By By John Fritze and Lynn Anderson and Doug Donovan
Jun 25, 2008 | 3:00 AM
Companies linked to a developer questioned in the state investigation of Mayor Sheila Dixon have made nearly $500,000 in political contributions in the past decade, state campaign finance records show.
The 57 limited liability corporations named in court records as having possible ties to Doracon Contracting President Ronald H. Lipscomb gave $487,000, almost entirely to Democrats, including tens of thousands to Dixon and Gov. Martin O'Malley.
A two-year investigation into City Hall spending has accelerated in the past week after prosecutors conducted a search on Dixon's home, more city employees were subpoenaed and a document obtained by The Sun showed that investigators are examining Dixon's relationship with Lipscomb.
Lipscomb and Dixon confirmed that they had a personal relationship between 2003 and 2004 and that they exchanged gifts in that time, but both denied that the relationship had an influence on Lipscomb's projects awaiting various city approvals.
City officials are required under penalty of perjury to disclose any gifts they receive from people doing business with the city, but Dixon has not listed any gifts from Lipscomb in the past seven years.
Prosecutors also appear to be investigating gift cards that Dixon, as City Council president, might have solicited for needy families, sources familiar with the investigation told The Sun. Investigators are looking into whether some of those cards may have been given to city employees.
"Throughout this investigation, the mayor has given her full cooperation and given the state prosecutor's office anything they have asked for," said Dixon spokesman Sterling Clifford. "As they move in yet another direction, the mayor will continue to cooperate and continue with the business of the city."
An affidavit the state prosecutor's office used to obtain a search warrant for Doracon's Biddle Street headquarters in November listed 57 companies with ties to Lipscomb - including Presidential Investors, Lambda Development and RHL Development.
Several of those companies have ties to development taking place in Baltimore's Harbor East neighborhood under the direction of H&S Properties Development and bakery magnate John Paterakis.
A 2002 letter from H&S Properties Development obtained by The Sun shows that Lipscomb was brought in as minority investor in Presidential Investors, a Paterakis company that owns at least four buildings in Harbor East. Lipscomb was expected to invest $1 million to $2 million in the company.
Paterakis has not returned several calls seeking comment. Some of the contributions - including $8,000 in donations to Dixon - carry notations saying "C/O John Paterakis" or "C/O H&S Properties."
Maryland law limits contributions from individuals and businesses to a total of $10,000 over a four-year election cycle, with no more than $4,000 going to any one candidate. However, major donors - particularly developers - have routinely funneled contributions through limited liability corporations with slightly different ownership structures, thus avoiding the limits.
The size and breadth of Lipscomb-related contributions appear to put him in the top tier of Maryland political donors, and they show that Lipscomb's connections extend far beyond City Hall.
One of the companies, Lambda Biotech LLC, lists its resident agent as Martin F. Cadogan, who since 1990 has been O'Malley's campaign treasurer.
O'Malley, who was mayor for two terms before election to governor, declined to comment on the investigation yesterday but said he didn't remember knowing of a personal relationship between Dixon and Lipscomb.
"I don't believe that I was aware of any relationship at the time," O'Malley said. "Certainly all of us know Mr. Lipscomb and know how hard he has worked to revitalize our city. He was involved in many of the projects over the course of those seven years and is one of the more successful minority businessmen."
O'Malley was a member of the Board of Estimates but was listed as absent when that body approved a $13.6 million tax break in February 2004 for Spinnaker Bay, a Harbor East apartment building. He said yesterday that he didn't remember the meeting.
Spokesman Shaun Adamec said that aides could not recall "any specific reason" why he didn't vote.
A Baltimore City grand jury hearing testimony in the case at the Clarence M. Mitchell Jr. Courthouse was dismissed early yesterday afternoon, and some jurors physically distanced themselves from reporters as they left the building.
Dixon taped an interview with WYPR-FM on Monday that aired yesterday in which she described the toll the investigation has taken on her personally.
"This is wearing on my family, on myself - I'm human. I work very hard at being a public servant," Dixon told the station.
"I am bothered by what is happening."
Ryan O'Donnell, executive director for Common Cause Maryland, said he did not want to rush to judgment on Dixon's comments in which she admitted to having a relationship with and accepting gifts from a developer who did business with the city.
"However, what we can most definitely judge right now is that the public's confidence in Maryland government has been shaken over and over in recent weeks," O'Donnell said in a statement.
"The trust we put in our elected officials is an issue all its own. So regardless of the outcome of any one investigation, can anyone honestly deny it's time to get serious about cleaning up Maryland politics?"
He said the state needs to close the loophole that allows limited liability companies to bypass campaign donation limits.
"In fact, there's no reason why corporations should be donating money to politicians to begin with," O'Donnell said. "We need a serious commitment to ethics and transparency at all levels of government."