Businessman tied to Ehrlich gets Md. grant

Port-study funds go to head of purified-water company

December 02, 2006|By Michael Dresser | Michael Dresser,Sun reporter

The Ehrlich administration, bypassing the agency that runs the Port of Baltimore, has awarded a grant of up to $500,000 for a study of the port's future to a company controlled by a politically well-connected businessman with no maritime experience.

The award to US Ports Management Group, a fledgling firm incorporated in March, was made shortly before the November election. It came through a program that allows the state Department of Business and Economic Development to give money to companies without the public review needed for other state contracts or grants of similar size.

US Ports Management operates out of the northern Baltimore County home of Stuart R. Amos, a donor to Gov. Robert L. Ehrlich Jr. and a social acquaintance of Economic Development Secretary Aris Melissaratos.

The purpose of the grant -- money from which has yet to be disbursed -- was to help the fledgling Maryland firm as it attempted to acquire the U.S. assets of a company controlled by the Middle Eastern nation of Dubai, Melissaratos said.

Melissaratos said he was approached by the organizers of US Ports, whom he described as a "who's who" of Maryland business leaders interested in raising money to buy the American assets of the Dubai-controlled company, Peninsular & Oriental Ports.

P&O runs the stevedoring operations in Baltimore and almost two dozen other American ports.

"They wanted the state of Maryland to help them create that company," Melissaratos said, adding that it is part of his job to help companies grow.

A spokesman for the governor's office did not return a call for comment yesterday.

But according to those familiar with the bidding process, the Maryland group was eliminated from the Dubai deal months ago, well before the grant was awarded.

Amos, 60, the chairman and sole board member, is the chief executive of Fillmaster, a Baltimore County company that supplies purified water to pharmacies. In an interview, he said he had no experience in the maritime industry -- although the company has enlisted some high-profile and seasoned participation.

Advisors include Tom Ridge, the former secretary of homeland security; and retired Adm. Thomas H. Collins, a former Coast Guard commandant who said he was "on the sidelines at this point" but is "prepared to participate when asked."

Amos said he and his wife, Suzanne, see Melissaratos "frequently" on a social basis, adding that he and the secretary are active in fundraising for cystic fibrosis. He said he met with the secretary and made the case that "this would be good for Baltimore and good for Maryland."

Ehrlich has appointed Suzanne Amos to the Maryland Aviation Commission and the Maryland Arts Council. Amos, his wife and another company that he controls gave a total of nearly $11,000 to the re-election effort of Ehrlich and his running mate, Kristen Cox.

Melissaratos said Amos has no better relations with government than other business executives. "The entire business community is well connected," he said.

The grant required the approval of a local government, which Melissaratos' agency got by side-stepping Baltimore -- where the port is located -- and dangling the prospect of a new corporate headquarters before the Anne Arundel County Council.

A description of the study given to the Arundel council said it would "analyze, among other things, the possibility of developing the port of Baltimore into the nation's model port for security and efficiency."

The grant will pay for 70 percent of the study's cost, up to a maximum of $500,000, with the company providing the rest.

The contract is being viewed skeptically by the incoming administration of Gov.-elect Martin O'Malley.

"This is very troubling. It's hard to see what, if anything, taxpayers are getting for their money," said O'Malley spokesman Steve Kearney.

Transportation Secretary Robert L. Flanagan and port Administrator F. Brooks Royster III said DBED did not meet with them about launching a study of the port's future.

Flanagan said any re-examination of the port's business model needs to take place "in full consultation with the Maryland Port Administration."

"We don't know what this is all about," said Flanagan, whose testy relations with Melissaratos have long been an open secret in Annapolis.

Melissaratos said he decided not to involve Transportation Department or MPA officials in the study because they might ultimately have to choose which company they contracted with to handle port operations. That, he said, could create a conflict of interest.

"It's my responsibility to create new companies. It's their responsibility to run the port," he said.

The new Maryland company was formed after P&O agreed to sell its U.S. assets in the wake of a political storm that erupted this year over its acquisition by DP World, which is controlled by the government of Dubai in the United Arab Emirates. Opponents of the acquisition raised concerns that putting control of U.S. ports in the hands of an Arab-led group could harm the nation's security.

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