Council member, developer indicted

State prosecutor alleges Holton accepted bribe to get tax breaks for Lipscomb

January 08, 2009|By Annie Linskey and Julie Bykowicz | Annie Linskey and Julie Bykowicz, and

A Baltimore grand jury indicted a city councilwoman and a developer with close ties to Mayor Sheila Dixon yesterday on bribery charges related to tax breaks for luxury buildings under construction on the city waterfront.

The indictments of Councilwoman Helen L. Holton and developer Ronald H. Lipscomb are the most prominent charges to emerge to date from a wide-ranging probe by the Maryland state prosecutor into corruption at City Hall, an investigation that included a search of the mayor's home last summer.

Prosecutors say Holton, head of a committee that oversees tax incentives, approved breaks worth millions of dollars for projects involving Lipscomb at Inner Harbor East, after he paid $12,500 for a political survey for Holton last year.

Holton, first elected in 1995, was also charged with perjury, for failing to include the payment on her annual financial disclosure statement, and with misusing her office. In a statement issued by her lawyers, she said she was "disappointed" by the grand jury's decision and would continue in office while legal proceedings continue.

The development stunned City Council members, who have been in recess for the past month, and fueled speculation that the nearly three-year investigation might be reaching its climax. The current grand jury expires tomorrow. To date the probe has seemed to focus on contracts and hearings held by Dixon while she was president of the City Council and on her relationship with Lipscomb.

"The public's trust in their elected officials is essential to the proper functioning of government," State Prosecutor Robert A. Rohrbaugh said in a statement that accompanied the two indictments. "The citizens of Baltimore have every right to expect their public officials will not be influenced by personal motives, greed or gain."

In her 2007 financial disclosure statement, Holton, a West Baltimore Democrat, said she received gifts from "various" sources related to "events for which all council members were invited."

In those forms, which Holton signed under penalty of perjury, she "failed to disclose the payments Lipscomb allegedly made on her behalf" to the polling company, according to the state prosecutor's office.

Dixon and her attorneys declined to comment on the developments.

It is highly unusual for City Council members to commission polls for their races, elected officials said. Holton faced nominal competition for her council seat in 2007 but was considering a run for comptroller if current Comptroller Joan M. Pratt ran for mayor.

Lipscomb's name has long been connected with the probe as well as an earlier federal investigation. He dated Dixon when she was City Council president in late 2003 and early 2004, and other projects he has worked on have received millions of dollars in city tax breaks.

Lipscomb's East Baltimore offices were searched by the state prosecutor's office in November 2007. The prosecutor wrote at that time: "Your affiants believe that a corrupt relationship exists between City Council President Sheila Dixon, developer Ronald Lipscomb, and Dennis Cullop." Cullop works for Lipscomb's company, Doracon Contracting.

Gerard Martin, an attorney for Lipscomb, said in an e-mail: "Mr. Lipscomb is innocent and wants to tell everyone that but we, as his lawyers have instructed him to defend himself at his trial and not in the press."

Other allies of the developer were more blunt. Former City Councilman Anthony J. Ambridge, who works with Lipscomb, said: "He pays for a poll. Why is that illegal?"

"It's a bull crap indictment," Ambridge said. He called the state prosecutor "a guy trying to save face on millions of dollars he wasted" during the lengthy probe.

All of the charges against Holton and Lipscomb are misdemeanors.

Holton cannot be removed from office unless she is convicted of a felony or of a misdemeanor that relates to her elected office.

City politicians reached by phone yesterday expressed shock. "Oh, my goodness," said Pratt. "That is terrible. That is not good."

Stephanie C. Rawlings-Blake, the City Council president, said in a statement that she was "deeply troubled" by the charges but was reserving judgment.

Councilman Bill Henry, who has sparred with Holton over tax breaks for developers, said he hopes "for the sake of my colleague and her family that this is not as bad as it looks right now." Henry said he expected the charges to be a distraction for the council.

Bribery charges are tricky to prosecute, said Byron L. Warnken, a law professor at the University of Baltimore. "Bribery is when you have a public official and you have a quid pro quo," Warnken said. "You are making that offer to someone in a public office because they have the power." But it is hard to establish the parties' mental state, he said: "Usually we have to infer it."

The charges against Holton stem from two tax credits awarded to the Inner Harbor East project while she headed economic development committees.

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