Companies bypass campaign caps

Developer leads donors in use of related entities to spread political funds

Bill to close loophole languishes

April 03, 2005|By Michael Dresser and Alec MacGillis | Michael Dresser and Alec MacGillis,SUN STAFF

More than a year and a half before the 2006 election, developer Edward A. St. John has quietly established himself as a powerhouse in big-money Maryland politics by orchestrating $160,000 in contributions from more than 50 related companies operating out of his Baltimore County office.

St. John, 62, the chief executive of MIE Properties, is the largest donor among more than a dozen major political players who have used multiple companies to sidestep the state's campaign finance law and donate far more than the cap on individual or company contributions - $4,000 to any one politician and $10,000 overall during a four-year election cycle.

Critics say the absence of meaningful limits on contributions illustrates the laxity of Maryland's election laws, portions of which are described as "virtually unenforceable" by State Prosecutor Robert A. Rohrbaugh. Besides permitting donations through multiple entities, Maryland allows corporate contributions, which are banned in 20 states and in federal elections.

By funneling campaign donations through related entities, St. John has the theoretical ability to mobilize more than $500,000 in 2006 election donations without breaking the law or creating any new companies. And, as Rohrbaugh noted, it takes only minutes to establish business entities.

St. John, whose network of businesses donated $140,000 during the 2002 election cycle, defends the lavish giving, saying, "I think it's what you're supposed to do as a citizen if you're able to do it."

Giving through multiple businesses also permits big donors to fly under the radar - escaping the scrutiny their gifts might attract if they were made under a readily recognizable name.

`Exerting influence'

"It's a way of exerting influence without getting caught," said James Browning, executive director of Common Cause Maryland. "They get to have it both ways. They pay for a campaign, but they don't alarm people in a community or a district."

A bill intended to close the loophole has passed the House of Delegates but is languishing in a Senate committee. It would treat multiple companies as a single operation when totaling up campaign donations, if the same people controlled 80 percent of each company.

But Rohrbaugh recently wrote to lawmakers, saying that the bill is not the solution and would make enforcement even more difficult.

"Creative individuals who are intent on finding `loopholes' in the campaign finance laws will quickly exploit these new `loopholes,'" Rohrbaugh wrote. "While it is encouraging that the campaign contribution laws are being addressed, the potential of abuse will continue as long as artificial entities such as corporations and limited liability companies are permitted to contribute to campaigns."

While St. John is not as well-known as such prominent political money figures as Orioles owner Peter G. Angelos or racetrack owner Bill Rickman Jr., his recent contributions to state candidates of both parties appear to outstrip theirs. His giving has put him on close terms with prominent politicians - he says he serves on the finance committees of Republican Gov. Robert L. Ehrlich Jr. and one of his prospective Democratic opponents, Baltimore Mayor Martin O'Malley.

MIE-related entities have given more than $42,000 to Ehrlich and $26,000 to O'Malley since the 2002 election. Choosing between them would be "real tough," said St. John, who said he spends two-thirds of his time on civic, charitable and political causes while continuing to run his company.

In recent years, MIE - one of the region's largest commercial real estate managers - has benefited from government actions in jurisdictions where it has contributed tens of thousands of dollars to officeholders. Some of the actions have been praised as bringing needed economic development, but others have been controversial.

Development decisions

In Anne Arundel County in March last year - a day before County Executive Janet S. Owens held a fund-raiser in an MIE building - Owens won approval of $2.6 million in upfront aid to help the company build a technology park near Baltimore-Washington International Airport.

At the time, Republican County Councilman Edward R. Reilly said the deal resembled "a sole source contract" because MIE did not have to compete with other developers. St. John said the public benefited because the company made improvements to Nursery Road and later repaid the money.

In 2002, residents of Parole accused Owens of favoring St. John when she supported MIE's proposal for about 30 acres of commercial and residential development in the area. Community activists said Owens broke a promise not to approve building permits until design standards were adopted - a charge she denied.

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