State officials confirmed yesterday that federal authorities are investigating juvenile program grants distributed by an anti-crime office overseen by Lt. Gov. Kathleen Kennedy Townsend, but Townsend said she believes the probe is fueled by her political opponents.
The federal grand jury investigation centers on a $503,000 federal grant awarded in March last year to a Prince George's County project, Diamonds of Opportunity, which targeted youth who had committed crimes.
One partner in the project was Safe Streets 2000 Inc., whose executive director, Terry Lawlah, is the daughter-in-law of state Sen. Gloria Lawlah, a Prince George's County Democrat. Del. Joanne C. Benson of Prince George's is listed as Safe Streets' president on tax records.
The Governor's Office of Crime Control and Prevention, which reports to Townsend, rescinded the grant within several months, after problems surfaced. But the office later shifted money to an unrelated not-for-profit organization to settle claims from three people who said they had not been paid for work on the project.
Officials with the crime control office said they had received a subpoena for documents related to the grant. Townsend said the office had complied with the order, and she was confident that money was distributed properly. She said she had not been subpoenaed to appear before a grand jury.
A spokeswoman with the federal Office of Justice Programs said yesterday that the agency would investigate whether the grant money awarded in Prince George's County complied with federal and state guidelines.
Steven P. Amos, executive director of the governor's crime office, released 700 pages of grant-file documents yesterday to buttress his assertions that the agency followed the rules. A spokesman for Gov. Parris N. Glendening said the governor declined to comment.
Townsend said she was concerned that the inquiry might have political roots. U.S. Attorney Thomas M. DiBiagio received the strong backing of Rep. Robert L. Ehrlich Jr., Townsend's likely Republican opponent in the race for governor, before being appointed by President Bush in September.
"I think this is a bunch of political garbage," said Townsend, angered both by news of the probe, first reported in The Washington Post yesterday, and by a call from Ehrlich yesterday for DiBiagio to increase gun crime prosecutions in Baltimore. Townsend said she and others have been making gun-prosecution pleas for months.
"It makes me think that all these Republicans are engaged in political garbage," she said. "They are playing politics with gun violence. They are playing politics with children's lives."
Ehrlich said he was incredulous that Townsend would question DiBiagio's motives in investigating the grants, saying he had not spoken with the U.S. attorney since DiBiagio was sworn in December.
"When you start questioning the integrity of the United States attorney, that's meltdown," he said. "How would I know anything about a grand jury investigation? She's really left the ballpark."
Ehrlich said his campaign had not focused on the crime control office, and that he had little knowledge of its operations. The office oversees millions of dollars yearly in federal grants that pay for many of the programs Townsend champions, including her HotSpot initiative that helps communities fight crime.
DiBiagio did not return phone calls about the investigation. A spokeswoman for his office, Assistant U.S. Attorney Virginia Evans, said she could not confirm or deny accounts of a grand jury probe.
Special Agent Barry A. Maddox, a spokesman for the FBI's Baltimore field office, declined to comment yesterday on the investigation.
The Diamonds of Opportunity program was created after Safe Streets, the Prince George's group with connections to area lawmakers, had been rejected for an earlier grants request.
Crime office employees encouraged Safe Streets to partner with a national group with more experience, and the organization formed an alliance with National Homes Trust, based in Los Angeles, officials said. The governor's crime office then approved $503,000 from a federal Juvenile Accountability Block Grant for the program.
Townsend said that she had no involvement in the awarding of the grant. She said she did not speak with Lawlah or other elected officials about it.
"This is a federal grant, and there are rules and regulations about how they should be awarded," Townsend said.
The partnership between Safe Streets and National Homes Trust quickly dissolved, however, leaving behind claims of unpaid bills that were eventually settled in an unorthodox fashion that appears to be a target of the federal inquiry.
Amos said the crime agency cut off funding and recouped money from the grantee after less than a year because of problems with how it was working.
The move left Bruce W. Branch, a communications consultant and former journalist, unpaid. In an effort to recoup $31,000 he said he was owed for more than a year's work on the project, Branch launched an aggressive letter-writing campaign that included threats of political damage to Townsend.
"I am an honorable man, a Christian leader, but my patience has worn thin and I am about to unleash a Holy War against the demonic spirits that seem to have taken over officials at National Homes Trust and SafeStreets 2001," wrote Branch in a letter to Benson, the delegate and Safe Streets president.
In a May 25, 2001 letter to Townsend, Branch asserted that "Republican State Chairman Mike Steele has found out about this and wants me to talk publicly about these issues, no doubt to embarrass the Glendening-Townsend administration."
But Steele, who was selected last month as Ehrlich's running mate, said yesterday he had not spoken with Branch since 1999. Branch said in an interview that he raised Steele's name as "just a threat," and had not contacted the party official directly.
Monique Daviss, executive director of the National Homes Trust, acknowledged receiving a harshly worded letter from Branch in April last year for "hours and hours of free work" that included meeting with juveniles, writing press releases, promoting stories in the media and writing letters to public officials.
Daviss did not dispute that Branch had performed the work but said the group's national headquarters had never authorized his employment or signed a contract with him.
After the series of letters, state officials examined invoices and determined that Branch and two other contractors who worked on Diamonds of Opportunity should be paid.
"[I]t has been determined that compensation for the services you rendered are appropriate," reads an Aug. 20, 2001 response to Branch bearing Townsend's signature in state files.
Because the initial grant was no longer active, crime office offices decided to pay Branch and two others by passing money to an unrelated not-for-profit group, Quiet Fire Repertory Co.
Branch received $20,000 from Quiet Fire; Carol McCreary-Maddox got $15,700 and Bert Smith received $6,250.
"We had a contractual obligation we had to live up to in support of the Diamonds of Opportunity project," Amos said.
Amos said federal rules do not allow his office to use grant money to pay individuals or consultants directly; payments must be paid through a nonprofit.
"Quiet Fire is a legitimate organization and an appropriate vehicle with which to make the payment as a sub-grantee," said Robert W. Weinhold, a spokesman for the GOCCP.
Asked if Branch's threat of embarrassing Townsend politically was a factor in the unusual way he was paid, Weinhold said: "Political threats are of absolutely no relevance. What is relevant is the proper administration of these funds."
Staff writers Gail Gibson and Sarah Koenig contributed to this article.