City officials set to testify for grand jury

Council members to begin testimony this week

Documents were subpoenaed

Finances, business links focus of federal inquiry

May 10, 2004|By Doug Donovan | Doug Donovan,SUN STAFF

Baltimore City Council members are scheduled to begin testifying this week before a federal grand jury conducting a wide-ranging investigation into the elected officials' finances, relations with certain businesses and campaign records, according to sources familiar with the investigation and a subpoena obtained by The Sun.

The testimony is expected to focus on the five years of documents that U.S. Attorney Thomas M. DiBiagio obtained through subpoenas to the council issued in September and October, said the sources, who asked to remain anonymous because of the secretive nature of grand jury proceedings.

The latest phase in the inquiry comes after DiBiagio widened the probe to include dealings that city officials - including council President Sheila Dixon - have had with developers.

Through a spokeswoman, Dixon said Friday that she has not been subpoenaed to testify before the grand jury. She did, however, receive a subpoena last year requesting documents.

"She's been asked for information, and she's provided it," said Caprece Jackson Garrett, Dixon's spokeswoman.

It is not clear whether the other 18 council members have received subpoenas to testify and whether a few appeared before the grand jury last month or met with DiBiagio and his investigators, sources said.

What is clear is that a formal schedule of testimony from nearly half the council members is to begin this week and is expected to continue through June, the sources said.

All council members reached for comment said they could not discuss the investigation's latest phase, which has rattled the elected officials and the businessmen who have received or been named in the subpoenas.

Neal Janey and Larry A. Nathans, the attorneys representing the council members, could not be reached for comment Friday. DiBiagio's office does not confirm or deny investigations.

Receiving subpoenas to produce documents and to testify before the grand jury does not mean the recipients are targets of an investigation.

"Typically, you will not be subpoenaed for testimony before the grand jury if you're the target," said Andrew C. White, a former federal prosecutor and defense attorney specializing in white-collar crimes.

White said DiBiagio will be asking council members to testify about the documents they have produced. Those documents relate to information dating back five years that detailed council members' acceptance of gifts and loans, their outside income, hiring practices, and relationships with two local businessmen - Edwin F. Hale Sr., chairman of 1st Mariner Bank, and Ben Greenwald, Arrow Parking's vice president.

Federal prosecutors are also examining an expense-account system that paid council members $5,000 a year each with no oversight and permitted them to pocket as income whatever was not spent on city business.

The recent subpoenas for testimony also ask council members to produce information "relating to any campaign contribution received" from anyone with business with the city or with an interest in legislation.

Council members are not the only ones who have been asked to produce documents.

Minority developers Ronald H. Lipscomb and Brian D. Morris have provided DiBiagio with records reflecting any income, loans or grants they received from the city, and any gifts they gave Dixon and three other city officials, sources said. Lipscomb is president of Doracon Contracting, a business listed in the city's database of certified minority-owned companies.

Morris is an appointee of Mayor Martin O'Malley to the city school board and the chief executive of Legacy Unlimited LLC, a financial services holding company, according to his biography on the city schools' Web site. O'Malley also named Morris interim director for the Mayor's Office on Minority Business Development in 2000.

The federal subpoenas to Lipscomb and Morris, issued in February, also asked for documents related to any city contracts received from 1999 until early this year.

They also sought information on any gifts provided to Dixon and to former real estate officer Anthony J. Ambridge, now a developer and partner with Lipscomb, and two former O'Malley appointees, Owen Tonkins and Gary M. Brooks, according to sources familiar with the probe.

Brooks left his position Dec. 30 as chief executive of the Baltimore Community Development Finance Corp., a city-related lending agency. Tonkins, who succeeded Morris, left at the same time after nearly three years as head of the Office of Minority Business Development.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.