Ronald H. Lipscomb acknowledged violating campaign finance laws, and prosecutors dropped charges that he paid for a poll for City Councilwoman Helen L. Holton in exchange for her help in securing tax credits for an Inner Harbor East project that he partially owns.
State Prosecutor Robert A. Rohrbaugh said that as part of the plea agreement, Lipscomb will cooperate in his continuing City Hall corruption investigation, including any grand jury proceedings.
Rohrbaugh refused Monday to discuss how Lipscomb's plea will affect the case against Dixon, who is scheduled to go to trial in September. In January, a city grand jury charged her with 12 theft and perjury charges related to gifts she received from Lipscomb, although seven perjury offenses were dismissed last month.
The prosecutor could ask a grand jury to re-indict the mayor on those or other offenses.
In dropping the bribery charges against Lipscomb, prosecutors revealed in Baltimore Circuit Court that he was not the only developer to finance the $12,500 poll for Holton. John Paterakis, the head of H&S bakery and the developer who "owns or controls" almost all of the Inner Harbor East complex, according to the court papers, contributed $6,000, or almost half of the pollster's fee.
State laws prohibit individuals from contributing more than $4,000 per candidate per election cycle. It is the first time Paterakis' name has been raised in the corruption case; he has not been charged with any wrongdoing. Neither Paterakis nor his lawyer, Charles P. Scheeler, returned calls for comment.
Papers filed with the court show that Lipscomb paid $3 million to obtain a 2.9 percent stake in a limited liability corporation that Paterakis owns and that controls a "substantial" amount of Inner Harbor East.
Lipscomb declined to talk with reporters after the court proceeding. His attorney, Gerard P. Martin, said the plea deal allows Lipscomb "some peace."
"If you'd been subjected to what he's been subjected to for the last five years you'd be glad about this day, too," Martin said.
Dixon's attorneys downplayed the importance of Lipscomb's plea. "Mr. Lipscomb has been interviewed repeatedly by both federal and state officials over the last five years," said Arnold M. Weiner, one of her defense lawyers. "If he's ever called as a witness and he testifies truthfully he is of no concern."
Prosecutors have alleged that Lipscomb, who briefly had a personal relationship with Dixon, gave her lavish gifts that included Jimmy Choo shoes and a gift certificate at a local furrier and paid for travel to Chicago and New York. Though Dixon, then City Council president, voted to give Lipscomb's project tax breaks, she never declared the gifts from him on her financial-disclosure forms, an omission that prosecutors used when charging her with perjury.
But Circuit Judge Dennis M. Sweeney, the retired Howard County judge who is presiding over the City Hall cases, dismissed those perjury charges, ruling that prosecutors violated Dixon's "legislative immunity" by using her votes as evidence.
Prosecutors presented Dixon's votes to the grand jury as evidence that she knew Lipscomb was doing business with the city, which would trigger the need for her to disclose gifts from him.
Now, some observers believe, if prosecutors try to re-indict Dixon, they could use Lipscomb's testimony rather than her votes.
"My guess is the prosecutor has figured out that there are other ways to get an indictment unrelated to the problem," said Byron Warnken, a University of Baltimore law professor.
Sweeney also ruled that legislative immunity protected Holton's votes favoring Lipscomb's project, and he dismissed the bribery charge against the councilwoman.
The plea deal protects from prosecution Lipscomb, his employees at Doracon Contracting Inc., and 23 business entities that he runs. Those include limited liability corporations he created to develop Baltimore properties that have benefited from public financing, including those in the Frankford Estates housing complex, Uplands and Inner Harbor East.
Lipscomb is to be sentenced Oct. 22 for the campaign finance violation, and prosecutors recommend a one-year suspended prison term, a $25,000 fine and 100 hours of community service.
The bribery charge that was dropped is punishable with a two- to 12-year prison sentence and a fine between $100 and $5,000.
Although the agreement was announced Monday, Lipscomb signed the deal on June 11 and Rohrbaugh signed it on June 16.
The court proceedings Monday were supposed to start with jury selection and then opening statements and testimony from witnesses, possibly including several major figures from Baltimore's development community. M.J. "Jay" Brodie, president of Baltimore Development Corp., arrived about 9 a.m. expecting to testify.
Instead, Judge Sweeney asked Lipscomb a series of standard questions to be sure he understood the charge to which he was pleading guilty.
Lipscomb stood in court with his hands in front of him as he addressed the judge, at one point gently correcting Sweeney when the judge noted he'd been represented by counsel "for months" in the City Hall probe.
It's been years, Lipscomb said.
During the court proceeding, Rohrbaugh read a statement of facts that both sides agreed to, which outlined a cozy business relationship between Holton and two of the city's top developers.
In early July 2007, Ronald Lester, a pollster, suggested doing a survey for Holton's campaign, Rohrbaugh said. The councilwoman's campaign manager at the time, Travis Tazalaar, "was reluctant to commission the survey because he did not believe it was necessary and the funds needed to pay for it could be used more effectively for other purposes," Rohrbaugh said. Holton had been in office since 1995.
But the councilwoman wanted the poll. "Holton told him [the pollster] that she would find a way to get the money," Rohrbaugh said.
She explained that she could persuade Lipscomb, Paterakis and a third person whose name Lester could not recall to pay for the poll, according to the statement of facts. Paterakis and Lipscomb then met with the councilwoman, and they agreed to her request to fund the poll, according to the statement.
Holton in late July instructed the pollster to send the bill to Lipscomb, and Lester picked up a $12,500 check at Doracon's offices. In August, Paterakis wrote a check for $6,000 to "Duracon," misspelling the name of Lipscomb's development company.
What might happen next•State Prosecutor Robert A. Rohrbaugh has said he will appeal the dismissal of a bribery charge against City Councilwoman Helen L. Holton
• Prosecutor could use Ronald H. Lipscomb's testimony to re-indict Mayor Sheila Dixon on perjury charges that were previously dismissed
• Lipscomb could testify against Dixon at her trial on theft charges, scheduled for September
• Additional charges could be filed against other defendants