Officials call for scrutiny of records

Arundel agency's volunteers paid selves for goods, services

`These were clear conflicts'

Others say actions revealed in audit were legally justified

August 17, 1999|By Matthew Mosk and Laura Sullivan | Matthew Mosk and Laura Sullivan,SUN STAFF

Anne Arundel County Council members are urging that records of the county's nonprofit economic development corporation be opened to public inspection and that its volunteer board members be subjected to tighter rules.

After reports that at least four volunteer board members have been paid for providing goods and services to Arundel Economic Development Corp., two council members have suggested County Executive Janet S. Owens take swift action.

"These were clear conflicts," said County Council Chairman Daniel E. Klosterman Jr. " It's up to [Owens] to take steps to deal with it."

The agency, set up to attract businesses to the county, has operated for six years as what its officials call a quasi-public agency. It has received taxpayer funds but has been exempted from oversight by the County Council or executive.

Councilman Bill D. Burlison asked Owens to match her strong rebuke of the board with action.

"I think the county executive has made it clear that the sun should shine there," he said. "I want to hear what she proposes be done."

Klosterman, a one-time employee of the county auditor, has long criticized the agency's policy of keeping financial records secret, and he said he hopes Owens will rethink her recent promotion of William A. Badger Jr. to the agency's top job.

Badger was executive vice president in 1997 and last year, when board members approved payments to themselves. He continued to deny public access to records as recently as last week.

"I think his behavior raises serious questions," Klosterman said. "I wonder if it wouldn't have been better to hire someone from the outside and have assurances that things like this won't happen anymore."

Owens, who initially spoke out against board members' actions, appeared in conflict about how to respond to questions outlined in The Sun yesterday. A county audit and other financial reports and interviews showed that:

Members charged the agency more than $20,000 last year for legal advice, accounting work, stationery and computer software.

Forms submitted to the Internal Revenue Service said no financial dealings occurred between board members and the agency.

On the same forms, agency officials denied engaging in political activity between July 1996 and June 1998, the same period during which they lobbied the council to support zoning changes for a proposed auto racing stadium.

All of that occurred before Owens took office in January, but her administration is worried that if she rebukes the board, the county's reputation with the business community will be damaged.

Owens has replaced three of the four board members involved in the deals. She controls five seats on the nine-member board.

Member defends actions

The one involved member who remains on the board, Leonard A. Blackshear, defended his actions in a letter to Owens' chief of staff, Marvin Bond. He said he has offered many hours of free service to the agency and provided computer software to the agency for half of its value.

Owens said that at the board's Sept. 15 meeting, she will ask for a new disclosure policy to help eliminate potential conflicts of interest. It would forbid board members from doing business with the agency. Still, while Owens was publicly criticizing the volunteers, her key advisers spent the day assembling a defense of the development agency.

Media briefing

In a media briefing that Owens said was arranged without her knowledge or consent, Bond and Badger said the board's actions might not have been ethically sound but were legally justified.

Bond produced documents he said proved there was no wrongdoing. One document showed that the agency's $1,200 contract for envelopes was given to a board member only after it was put out for a competitive bid.

The paper, however, showed that another supplier charged less.

Bond also said the responses on the federal disclosure forms were filled out properly. Later, when told he had been contradicted by a spokesman for the IRS, he said he "may have been given bad information."

As the meeting concluded, Owens walked in.

"What on earth is going on?" she said. "I did not approve this."

Pub Date: 8/17/99

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