Mitchell IV filings in court may conflict

Statements in bankruptcy omit loan judgment detail and garnisheed wages

February 22, 2003|By Ivan Penn and Walter F. Roche Jr. | Ivan Penn and Walter F. Roche Jr.,SUN STAFF

In sworn statements in U.S. Bankruptcy Court, former state Sen. Clarence M. Mitchell IV - who was recently appointed to a high-paying state job by Gov. Robert L. Ehrlich Jr. - asserts he has not been party to any lawsuits within the last year and has not had his wages garnisheed.

Those statements appear to be in direct conflict with information in other public records and court filings reviewed by The Sun, including:

* Mitchell's wages as a senator were garnisheed last year to help pay a $400,000 debt he and other family members owe.

* Mitchell did not contest a $21,250 judgment in April involving a loan he did not repay.

The filings, which were submitted recently as part of Mitchell's personal bankruptcy case, also misstate who is owed money by the former legislator.

The omissions and the misstated listing of a $400,000 debt were all made under penalty of perjury, court records show. The disclosure comes as lawmakers are expected to sharply question Victor L. Hoskins, Ehrlich's nominee for housing secretary, about Mitchell's state position at Hoskins' confirmation hearing Monday.

According to the court records, Mitchell signed the documents and certified that they were accurate.

Neither Mitchell nor his attorney in the bankruptcy case, Marsden S. Coates, responded to repeated requests for comment during the past two weeks.

In the filing, Mitchell listed a $400,000 debt owed to a company called Narragansett Development. But court records show the debt is owed to Druid Hill Associates, a limited partnership.

Kenneth R. Rhoad, the attorney representing Druid Hill, said the filing listing the debt as being owed to Narragansett was "just wrong."

Narragansett is a company set up by the Mitchell family, which borrowed the money from Druid Hill to purchase a property in Annapolis. Narragansett, however, went bankrupt and has been legally dissolved.

If the U.S. Bankruptcy Court were to accept Mitchell's statements and then garnishee his $92,000-a-year state salary to repay the debt, the money could end up going back to the Mitchells instead of to the Ohio investors who control Druid Hill and gave them the money.

Though Mitchell stated in this month's bankruptcy filing that his wages were not being garnisheed, other court records show that a portion of his salary as a senator was being taken to pay back a portion of the $400,000 debt.

In addition to the questions about the $400,000 debt, Mitchell stated in his bankruptcy case that he has not been a party in any lawsuits over the last year.

However, he did not contest a $21,250 judgment in April in Baltimore District Court over a loan he received in a deal with three city businessmen. That loan led to Mitchell's public reprimand from the General Assembly's ethics committee, because those businessmen had issues before the legislature while he was in office.

Mitchell was defeated by more than a 2-to-1 margin in September's primary by Verna L. Jones, who was then a delegate in the West Baltimore district.

Last month, Mitchell filed for bankruptcy after being sued by several creditors - including the state for back taxes that he later paid. In an updated court filing last week, he listed assets of $2,300 and liabilities of $436,971.48

While some lawmakers continue to defend him, others - including Senate President Thomas V. Mike Miller - question whether Mitchell should receive the kind of state position Ehrlich awarded him.

During the gubernatorial campaign, Mitchell served as head of the "Democrats for Ehrlich" campaign committee and was one of the few elected Democratic officials to publicly endorse the Republican candidate.

In the newly created position of director of urban development for the Department of Housing and Community Development, Mitchell would have considerable influence in shaping the state's efforts to revitalize the city, as well as work on projects in Prince George's and Montgomery counties, Ehrlich officials said. The address for Mitchell's new state office is the same as his former Senate district office at 201 S. Arlington Ave., according to federal court filings.

Miller said senators will likely raise the issue of Mitchell's job with Hoskins, who would be his new boss. As Ehrlich's nominee for housing secretary, Hoskins is scheduled to have a Senate confirmation hearing Monday.

"I'm confident that the secretary will be queried about what role he had in the establishment of the position, the role of the position and the cost savings to Maryland taxpayers," Miller said.

Hoskins said he believes Mitchell will serve Maryland well in his new job, which includes use of a state car.

"He has some very unique qualities for working in urban markets," Hoskins said. "He balances out my team. He will be held accountable for his work."

Some lawmakers say Mitchell should not be banned from all state work.

"Senator Mitchell hasn't gone to jail," said Sen. Nathaniel J. McFadden, chairman of the city Senate delegation, who compared Mitchell to a lobbyist who went to prison for fraud and then resumed lobbying. "Gerry Evans is practicing law, and he just got out.

"If he doesn't have a job, what is he going to do?" McFadden asked.

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