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Accountabilityby Mark Reutter1:17 pmMar 18, 20140

Beatty lavished funds on mayor and City Council as they lavished tax credits on Harbor Point

PART 1: Neither the mayor nor the City Council members who received Beatty’s cash publicly disclosed the contributions during the $107 million TIF debate

Above: Of the six elected officials in this picture, five accepted campaign cash from developer Michael Beatty. Any guesses? (Mark Reutter)

Should it be called back scratching, quid pro quo or simply business-as-usual at City Hall?

Recently-released campaign reports reviewed by The Brew show that Michael Beatty, developer of Harbor Point, contributed $5,750 last year to his City Council allies – while his wife, his late father’s architecture firm, his development company and his general contractor paid $16,000 into Mayor Stephanie Rawlings-Blake’s campaign kitty.

What makes this significant? The contributions came during a time when Beatty was actively pushing for approval of a $107 million TIF tax credit from the city.

Neither the mayor – nor any of the City Council members who received Beatty’s cash – publicly disclosed the contributions during or after the long and heated debate over the tax financing subsidy.
PART 2: Councilmen say why they accepted donations from developer Beatty

Beatty and his wife live in Baltimore County. Until last year, they never made contributions to City Council members or the mayor. (The Beattys did contribute to Martin O’Malley’s first run for governor in 2006 as well as to Baltimore City State’s Attorney Gregg S. Bernstein.)

“He’s not spending his money on elected officials in his own jurisdiction. This indicates to me that his spending is strictly a business proposition,” said Jennifer Began-Dangel, executive director of Common Cause Maryland.

In the case of Harbor Point, Beatty initiated an aggressive campaign to win the TIF tax credit over the objections of Carl Stokes, chairman of the Council’s Taxation, Finance and Economic Development Committee. (Stokes was not one of the nine Council members to receive Beatty dough.)

From left: Councilman William

On the night that he won the $107 million TIF subsidy, Michael Beatty was ushered into the mayor’s conference room for photographs with elected officials. From left: Councilman William “Pete” Welch ($500 from Harbor Point Development Group), Councilman Warren Branch ($500 from Beatty Development Group), Council President Jack Young ($2,000 from Beatty Development Group), Rod Easter, a labor leader, Michael Beatty at the podium, Mayor Stephanie Rawlings-Blake ($16,000 from Beatty and allies), Councilwoman Helen Holton, partly obscured ($250 from Beatty Development Group), and Councilwoman Rochelle “Rikki” Spector ($0).

Bevan-Dangel said her good-government group has pushed for “black-out” periods where elected officials cannot solicit or receive funds from developers seeking zoning, tax or other privileges for their projects.

“Unfortunately in Maryland, money buys access and developers tend to invest the heaviest in campaign contributions because they yield the best return on their investment,” she said in an interview with The Brew.

Lobbyists, Too

Beatty’s efforts included the hiring of two politically-connected lobbyists, Ryan J. Potter and John A. Pica Jr., a former Baltimore state senator.

City disclosure records show that Potter, a partner at the Gallagher, Evelius & Jones law firm, was paid $20,722 by the Beatty group to lobby the City Council on behalf of the TIF tax credit. Pica got $1,500 for his lobbying, which was limited to the final passage of the legislation.

In addition, Beatty hired KO Public Affairs headed by ex-O’Malley spokesman Stephen Kearney and Damian O’Doherty, brother of former Rawlings-Blake spokesman Ryan O’Doherty.

Calling itself a “strategic communications firm,” KO does not file lobbying registration and disclosure reports to Baltimore’s Ethics Board or to the Maryland Board of Elections.

Sequence of Cash and Legislation

Here’s the sequence of events that yielded the $107 million public subsidy for Beatty:

• In March 2013, a month when many Councilmen hold fundraisers, the Beatty group and/or Beatty individually contributed the following:

– $1,000 to City Council President Bernard C. “Jack” Young.
– $1,000 to 1st District Councilman James B. Kraft (whose district includes the Harbor Point site).
– $500 to 10th District Councilman Edward Reisinger ($500 was also contributed by Stephen Kearney).
– $500 to 13th District Councilman Warren Branch.
– $250 to 7th District Councilman Nick Mosby.
– $250 to 11th District Councilman William H. Cole IV.

• On March 28, 2013, during a closed voting session, the Baltimore Development Corp. (BDC) recommended to the mayor $107 million in tax credit finance bonds to pay for public infrastructure at Beatty’s proposed waterfront complex.

