IWIF cutting ties to leader

Former Sen. Bromwell will receive $400,000 to to quit before his trial on corruption charges

December 27, 2006|By John Fritze | John Fritze,Sun reporter

Maryland's largest insurance fund for injured employees has severed ties with its embattled leader, agreeing to pay former state Sen. Thomas L. Bromwell $400,000 to step down before his trial on federal corruption charges.

Bromwell, a Baltimore County Democrat, also will receive 18 months of health insurance coverage and the option to buy his company car at market value under a separation agreement announced yesterday by the Injured Workers' Insurance Fund, which Bromwell has overseen as president and CEO since 2002.

The agency's nine-member board decided to seek a break with Bromwell at a meeting early last week after members learned that he was to be tried in March in a bid-rigging scheme that triggered one of the state's largest public corruption investigations.

"We knew that he was going to need several months of preparation and that he would be in court at least three months," said Daniel E. McKew, chairman of the agency's board. "It was a good time to approach him with a separation agreement. ... We both agreed that this was the best thing at this time."

According to a statement released yesterday by the board, the separation will take effect Sunday. McKew will serve as interim president until a replacement is found. Though IWIF is a quasi-government agency - its board members are appointed by the governor - Bromwell's salary is not paid through taxes.

McKew said a search committee has been formed to replace Bromwell but has not met. House Speaker Michael E. Busch interviewed for the job in 2000, but he said last night that he is not pursuing the job now that it is open again.

McKew said the language of the separation agreement, including the clause that guarantees Bromwell two years' salary, was negotiated before he was hired. The board could have terminated the agreement without paying the salary if Bromwell were found guilty, but McKew said the board did not want to wait months for an outcome in the case.

Preston D. Williams was hired to lead the agency in late 2000. When he left, Williams received about 15 months' pay - about $220,000 - under the terms of his severance agreement, according to records released to The Sun at the time. McKew said that negotiation led the board to develop a separation agreement that now applies to anyone who takes the job.

"The negotiation was lengthy," he said. "The board chose subsequently to put a separation agreement in place."

Sen. Thomas M. Middleton, the Charles County Democrat who leads the Senate Finance Committee that Bromwell once oversaw, said his "heart bleeds" for Bromwell and his family but that the board probably did what it had to do to ensure the stability of the agency, which manages $1.3 billion in assets and reserves.

"Given all the turmoil that's surrounding the executive director now, it was probably an appropriate move," Middleton said, adding that he thinks the organization will remain stable. "When you look at the people that are the everyday managers of IWIF, they're very, very capable people."

The Injured Workers' Insurance Fund insures one-third of Maryland businesses and employees - as well as 67,000 state and local government employees - against the cost of workplace injuries. At least one public-interest group, Common Cause Maryland, called for Bromwell's resignation after he was indicted in 2005.

Bromwell's attorney, Robert Schulman, did not return a phone call yesterday.

A federal grand jury indicted Bromwell on charges of accepting bribes from an official at a local construction firm, Poole and Kent Co., which was vying for millions of dollars worth of state contracts. The indictment - which also charges his wife, Mary Pat, and former Poole and Kent President W. David Stoffregen - alleges a complex scheme that abused a system of incentives used to benefit minority-owned firms.

Federal prosecutors say that while he was in the Senate, Bromwell steered millions of dollars in state contracts to Poole and Kent at Stoffregen's request. In return, they say, Mary Pat Bromwell received a salary for a fake job with a female-owned subcontractor controlled by Stoffregen. Stoffregen also arranged for Poole and Kent to do more than $85,000 worth of work on Bromwell's house largely for free, court papers show.

The Bromwells pleaded not guilty, and a trial is scheduled to begin in March and could last three months. Stoffregen pleaded guilty to racketeering conspiracy and mail fraud late last month. As part of a plea agreement, Stoffregen said he will cooperate against Bromwell.

A spokeswoman for the U.S. attorney's office declined to comment yesterday.

Bromwell served 19 years in the Senate and four years in the House of Delegates. He was the chairman of the Senate Finance Committee until he left the General Assembly in 2002.

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