Maryland - legislators' links to nonprofits, funded by the state, not routinely disclosed

Adapted from Baltimore Sun, by Steve Schulin, Maryland Independent Party

Nonprofit organizations get tens of millions of dollars every year from Maryland taxpayers. Competition for such funding is keen. In an annual ritual, lawmakers convened in Annapolis on a Saturday this month to hold rapid-fire hearings on bond bills. The hearings give potential recipients an opportunity to plead their case, but because there are so many of them, staffers limit their testimony by flipping the pages of a chart showing a countdown of how many minutes they have remaining. As Charlotte Sommers, executive director of one of the groups told Baltimore Sun reporter, "...it always helps to have a state senator on your side".

Del. Hattie N. Harrison (D-Baltimore) is president of the Historic East Baltimore Community Action Coalition, a nonprofit group. Her son, Philip, is employed as a counselor there. She has requested $75,000 from the state of Maryland for a project the group is involved in -- an affordable housing development.

Sen. Robert J. Garagiola (D-Montgomery) sits on the Board on the BlackRock Center for the Arts, a theater and teaching venue. His daughter takes jazz classes there. He wants as much as $250,000 from the state of Maryland to expand the center. This is the group that Ms. Sommers heads.

Del. Jolene Ivey (D-Prince George's) serves on the board of a proposed African-American history museum. She wants a quarter-of-a-million-dollars from the state of Maryland for the museum.

The lead story in today's Baltimore Sun highlights these kinds of projects, describing a "system of patronage", where capital projects are financed with debt issued through bonds by the state and repaid by taxpayers. Last year's budget included approximately $25-million of bond funding of organizations. This year's proposed budget represents a $10-million cut from that pace.

"There is no transparency in the process," said Christopher Summers, president of the Maryland Public Policy Institute. The conservative-leaning think tank has researched connections between lawmakers and bond bill recipients. Disclosure of lawmaker relationships with organizations seeking state bond money is spotty. The legislature's ethics counsel, William G. Somerville, said that lawmakers, in the interest of full disclosure, should report the potential conflicts on forms kept by his office, but few lawmakers do so.

Several lawmakers who did not file ethics disclosures said they are not concealing their involvement and disputed any conflict, real or perceived.

"I'm not hiding nothing, and I get nothing out of the organization," said Sen. George C. Edwards, a Western Maryland Republican who has helped secure bond financing of nearly $745,000 for Adventure Sports Center since 2005. Edwards is chairman of the board of the Garrett County nonprofit, which operates a 1,700-foot artificial whitewater course atop Marsh Mountain.

Edwards has also sponsored bills to give tax breaks to the organization. He said he makes no secret of the affiliation but has not disclosed his unpaid position on legislators' ethics forms. "You don't remember to disclose everything," he said. "I probably overlooked it."

Garagiola did disclose his relationship with the BlackRock arts center in ethics forms. "I am in the Senate to do some good in the community, and the reason I am on this board is to do some good in the community," Garagiola said, adding that he believes it is a worthy project that deserves funding.

Ivey, who didn't make disclosures related to bond bills, also helped secure $200,000 last year for the Family Crisis Center for victims of domestic violence, where she serves on the advisory council. She said she doesn't see a conflict because she was not paid for her work with the nonprofits, and compared her situation to a lawmaker who volunteers at his or her child's school and then advocates for public education in Annapolis.

"We're elected because we're involved, so obviously we're connected to groups that want bond bill funding," she said.

Harrison, who also chairs the board of directors at the Historic East Baltimore Community Action Coalition, hasn't disclosed the relationship on ethics forms but says that "everybody knows" she helps run the group and that her son is a paid employee. The state money she funnels there "is to help the program, not to help him," she said. Asked whether she is paid for her service, the lawmaker said, "Oh, heavens to Betsy, no."

"Everything we sponsor is used to help the community," she added. "No personal money goes to anyone."

Competition for funding is fierce this year; lawmakers have filed requests for about twice the amount set aside.

