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Politicsby Fern Shen5:06 pmJan 23, 20170

Prosecutor: Jim Smith slate’s loan to Pugh campaign “unlawful”

Civil citation for $100,000 loan stems from “a misunderstanding,” Pugh’s campaign treasurer says

Above: Jim Smith, Mayor Catherine Pugh’s chief of strategic alliances, at the City Council swearing-in ceremony last month. (Fern Shen)

A last-minute $100,000 loan for Catherine Pugh’s mayoral campaign arranged by former Baltimore County Executive James T. Smith Jr. may have helped Pugh get over the finish line in the April primary but, according to the Maryland State Prosecutor, it also violated state law.

As first reported by The Brew in June, the Baltimore County Victory Slate, which is funded by Smith, made the loan to the Committee to Elect Mayor Catherine E. Pugh on April 20, just six days before the primary.

That expenditure was “unlawful” because Pugh is not a member of the slate, according to the civil citation filed Friday against the slate in Anne Arundel County Circuit Court.

“The SBE [State Board of Elections] records also show that Ms. Pugh is not a member of the slate committee and that no member of the Baltimore County Victory Slate is an active candidate on the Baltimore City ballot,” according to an affidavit filed in support of the citation.

“A campaign finance entity may disburse campaign funds only if in accordance with the purpose of the political committee,” the affidavit says, citing Maryland election law. The Victory Slate is being fined $3,000 as part of the civil action.

$175,000 Cabinet Post

Pugh went on to win a close race with the second-place finisher, former mayor Sheila Dixon.

Last month, Pugh appointed Smith as chief of strategic alliances, a new $175,000 cabinet-level position in city government.

The mayor’s director of communications Anthony McCarthy referred a reporter to Pugh’s campaign committee treasurer Keith Timmons and said Smith and the mayor would have no further comment.

Timmons released the following statement:

“The Pugh campaign recently learned of the Maryland State Prosecutor’s decision in reference to the Baltimore County Victory Slate loan during the 2016 primary campaign. We regret the clear and obvious misunderstanding which led to the prosecutor’s action against the Baltimore County political organization. The loan was listed on all appropriate finance and campaign reports and has since been repaid.”

Campaign Aide Recently Indicted

The citation comes on the heels of another legal action by State Prosecutor Emmet C. Davitt against a member of the Pugh Administration.

Earlier this month, Gary Brown Jr., a longtime aide and currently an events coordinator in Pugh’s communications office, was indicted for making illegal contributions to the Pugh campaign.

Pugh has defended Brown, saying he is “innocent ’til proven otherwise” and stated that she was not aware of the $18,000 he funneled to her campaign in the names of three of his family members.

“I didn’t handle the funds. That’s not my job,” she said, speaking with reporters the day after Brown’s indictment was disclosed. Campaign laws prohibit contributions by an individual of more than $6,000.

Brown, approached at a meeting of the 40th District Democratic Central Committee (on which he sits as a member), declined to comment on the indictment.

Victory Slate

Sources had told The Brew in June that Pugh had been in desperate financial straits towards the end of the primary campaign.

Asked at the time to confirm the loan and amount, Pugh said, “I would think you’re right.” Smith never returned The Brew’s request that he comment for the June story.

State records show that Smith closed his longtime political committee, Friends of Jim Smith, in late 2014 after transferring $476,380 to the Baltimore County Victory Slate, an obscure group that had less than $20,000 in its coffers before the Smith infusion.

The Victory Slate was created in August 2006, according to the State Prosecutor’s affidavit.

The slate previously gave $9,000 to the political committees of Cathy Bevins, a 6th District Baltimore County councilwoman, and Michael E. Busch, Maryland House Speaker, state election board records show.

As of January 2016, the Victory Slate reported a cash balance of $437,348. It lists no campaign chairman and William Christopher McCollum as its treasurer.

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