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Developer pays fine over election law case

A Baltimore developer has paid a $55,000 fine to settle a case in which the Federal Election Commission found the company used corporate funds to make campaign contributions in the names of company executives during the 2006 election cycle.

Edward St. John, chairman and owner of St. John Properties Inc., agreed to pay the civil penalty after the commission found that political contributions by six senior vice presidents, who were later reimbursed by the company, violated laws that prohibit corporations from using general funds to help elect candidates to federal office, the FEC reported.

Contributions were made to the Maryland Republican State Central Committee's federal account and to Michael Steele's 2006 Senate campaign, the FEC said.

In response to a complaint filed by Citizens for Responsibility and Ethics in Washington (CREW), the FEC found that St. John encouraged company vice presidents to contribute to the central committee and that each made $10,000 contributions during October and November 2006. Early the next year, the FEC found, St. John reimbursed the executives by increasing their profit-sharing bonuses.

St. John was not available for comment Tuesday. But the developer said in FEC documents that, when he encouraged the contributions, he had no intention of directly or indirectly reimbursing those payments. Likewise, the executives said they never expected to be repaid, according to the FEC.

In 2007, on the advice of counsel, the executives returned the bonus amounts that were attributable to the contributions, the FEC documents said.

William J. Murphy, an attorney for St. John, said the company agreed to the Aug. 29 settlement after the FEC found no intentional wrongdoing by St. John or the company.

"It was a technical violation in their view, and we disagreed, but rather than litigate we decided" to settle, Murphy said.

In 2008, St. John paid a $55,000 civil fine after the Maryland state prosecutor found that contributions by the company vice presidents in the same election cycle violated state law. That investigation centered on 2006 contributions to Baltimore's then-mayor, Martin O'Malley, and Baltimore County's executive, James T. Smith Jr.

Melanie Sloan, executive director of CREW, said the FEC's finding that the federal violations were not intentional was "ridiculous, given that [St. John] had a long history as a contributor. He knows the rules."

Lorraine.mirabella@baltsun.com

Copyright © 2015, The Baltimore Sun
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