State Sen. E.J. Pipkin made millions of dollars as a junk-bond trader in New York before cashing in and returning to Maryland and a spacious home in Queen Anne's County.
But not all of his money came back with him. Some of it is planted in a small company in Delaware, the E.J. Pipkin Corp. in Wilmington. Like countless others in the state, the company uses a mail drop as an address, and has no employees or business center.
Sounds a bit like the shell companies used by large corporations to avoid paying taxes elsewhere. For two straight years, the state Senate has passed legislation closing the Delaware holding company loophole. Was Pipkin more familiar with the issue than many realized? That's what one of his constituents wants to know.
Richard Moser of Chester has asked the Maryland State Ethics Commission to investigate the situation. Moser drove to Wilmington and photographed the building at 103 Foulk Drive that houses the E.J. Pipkin Corp. in Suite 202. An adjacent office, Suite 200, is home to Entity Services Group, which helps businesses set up "passive investment companies" that avoid taxes in other states, according to the group's Web site.
Pipkin said he was well within his rights to vote on the loophole bills -- against it last year when it was coupled with other taxes, and for the measure last week.
E.J. Pipkin Corp. is not a holding company, the Republican senator said. He called it a "flow-through" corporation that was established by a former employer, CIBC World Markets Corp., and contains assets that Pipkin earned while working for them.
"It's like a 401k," Pipkin said, adding that all income earned from the company is reported on his tax filings and that he pays taxes on it.
Pipkin's assertion is reinforced by William G. Somerville, the General Assembly's ethics counsel. Hearing rumblings that his political opponents were trying to dig up dirt, Pipkin, who is running for U.S. Senate against Democratic incumbent Barbara A. Mikulski, asked him for an opinion.
"Although you have interests in two Delaware corporations and a Delaware limited liability company, it is my understanding that the bill would not have affected you in any way, since you currently pay state income tax on the income from these entities," Somerville wrote in a Feb. 25 letter. "In short, there is not even the appearance of a conflict of interest with regard to the bill."
An announcement with a bit of bite
In hearings before the House and Senate on Thursday, O'Malley used part of his testimony to fire a few shots at Neall.
The mayor announced that William Ratchford, former director of the state Department of Fiscal Services who has worked over the past few years as an analyst for the city, was the new fiscal adviser to the school system, while verbally digging into Neall for his resignation.
"I've never known Mr. Ratchford to pick up his marbles and leave the game," O'Malley told the Senate Budget and Taxation Committee.
Senators responded with a surprised "Ooooooh."
Members of the House Ways and Means and Appropriations committees heard similar lines from him in testimony before them, too.
Mikulski fund-raiser a Senate ladies' night out
Mikulski convened a fund-raiser at the National Aquarium in Baltimore last night with all eight of the Senate's other female Democrats among the invited guests: Barbara Boxer and Dianne Feinstein of California, Maria Cantwell and Patty Murray of Washington, Hillary Rodham Clinton of New York, Mary L. Landrieu of Louisiana, Blanche Lambert Lincoln of Arizona, and Debbie Stabenow of Michigan.
The event marked the first gathering of the nine women outside Washington, according to Mikulski's office, which refers to its candidate as "the Dean of the women Senators."
Not to be outdone, her Republican challenger, Pipkin, planned a pizza party at Squire's Pizza in Dundalk near where he grew up while the gala was under way.