has been waiting for the decision in the Dukes case so he can pursue his claims against Evans and Stierhoff stemming from his departure in 1998.

Dukes' attorney, Steven M. Pavsner, said he was disappointed that the judge did not order a larger monetary award. But he said the decision also was positive for Dukes.

"It's a vindication in the sense that the court recognized that Mr. Evan, Mr. Rozner and Mr. Stierhoff did not treat Mr. Dukes fairly, and allowed what the court called `greed' to overtake their obligation to their ex-partner," Pavsner said.

Pub Date: 7/31/99

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