Baltimore City

Dixon gifts probed

Prosecutors are investigating whether Baltimore Mayor Sheila Dixon received thousands of dollars in gifts - including fur coats - from a prominent developer whose projects benefited from tax breaks and zoning changes she supported as City Council president, a document obtained by The Sun shows.

Court records, drafted by the state prosecutor's office in November, indicate that Dixon also went on lavish trips to Boston, the Bahamas, Chicago and Colorado with the developer, Ronald H. Lipscomb. In one instance, the two left Baltimore for New York by train hours after she had voted to approve a tax break for one of his company's largest projects.

Yesterday, a Baltimore City grand jury began calling witnesses in the case to testify in a courthouse a block from City Hall.

The documents, presented by prosecutors to a Baltimore County District Court, offer the most detailed accounting yet of the two-year investigation into City Hall spending and provide new information about possible ethical lapses that occurred when Dixon was City Council president.

After receiving questions from The Sun yesterday, Dixon and Lipscomb acknowledged publicly for the first time that they had had a relationship and exchanged gifts, but both denied that the relationship played any role in projects that Dixon helped advance on the City Council and the Board of Estimates.

"In late 2003 and early 2004, I had a personal relationship with Ron Lipscomb," Dixon said in a statement. "We were both separated from our respective spouses at the time, we traveled together and exchanged gifts on special occasions. Our brief relationship was personal, and it did not influence my decisions related to matters of city government."

Under penalty of perjury, the city ethics law requires elected officials to report gifts from people who benefit from city business. Dixon has not reported any gifts from Lipscomb in at least the past seven years. His company, Doracon Contracting, has been involved in several high-profile developments in Baltimore, including those that have received financial incentives from the city. Lipscomb, for instance, is involved in the major development of Harbor East and in the revitalization in East Baltimore near Johns Hopkins Hospital.

For months prosecutors have declined to confirm that an investigation is under way, but the documents confirm that the office was investigating crimes of "bribery, perjury and misconduct in office" as late as November. The investigation appears to have widened since the drafting of the affidavit - prosecutors subpoenaed last week new witnesses in the case who were not mentioned in the affidavit, the first of whom testified before a Baltimore grand jury yesterday.

For instance, Patrick Turner, of Baltimore-based Turner Development, testified yesterday. Turner, whose projects include the development of Westport along the Middle Branch, is not named in the November affidavit.

However, the issues raised in the affidavit still appear to be part of the case. As recently as last week, prosecutors were looking for fur coats they claimed in the affidavit that Lipscomb gave to Dixon.

Prosecutors state that Lipscomb gave Dixon a $2,000 gift certificate to Lutherville furrier Mano Swartz in 2003, which Dixon used to purchase a Persian lamb coat and a mink coat, according to the records.

The furrier's owner, Richard Swartz, told prosecutors he remembered "a guy coming into the store and [he] requested that no name [be] put on the certificate." The certificate was purchased with a Lowe's Platinum Visa card that investigators traced back to Doracon after subpoenaing the firm's bank records.

Prosecutors were apparently seeking those same furs on the day they raided Dixon's home in the Hunting Ridge neighborhood on Tuesday. After the raid, which refocused public attention on the investigation, Dixon said she owned "several" furs and declined to say whether they were gifts.

"In Mr. Lipscomb's entire business career he has never asked an elected official, including Ms. Dixon, to do anything for him or his businesses, but has devoted his time and effort on behalf of legacy wealth for minorities, often at great personal disadvantage," Lipscomb's attorney, Gerard P. Martin, said in a statement.

Maryland state prosecutors declined to comment on the case or the documents. An attorney for Dixon, Dale P. Kelberman, also declined to comment.

The documents are part of an affidavit prosecutors crafted in seeking a search warrant they used to raid Doracon's Biddle Street offices last November. A similar affidavit for the raid on Dixon's home is under a court-ordered seal.

