The General Assembly's ethics committee has begun an inquiry into a $10,000 loan that Sen. Clarence M. Mitchell IV received in a quiet agreement five years ago with two Baltimore bail bondsmen and a city transportation company owner, sources said yesterday.
Word of the committee's action came as independent ethics experts criticized the undisclosed loan as a conflict of interest for the senator because the three men own businesses that are routinely the subject of legislation before the Assembly.
The Joint Committee on Legislative Ethics met yesterday to discuss the loan after Mitchell submitted a written statement to the panel Monday night, the evening before The Sun published an article about the loan.
In the statement, Mitchell described the loan agreement and to whom the money was owed - his first disclosure of the transaction to the ethics committee since the deal was made in June 1997.
According to Mitchell's lawyer, the senator delivered the statement in response to a request from committee members, who had learned of the loan agreement when questioned about it by a reporter.
The committee met yesterday in closed session for more than an hour. Under legislation passed in 1999, the panel has broad powers to investigate complaints of ethics violations, including the authority to subpoena witnesses, though it was unclear if that will happen.
Sanctions for a violation of ethics law could include an oral or written reprimand, a referral to law enforcement agencies for further investigation or a recommendation of expulsion from the Assembly - an action rarely taken.
Citing confidentiality rules, state Sen. Michael J. Collins, a Baltimore County Democrat and co-chairman of the committee, would not confirm whether the panel is looking into the case. But sources knowledgeable about the committee's discussions said members were looking into the loan.
Mitchell, a 39-year-old Baltimore Democrat, has declined to comment. His lawyer, Arthur M. Frank, said the senator "welcomes" the inquiry into the loan.
"He knows, in the end, it will show he did nothing wrong," Frank said.
According to the three businessmen who arranged the loan, Mitchell requested $10,000 in a phone call to the owner of the bail bonds company during the 1997 General Assembly session.
The call led to a meeting in which Baltimore bus company owner Joe Louis Gladney Sr. agreed to put up the money for the loan, but it was made in the name of an unincorporated investment firm. The request was made during a time of mounting personal debt for Mitchell.
Court documents filed to collect on the loan say it was made to Mitchell by "Cedardale Investment Associates," at an address that is a home in Baltimore's Ashburton neighborhood.
That firm is owned by Gladney, according to the statement Mitchell filed Monday night. Gladney also owns Gladney Transportation Inc., which provides bus service for city schoolchildren. He has said he agreed to put up the money during a meeting with Mitchell and bail bondsmen John Griffin and Robert M. Campbell.
As part of the deal, Campbell, who was president of the Black Bail Bondsman Association, agreed to be a co-signer on the loan. Mitchell, who ran his family's bail bonds business until November 1997, was a member of the bondsman association.
The Assembly considers bills on bus safety nearly every year. The promise of the loan was made as Mitchell was proposing legislation that would have charged a 1 percent license fee to bail bondsmen on the gross value of bonds written in Baltimore Circuit Court. The fee could have cost the industry tens of thousands of dollars.
Mitchell, then a state delegate, withdrew the legislation late in the 1997 session.
The senator also cast a key vote that killed a 1999 bill that would have provided lawyers for low-income defendants at bail reviews. Supporters said that would have led to the release of many defendants without bail, costing the industry substantial profits.
Mitchell has never paid on the loan and was sued in July to collect the money. With interest, the debt now stands at $18,610.
Ethics experts say the lawmaker's actions showed at best poor judgment and at worst an appearance of impropriety.
"The timing of the loan and Mitchell's actions on the license-fee bill suggest an apparent effort to shake down the bail bondsmen for his own financial gain," said Paul Quirk, director of the Paul H. Douglas Ethics in Government Program at the University of Illinois.
Bill Allison, managing editor for the Center for Public Integrity, a nonpartisan government watchdog organization in Washington, said that because Mitchell did not disclose the loan, it has the appearance that he believed there was something wrong with it.
"If most people need a loan, they go to a bank or they find a way to make ends meet," Allison said. "Obviously, this was somebody doing a big favor for him. I think there's a serious, serious conflict of interest here."
Senate President Thomas V. Mike Miller said he has spoken with Mitchell about the steps he should take to ensure the issue is properly resolved.
"My advice to him, in addition to full disclosure, was to meet with the ethics counsel of the General Assembly," Miller said yesterday. "And I've been told that he is going to do so."
Suzanne S. Fox, director of the Maryland Ethics Commission, a state agency also charged with examining the conduct of elected officials, has declined to say whether the commission is looking into the loan agreement.