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Harford executive gets reimbursed for legal bills in state investigation

An in-house lawyer, who works for Harford County Executive David Craig and his administration, says Craig was within his rights to request reimbursement of more than $18,000 in legal fees Craig personally incurred after he hired outside counsel to represent him during a state investigation of a 2009 transaction involving the county and the owners of an industrial park.

The county was also within its right to reimburse Craig and another county official who hired private counsel in connection with the same investigation, Nancy Giorno, a senior deputy county attorney, said in recent interviews. Together, the legal expense reimbursements totaled almost $39,000.

Both Craig and County Attorney Robert McCord hired outside lawyers to represent them in the investigation conducted by the Office of the State Prosecutor about a $199,000 payment the county made to the owners of the Forest Hill Industrial Airpark.

The investigation, which involved the submission of evidence to a county grand jury, according to those familiar with the probe, ended with a finding that neither county official had acted improperly, although the Office of the State Prosecutor, in keeping with its long-standing practice, never acknowledged publicly that it was investigating the roundabout case, nor made a public statement that the probe was over.

Rebate to developer

The $199,000 payment in question was made in connection with road improvements the county made inside the park after the owners, J. Robert Martin Jr. and his mother, Mary Martin, constructed at their expense a roundabout along neighboring Route 23 to provide a new access to their property. The roundabout connection was required by the county, following a lengthy series of zoning reviews that permitted the expansion of the park onto a neighboring property the Martins had acquired years ago.

The state investigation focused on McCord's actions in overruling a junior member of his staff and ordering that the Martins receive what amounted to a rebate after the county rebuilt Commerce Road that runs through the industrial park between the new roundabout and Jarrettsville Road.

Craig, who has claimed he had no role in the decision to authorize the $199,000 payment, has nevertheless claimed the county was obligated to make the payment under its memorandum of agreement with the park owners spelling out the county's responsibilities on the road upgrading project. Under that pact, signed in 2008, the county agreed to spend up to $650,000 building and/or improving Commerce Road, with the park owners obligated for any expenses incurred over that amount.

Ultimately, the county spent considerably less on the Commerce Road project, and J. Robert Martin Jr., through his lawyer, requested the difference: $199,000. Though Craig said he did not have any role in making the payment, he also said in a 2010 interview the money covered "auxiliary work" by the park owners, though he did not elaborate.

When the state investigation began in August 2009, neither Craig nor McCord sought approval from the Harford County Council when they hired their lawyers, nor was the council ever consulted about the reimbursements for the legal bills, which were completed earlier this year. The Aegis obtained the paperwork on the attorneys' fees, the reimbursement requests of Craig and McCord, and the payment authorizations after it filed a Freedom of Information request for those documents.

Lawyer conflict

According to Giorno, McCord, the county's chief legal officer, had a conflict of interest because of his involvement in the investigation and thus could not represent Craig in connection with the probe.

At the time, Giorno was a full time county employee working under McCord. Because her boss became a focus of the investigation, she took over the duties of advising the government on requests for documents and other evidence that was being collected, as well as advising county employees who were interviewed by the state prosecutor or subpoenaed to testify before the grand jury. Giorno retired in the summer of 2010 but has remained on the county payroll as a part time employee, continuing to represent the county executive before the county council and on other matters affecting his administration.

In January, Craig requested reimbursement from the county for $18,744.25 paid to the law firm of Kramon & Graham, P.A., in Baltimore, noting the state's inquiry did not find any wrongdoing.

In a letter to Craig, dated Jan. 10, Craig's lawyer Andrew J. Graham wrote: "This will confirm that I spoke with Mike McDonough of the State Prosecutor's Office last week, and he confirmed to me that the investigation has been closed. Unfortunately, I doubt that we will receive any formal, written verification of this, but Mike left no doubt about what he was saying."

McCord issued a legal opinion, sent in February to Rocky Gonzalez, head of the county's Office of Risk Management, explaining that in his opinion the county could legally reimburse the personal legal expenses of the county executive.

McCord was also reimbursed a total of $20,965 for the legal fees he incurred with the Baltimore law firm of Miles & Stockbridge, P.C.

According to an opinion issued in April by Elissa Levan of Funk & Bolton, of Baltimore, a public body may reimburse an employee for reasonable counsel fees incurred in connection with a criminal investigation, if the investigation has concluded and criminal charges have not been filed, where the employee has acted in good faith and within the scope of employment.

He said the opinion was provided at no cost, at his request, as a professional courtesy by that law firm.

"Professionally, I thought it best for me to have a second opinion," he said.

Giorno said case law also says if a public official has to hire outside counsel in connection with an investigation of misconduct in office and there is no finding of misconduct, he or she is entitled to reimbursement.

No oversight needed

She also said Craig was not required to ask the county council's permission to hire counsel because he was being privately represented.

"It [hiring of counsel] was not to represent the county," she explained.

Giorno said Section 403 of the county charter did not apply in this instance. Section 403 states: "The County Executive may, with the approval of the Council, employ special legal counsel to work on problems of an extraordinary nature when the work to be done is of such character and magnitude as to require services in addition to those regularly provided by the Department of Law."

Giorno said the charter addresses issues of representation on the county's behalf, because the Law Department only represents the county, not officials personally. She also said the charter section does not preclude reimbursement for private cases involving public officials.

Professional contracts are generally required to go through the county Board of Estimates, but "the employment of legal counsel is exempt from the Board of Estimates," Giorno said. "When we are hiring outside counsel, it has to go to the county council."

Giorno gave several examples of cases where outside counsel was hired to represent the county, and therefore had to go before the council.

But in this case, because Craig was only hiring a lawyer to represent him personally, the issue of reimbursement would not be within the council's purview, she said.

"There was no need for David [Craig] at all to go before the council," she reiterated.

In interviews, County council members have said they were not aware that the county executive had asked for reimbursement, nor were they aware the county had reimbursed Craig and McCord for those expenses.

Several of them, including Councilwoman Mary Ann Lisanti, Councilman Joe Woods and Council President Billy Boniface, said they believe there is a threshold for expenditures to come before the council, though they weren't specific.

Boniface, however, added that he was not concerned about the payments because he understood the law was being followed.

"As long as the executive is complying with the charter, I am fine with the way he is handling things," he said.

Copyright © 2014, The Baltimore Sun
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