The Doracon documents also offer a clue as to why the investigation has taken more than two years - prompting Dixon, at one point, to call it a "witch hunt." In addition to their searches through public records, prosecutors had subpoenaed records from at least half a dozen private companies - including United Airlines, AirTran, Amtrak, American Express and several banks - and were investigating 57 limited liability corporations with ties to Lipscomb.

In addition to the coats, prosecutors have delved into a series of extravagant vacations that Dixon and Lipscomb took together, even as Dixon at the same time voted on taxpayer-funded benefits to go to Lipscomb's company.

"They became very close over a two or three month period after he moved from his home in late 2003," according to the affidavit. "At that time, Lipscomb was estranged from his wife."

In March 2004, Dixon traveled to Chicago on a $1,518.20 round-trip flight paid for by an MBNA credit card that belonged to Dennis Cullop, Doracon's vice president, according to the documents. Lipscomb arrived in Chicago at the same time.

In Chicago, the two spent large sums of money from their own accounts. On her personal credit card, for instance, Dixon charged $4,410 at Giorgio Armani, $2,272 at St. John Boutique, $600 at Coach and $570 at Saks Fifth Avenue for Jimmy Choo sandals. Records show that Dixon also paid $1,690 to stay at a Hyatt in Chicago.

Credit card statements reviewed by prosecutors show that the two traveled together to New York in February 2004. A transaction was posted on Lipscomb's American Express card for two nights' stay at the Trump International for $2,089, according to the records.

Dixon's salary at the time was $80,000. She was divorced in 2006 after a four-year legal separation from her second husband, whom she married in 1988.

Dixon and Lipscomb left for New York on the same day she voted on the Board of Estimates to approve a $13.6 million tax break for one of his projects, an apartment project in Harbor East called Spinnaker Bay. That project was developed by a joint venture of H&S Properties, Bozzuto Development and Lipscomb.

In the past, Dixon supporters have argued that because Doracon is a subcontractor, its business relationship is with the prime contractor, not the city. The city code defines business with the city as "sales, purchases, leases, or contracts," but does not mention subcontracts.

The city code, which prosecutors cite in their affidavit, prohibits officials from accepting "any gift, directly or indirectly, from any person that the public servant knows ... has a financial interest that might be substantially and materially affected ... by the performance or nonperformance of the public servant's official duties."

In some instances, the documents raise questions. For a December 2003 trip to Boston, for instance, Dixon paid $35 on her personal credit card to upgrade her seat on an AirTran flight, but it is not clear who paid for the ticket itself.

Dixon was also scheduled to meet with Lipscomb and Sen. Ulysses Currie, a Prince George's County Democrat who is now under federal investigation, in February 2004, according to the documents. They do not say what the meeting was about.

Investigators have been examining spending practices at City Hall since a March 2006 series of articles in The Sun detailed questions about the role Dixon played in approving contracts that benefited her sister's employer, a company known as Utech.

The company's owner, Mildred E. Boyer, pleaded guilty to tax evasion charges in March and agreed to cooperate with prosecutors.

Utech was hired by Doracon Contracting to perform $344,000 of electrical work on a $25 million development known as Frankford Estates. Doracon hired Utech shortly after the project received tax breaks from the city and state.

The Sun also reported that Dixon's former campaign chairman, Dale G. Clark, had received $500,000 in taxpayer money without a contract when he worked as a computer consultant to the City Council. Clark pleaded guilty to tax charges in September and has been cooperating with prosecutors. Clark went to the Bahamas for Dixon's birthday party as well.

In addition to Frankford Estates and Spinnaker Bay, prosecutors noted that Dixon supported other Doracon projects, including WaterView Overlook on the Middle Branch.

Doracon lists itself as the general contractor for WaterView Overlook, a project that will consist of 119 townhouses and condos between Westport and Cherry Hill. Dixon voted on three bills in City Council that allowed the developer to change the zoning of the parcel to make the project possible, council minutes show.

Sun reporter Lynn Anderson contributed to this article.

Gerard P. Martin's name was misspelled when this article was published in the print edition. The Sun regrets the error.