Donations scrutinized

Steele contributors tied to grant recipients, data show


Lt. Gov. Michael S. Steele has collected thousands of dollars in campaign contributions from board members of the not-for-profit organizations selected by his office to receive unrestricted state grants, a review of campaign finance records shows.

Officials with three of four African-American groups that in early 2004 received a combined $250,000 - the result of an insurance settlement received by the state - gave $13,711 to the lieutenant governor about the same time or in the months after, according to a state elections board database.

The donations to Steele's state campaign account came before Steele became a candidate for U.S. Senate, but at a time when the Republican lieutenant governor - the first black statewide elected official in Maryland history - openly talked about running for governor in 2010.

A Steele Senate campaign spokeswoman said there was no connection between the settlement money distributed in January 2004 and the campaign donations.

"It is insulting that these community leaders who chose to support the lieutenant governor and his vision for change are having their motivations questioned," spokeswoman Melissa Sellers said.

But other ethics experts and campaign finance watchdog groups said the financial transactions warrant closer scrutiny.

"It does sound very questionable," said Alex Knott, political editor for the Center for Public Integrity in Washington. "It would be interesting to know whether there were any nods and winks that took place as this money was being allocated."

The grant money was awarded by the Maryland Insurance Administration, whose administrator, Alfred W. Redmer Jr., asked Steele to recommend African-American organizations to receive the proceeds of a settlement with the Monumental Life Insurance Co. The Maryland-based company had been accused of race-based pricing policies.

The proceeds were distributed to four groups without a competitive application process and were announced in letters stating that the money was given "on behalf of Lieutenant Governor Michael S. Steele."

The Greater Baltimore Urban League received $100,000. The Coppin State University Development Foundation, Bowie State University Foundation and Global Developmental Services for Youth Inc., a Prince George's County group run by the mayor of Seat Pleasant, each received $50,000. An additional $15,000 went to the state's general fund.

Just days before the Monumental checks arrived, Greater Baltimore Urban League board Chairman Raymond V. Haysbert Sr. contributed $1,261 to the Michael Steele for Maryland Committee. Haysbert's former company, Forum Caterers in Baltimore, gave $4,000, as did Haysbert's daughter, Nikita Haysbert, who runs the business.

Those campaign donations - which came in the form of services, not cash - appear to have been generated during a fundraiser held for Steele by a minority contracting group. At the time, Steele was head of a commission considering ways to change Maryland law to make sure more of the state's business went to minority-owned firms.

Raymond Haysbert, who also wrote a $250 check to Steele's committee in September 2004, said he did not give to Steele to reciprocate for the money received by the Urban League.

"I believe in good government," he said. "He was a good lieutenant governor."

Nikita Haysbert agreed. "I think we were trying to support Michael Steele in his election aspirations," she said.

She said she had no knowledge of the grants to the Urban League or to the Coppin State University Development Foundation, on whose board she sat in 2004.

Two other members of the Urban League board of directors also gave money to Steele. David Dalton, a medical doctor, gave $1,000 in January 2004, and Cornelius May, a real estate professional, gave $1,200 in 2004.

An Oxon Hill company owned by Mike Little, a Bowie State University Foundation board member, contributed $2,000 to Steele's campaign committee in January 2004.

Little said his company's gift was unrelated to Steele's efforts to give Bowie the settlement money. The fact that Little's check to Steele was received Jan. 13, the day after the award letter went to Bowie, was mere coincidence, he said.

"Certainly no one has ever approached me as if there were any quid pro quo related to Bowie," Little said.

Agreeing to enter the race for Senate to replace retiring Democrat Paul S. Sarbanes, Steele is an integral part of the national GOP's efforts to appear more inclusive to racial and ethnic minorities. He is receiving national attention as he runs for Congress.

Because of differences in federal and state fundraising laws, Steele cannot use funds from his state account for his Senate bid. The state fund contained $608,572 as of January 2006.

While the vast majority of African-Americans in Maryland are Democrats, Steele has a rare opportunity as lieutenant governor to show the black community how a Republican-controlled government can help their interests.

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