Deal adds a twist to Dixon probe

Sister's firm was subcontractor on project backed by council president

April 16, 2006|By DOUG DONOVAN | DOUG DONOVAN,SUN REPORTER

Baltimore City Council President Sheila Dixon has acknowledged that she "twisted some arms" to secure city land, money and tax relief for the developers of an east-side housing complex known as Frankford Estates.

Even as federal investigators probed her relationship with a Frankford developer, Dixon in June 2004 defended her support of a project that she said was good for the city because it brought market-rate homes to a depressed area of East Baltimore.

She did not disclose the deal was also good for a minority subcontractor on the project -- Union Technologies LLC, also known as Utech -- that had hired her sister Janice as a full-time manager in February 2004 after several months of part-time employment.

The City Council president shepherded a series of bills to help Frankford Estates through the council in May 2003, records show. In December 2003, the project's co-developer, Doracon Contracting Inc., hired Utech to perform "all electrical work" under a $344,000 contract.

But Utech, rather than doing the job itself, hired its own electrical subcontractor in April 2004 to do the bulk of the work, according to court records obtained by The Sun.

The city's minority subcontracting ordinance states that prime contractors, like Doracon, cannot count a subcontractor toward meeting minority participation goals if more than 10 percent of the deal is passed to another company. The subcontractor also does not count if it cannot perform "real and distinct work for which the [subcontractor] has the skill, expertise and actual responsibility to perform."

Utech's arrangement with Doracon adds a previously unknown element to concerns about the council president's official conduct regarding Utech and her sister, who is also Dixon's longtime campaign treasurer.

Last month, the Maryland state prosecutor subpoenaed records from city agencies concerning $101,000 Utech earned from Baltimore's cable television provider, Comcast, and nearly $1 million it received from City Hall's computer network manager, TeleCommunications Systems Inc. of Annapolis. Both firms have received state subpoenas related to Utech.

Dixon voted and participated in meetings that led to the award of both contracts without disclosing her sister's Utech job. City ethics rules require officials to abstain from matters that benefit relatives and to disclose family members' conflicting employment.

Dixon would not comment on the Frankford Estates deal. Her chief of staff, Beatrice Tripps, said the office would not discuss the matter while the state is investigating the city contracts.

Details of electrical contracting at Frankford Estates appear in a lawsuit in Baltimore Circuit Court filed by Daniel Gonzalez, president of Aggadan Electric, which Utech hired April 1, 2004. The company worked until January 2005 and filed the suit two months later.

Gonzalez alleged that he had done $448,402 worth of work on the contract but had been paid $315,000.

Gonzalez withdrew the suit in August because, he said, he felt he could not prevail over the political influence of Doracon and Utech.

"They target the small guys who are hungry," Gonzalez said. "They know they can take advantage of the small guy because they can't do anything to the big companies."

In court filings, Doracon lawyers and Mildred E. Boyer, the president of Utech, confirmed the subcontracting arrangement with Aggadan and also acknowledged payments that indicate the firm had done far more than 10 percent of the work on the project -- the ceiling for a pass-through contract.

The records also disclose that the cost of the electrical work had increased significantly.

Doracon and Boyer disputed that Aggadan had not been fully paid, asserting that Aggadan did not honor the contract. In an affidavit, Boyer said she paid Aggadan $380,014 and that she retained an additional $35,657 as part of security on the contract. She also said that Gonzalez did not perform work that cost Utech $289,530.

Thomas B. Corey, chief of the city's minority business office, said the project is subject to the subcontracting law and Utech was an approved minority subcontractor for Frankford Estates.

"If after investigation we find that Utech has subcontracted more than 10 percent of its work, ... those dollars cannot be counted toward achieving the [minority] participation goals on the project," Corey wrote in an e-mail to The Sun last week.

Gonzalez said Utech retained him on a mutual friend's referral because neither Boyer nor Janice Dixon could do the work themselves.

"Utech had no employees who were master electricians," said Gonzalez, who is a master electrician certified by the state of Maryland.

Boyer, who served in the administration of Mayor Kurt L. Schmoke, could not be reached for comment. Janice Dixon also could not be reached.

Utech's Web site -- which names Boyer and Janice Dixon as the firm's two contacts -- has listed "master electrician" under its "certifications."

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