• Between April 18 and 23, the following contributions were made to the “Stephanie Rawlings-Blake For Baltimore” campaign committee:

– $4,000 from Nathalie C. Beatty, the developer’s wife. ($4,000 constitutes the maximum individual contribution allowed by Maryland law during the four-year election cycle.)
– $4,000 from Beatty, Harvey, Coco, Beatty’s late father’s New York architecture firm, which is listed as the “architect of record” of Harbor Point.
– $4,000 from Armada Hoffler, listed as general contractor of Harbor Point. The Virginia-based contractor constructed all of the buildings in Harbor East, which was developed by Beatty and H&S bakery mogul John Paterakis.
– $4,000 from Beatty Development Group, owned by Michael Beatty after he split from Paterakis.

• On April 29, lobbyist Ryan Potter contributed $1,000 to Rawlings-Blake campaign.

• On June 3, Mayor Rawlings-Blake announced the introduction of legislation in the City Council that would establish a special taxing district for Harbor Point and create a special fund to divert property tax revenues from the treasury to the payment of city TIF bonds to build streets, parks and other infrastructure at Harbor Point.

In a June 3 press release, the mayor announces introduction of Harbor Point TIF legislation to the City Council. (Mayor's Office)

In a June 3 press release, the mayor announces introduction of Harbor Point TIF legislation to the City Council. (Mayor’s Office)

• On June 6, Mayor Rawlings-Blake, Council President Young, BDC President Brenda McKenzie and others hold a press conference with developer Beatty.

The mayor lauded the job creation and other benefits of the $1 billion development anchored by the proposed Exelon Tower.

KO Public Affairs coordinated the visuals and message by Beatty and others.

Councilman Reisinger confers with Michael Beatty before the start of the August 7 committee hearing where the TIF legislation was

Councilman Reisinger confers with Michael Beatty before the August 7 Council hearing where the TIF legislation was “hijacked” by pro-Beatty forces, according to Chairman Carl Stokes. (Photo by Mark Reutter)

• On June 15, Beatty contributed $250 to 8th District Councilwoman Helen Holton, chair of the Budget and Appropriations Committee.

• In July, two public hearings before the Taxation Committee give voice to critics of the TIF tax deal and calls for a “giveback” by Beatty to low-income Perkins Home public housing residents near the site.

• On August 7, Councilmen Reisinger, Branch and Cole, forming a majority of the Taxation Committee, override Stokes and vote to move the TIF bill out of committee. Stokes stormed out of the room in protest of his committee being “hijacked” by pro-Beatty forces.

• On August 12, the full Council suspended its rules and votes to approve the TIF subsidy on second reader without the written approval of Committee Chairman Stokes.

The vote is 12 in favor, two opposed (Stokes and 6th District Councilwoman Sharon Green Middleton) and one abstention (14th District Councilwoman Mary Pat Clarke).

[NOTE: Last summer, KO Public Affairs leaked to the media that Stokes was in the “pocket” of lawyer and Baltimore Orioles owner Peter Angelos, who opposed Harbor Point, KO said, in order to protect his downtown real estate interests. The Stokes campaign report discloses no campaign contributions in 2013 from Angelos, his real estate entities or his close associates.]

• On September 9, the full Council approved the $107 million Harbor Point TIF. Beatty joins Rawlings-Blake and other Council supporters for a press conference in the mayor’s offices.

• On September 19, 9th District Councilman William “Pete” Welch reported a $500 campaign contribution from Harbor Point Development Group, a wholly-owned subsidiary of the Beatty group.

• On November 15, Second District Councilman Brandon S. Scott reported a $500 campaign contribution from Harbor Point Development Group.

• On December 2, Council President Jack Young reported a $1,000 contribution from Beatty Development Group.

• On January 8, Young and Rawlings-Blake give final approval of the $107 million TIF credit as members of the Board of Estimates. The panel’s third elected official, Comptroller Joan Pratt, votes against the deal, saying she needs more information. (Pratt’s campaign committee did not report any Beatty donations in 2013).

REACTION: We asked the elected officials who received Beatty contributions to comment on this article, specifically if the contributions influenced their support of the project and the TIF tax increment, and whether they saw anything wrong with elected officials accepting donations from a developer while his project is “in play.”

Michael Beatty listens to vote of Board of Estimates on January 8 giving final approval of the TIF tax credit. To his left is BDC president Brenda McKenzie; to Beatty's right is his associate Marco Greenberg and (holding papers) his lawyer, Ryan Potter. (Photo by Mark Reutter)

Michael Beatty attends the Board of Estimates meeting on January 8 when it gave final approval of the TIF tax credit. To his right is BDC President Brenda McKenzie; to his left, Harbor Point associate Marco Greenberg and lawyer Ryan Potter. (Photo by Mark Reutter)

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