Tuesday, September 29, 2009

How Far Will Baltimore’s Corruption Scandal Go?

Developer Ronald Holt Lipscomb, whose alleged showering of gifts on Baltimore Mayor Sheila Dixon led to her indictment, is now cooperating with State Prosecutor Robert A. Rohrbaugh. That’s not just bad news for Dixon. It’s also potentially bad news for many other politicians too.

The state’s case against Dixon revolves around the provision by Lipscomb and fellow developer Patrick Turner of gift cards that were supposed to be used for needy city residents, but were instead used by Dixon for herself while she was City Council President. The state issued a twelve count indictment in January alleging that Dixon had committed perjury, theft, fraudulent misappropriation by a fiduciary and misconduct in office. After Lipscomb agreed to squeal in June, the state withdrew the original indictment and issued a new seven count indictment in July alleging theft, fraudulent misappropriation by a fiduciary and misconduct in office.

Whatever happens to Dixon, the state scored a coup by flipping Ronald Lipscomb. The 53-year-old owner of Doracon Contracting Inc. was one of the most influential minority contractors in the state at his peak. The best thing about cooperating witnesses is that they do not get to pick and choose which matters they discuss with prosecutors. Remember how the Jack Abramoff investigation eventually led to Congressman Bob Ney?

Lipscomb has many, many relationships other than his connection to Mayor Dixon. Prosecutors claim to know of 57 Lipscomb-connected LLCs. We have not been able to locate that many, but we have traced fifteen business entities and five individuals to Lipscomb’s residential and business addresses. They are:

301 E. Lombard Street LLC
6th Street LLC
Arizona Crossings LLC
Dart Consulting LLC
Doracon Contracting
Doracon Contracting of D.C.
Doracon Development
Doracon Development of Puerto Rico
Lambda Development LLC
RHL Arizona Crossings LLC
RHL Development LLC
RHL Strathdale LLC
RHL Waterview Avenue LLC
RT Ventures LLC
Street LLC
Dennis Cullop (a Doracon Vice-President)
Sharon R. Grinnell
Michael E. Herndon
Ronald H. Lipscomb
Zaiafanice J. Lipscomb

The above businesses and individuals contributed a combined $500,988 to state politicians. Here are all candidates and political funds that received at least $5,000.

A few notes. Helen Holton is a Baltimore City Council Member who was also indicted in connection with Lipscomb. Bernard Young is another Baltimore City Council Member. Talmadge Branch is a Baltimore City Delegate who is the Majority Whip in the House. Verna Jones and Nathaniel McFadden are Senators from Baltimore City. Delegate Pete Rawlings of Baltimore City chaired the House Appropriations Committee before passing away in 2003. The other list members should be familiar to our readers.

Branch’s presence on this list is interesting. In July 2008, the Baltimore City Paper wrote about his participation in two 2007 meetings at a Catonsville Diner with Lipscomb, Mayor Dixon and two businessmen who were the subject of state and federal investigations. Both of these businessmen – Brian D. Morris and Owen M. Tonkins – served as former Baltimore Mayor Martin O’Malley’s minority-business chiefs. Lipscomb was playing an ancient game popular in both Baltimore City and his resident county, Prince George’s, of seeding state and local politicians with money, plugging into networks of current and former bureaucrats and keeping the kettle warm for public contracts. In Lipscomb’s case, the kettle was VERY warm due to his $205,000 in contributions to the state Democratic Party.

The core of the Dixon indictment is that the Mayor became too close to her contributor, in many more ways than just the financial ones. Anyone who contributes tens of thousands of dollars to state and local politicians, and possibly raises tens of thousands more, has plenty of opportunity to get close to them. Who else was Lipscomb close to and how far did it go? Prosecutors will find out by asking questions about every name on the above list. One person not on the list, Delegate Jill Carter (D-41), may already have a Lipscomb-related problem.

As bad as Lipscomb’s cooperation is, there is something even worse on the horizon. Lipscomb is helping prosecutors in their indictment of Baltimore City Council Member Helen Holton, whom they allege accepted an off-the-books election poll financed by Lipscomb and John Paterakis. Paterakis, who was also indicted, is a MUCH more powerful figure than Lipscomb. He is the developer of Baltimore’s Inner Harbor East project, the largest private project in the city’s history, and has been described by the Sun as former Mayor William Donald Schaefer’s “go-to guy.” He was also linked to the massive Bromwell scandal. Paterakis just pleaded guilty to two counts of violating campaign finance rules and agreed to pay $26,000 in fines. Is he now also cooperating with prosecutors?

Only three people may know where as many bodies are buried in Baltimore as does Paterakis: Sheila Dixon, Martin O’Malley and God. So far, only one of them has been indicted.