Paterakis pleads guilty; will pay $26,000 in fines
80-year-old baker and developer to cooperate in state investigations
John Paterakis (left) is driven from the garage of the Mitchell Courthouse in Baltimore after pleading guilty to two campaign finance violations, both misdemeanors. (Baltimore Sun photo by Kim Hairston / September 4, 2009)
Paterakis had been indicted on charges that he exceeded the allowable donations limits by contributing $6,000 toward a re-election poll commissioned by City Councilwoman Helen L. Holton.
A major political and business power broker, Paterakis usually stays behind the scenes and on Friday declined Circuit Judge Dennis M. Sweeney's offer to address the court. "I think the attorney talked for me," he said in court. He also refused to speak with reporters after the proceedings.
His lawyer, Charles Scheeler, a partner at DLA Piper, issued a statement saying Paterakis "accepts full responsibility for his mistake" and that "while regrettable," the guilty plea "does not diminish John's achievements over a 60-year career."
The 80-year-old Paterakis, wearing a tan suit, used a walker for support as he entered and exited the courtroom Friday afternoon. He stood when Sweeney entered the chamber, but Scheeler requested permission for Paterakis to remain seated during the proceedings because he "has difficulty standing for extended periods of time."
Paterakis rose from humble beginnings, transforming his family's shop into one of the largest bread suppliers in the country and becoming something of a legend in the city's political circles. He has given tens of thousands of dollars to political candidates, his mere attendance at a campaign event can drive up donations and he has had close ties to every Baltimore mayor since William Donald Schaefer.
State Prosecutor Robert A. Rohrbaugh said in a statement that "cozy relationships" between developers and elected officials are "devastating to the public confidence in the honesty and fairness of our governing institutions."
Paterakis' guilty plea is the second and highest-profile plea in a set of four City Hall corruption cases pursued this year by the state prosecutor's office. Developer Ronald H. Lipscomb pleaded guilty to a similar campaign finance violationfor also contributing toward the $12,500 political poll for Holton's campaign. Maryland law prohibits donors from giving more than $4,000 per candidate per four-year election cycle.
In another of the investigations, Mayor Sheila Dixon has been indicted on unrelated charges that she stole gift cards intended for poor families and that she perjured herself by failing to report lavish gifts from her then-boyfriend Lipscomb.
Lipscomb, who has a small stake in Paterakis' Harbor East development, had been accused of bribing Holtonfor the portion of the poll he funded. In July, on the day his bribery trial was to begin, he pleaded guilty to a single campaign finance violation and pledged to cooperate with the state's investigation. He has not been sentenced.
Holton had been charged with bribery for accepting the poll Lipscomb funded in exchange for helping him secure tax breaks for Harbor East. At the time, she chaired the Taxation, Finance and Economic Development Committee. But Sweeney dismissed the bribery charges, a ruling that the prosecutor is appealing.
Holton still faces charges that she violated campaign finance rules for the portion of the poll funded by Paterakis. Her lawyer, Joshua R. Treem, said Friday that the new development would not be significant in his client's case. "Regardless of what Mr. Lipscomb has had to say or Mr. Paterakis has had to say, Ms Holton is not guilty of any of the charges."
In court Friday, Assistant State Prosecutor Tamara Gustave read an agreed statement of facts, saying that Paterakis, Lipscomb and Holton met in Baltimore to discuss the poll that the councilwoman wanted done over objections from her campaign treasurer, who felt it was an unnecessary expense.
Paterakis recalled, according to the statement of facts, that Holton "asked about the status of the pending real estate projects in Inner Harbor East." Holton then requested that the two developers fund the poll, according to the account Lipscomb gave prosecutors.
Ronald Lester, the pollster, billed Lipscomb for the poll and picked up a check from his firm, Doracon Contracting, on July 30, 2007. The next month, Lipscomb asked Paterakis to reimburse him for a portion of the poll, according to court papers.
Paterakis said little during his court appearance, answering most questions Sweeney asked by simply replying: "Yes, sir."
In one case, Sweeney asked Paterakis if he was on probation in the summer of 2007 when the crime occurred.
Paterakis quipped: "Not knowingly." Paterakis' attorney, Scheeler, quickly added: "He was not."
Later Sweeney said: "There will be no trial. You are admitting your guilt."