Committees are expected to pick the projects to include in the capital budget this week. Some said nonprofits tap lawmakers for board seats precisely because of their influence on the state budget process. Sen. David R. Brinkley, a Frederick County Republican on the Budget and Taxation Committee, which has purview over bond bills, said that's a "tactic" for organizations seeking funding.

"It's very much to your advantage," he said. "It gives you access."

Legislative leaders have said their decisions will be guided by input from lawmakers who have been asked to prioritize funding requests in each county. They also are borrowing from President Barack Obama's strategy for distributing stimulus money by giving priority to "shovel-ready" projects that could begin construction within 18 months and that would create the most jobs.

Some lawmakers have argued that bond bills shouldn't be approved this year - even as they themselves sponsor such legislation.

Sen. Thomas M. Middleton, a Charles County Democrat and Finance Committee chairman, said he had argued against funding projects this year, especially in light of the national debate about federal earmarks. But he was overruled, and he has gone forward with a bond bill for $250,000 to build a residential hospice house. His assistant sits on the nonprofit's board.

House Minority Leader Anthony J. O'Donnell, a Southern Maryland Republican, also asked legislative leaders to forgo bond bills this year, arguing that the legislation increases the state's capital debt service, which is paid for through property tax revenue and the state's strapped operating budget. He and Del. Christopher B. Shank, the minority whip from Washington County, have made a symbolic point of not submitting requests this year.

"We have all sponsored and advocated for these bills in the past," O'Donnell wrote to House Speaker Michael E. Busch recently. "However these are extraordinary economic times, and difficult choices must be made."

Del. Dana M. Stein (D-Baltimore County) has been a recipient of such funding as the executive director of Civic Works, an AmeriCorps service organization. Between stints as a lawmaker - he was appointed to finish a departing member's term for six months until 2003 and then was elected in 2006 - Stein appeared before lawmakers asking for $100,000 to renovate several floors and the grand staircase of the historic Clifton Mansion, where his nonprofit has offices.

Stein co-sponsored a bond bill this year to direct $500,000 to the Associated Jewish Charities for an electric generator at the Owings Mills Jewish Community Center emergency shelter. Stein was on the board of the group's lobbying and community relations affiliate, but stepped down in 2006.

Del. Kriselda Valderrama, a Prince George's County Democrat, helped secure $100,000 for the National Philippine Cultural Foundation in 2007. She lists membership in the organization in the state directory, and her father, former Del. David Valderrama, is included on its 2006 tax return as the honorary chairman, who was paid $4,000 for fundraising.

When he was in office, David Valderrama sponsored bills in 2000 and 2001 for the foundation to help build a National Philippine Cultural Center. He said in an interview that he did not recall being compensated and assumed the payment was a reimbursement for expenses.

Kriselda Valderrama did not file a disclosure form but said, "I believe I was in contact with the ethics office" when she sponsored her legislation.

Because Maryland's legislature is part-time, lawmakers frequently become involved in issues related to their work outside the State House. Ethics rules allow lawmakers to fully participate in the legislative process in most situations where potential conflicts exist as long as their interests are disclosed.

Somerville, the ethics counsel, said in situations where lawmakers are affiliated in an unpaid capacity with organizations asking for bond funding, there is the appearance of a conflict and he strongly recommends that they file forms to disclose the relationship. If a family member is involved, he would encourage lawmakers to file a form. If lawmakers fail to follow his advice, Somerville said, they could be contacted and asked to file a form retroactively.

Sen. Ulysses Currie (D-Prince George's, and chair of the Budget and Taxation Committee) sponsored legislation to direct $300,000 to the Washington DC-based charity, Capital Area Food Bank, which distributes food to the needy in the region. The charity, where Currie sits on the board, is trying to raise more than $35 million for a new building - its current facility is turning away donations because there's no room. Currie didn't file a form to disclose the relationship, but he said recently: "If Somerville thinks we should do that, I'll do that."

[Ref: Laura Smitherman and Gadi Dechter, " Patronage endures, even in hard times | Lawmakers look to steer cash to nonprofits they run", The Baltimore Sun, March 22, 2009, pp. 1, 23]