Reporter Luke Broadwater talks about the Maryland State Prosecutor accusing a political slate of making an "unlawful" $100,000 loan to Catherine Pugh's campaign. (Baltimore Sun video)
Prosecutors are accusing a political slate funded by former Baltimore County Executive James T. Smith Jr. of making an unlawful loan to Mayor Catherine Pugh before the Democratic primary last year — the second action prosecutors have taken this month against donors to Pugh's campaign.
An investigator with the Office of the State Prosecutor has filed a $3,000 fine in Anne Arundel County District Court, charging the Baltimore County Victory Slate with "unlawfully making an impermissible expenditure of a $100,000 loan to the Catherine Pugh committee, as Pugh is not a member of the slate."
In the final days of Pugh's effort to defeat rival Sheila Dixon in the April primary, her campaign received $315,000 in loans, including $100,000 from the Baltimore County Victory Slate.
Groups of candidates form slates in order to share campaign donations free from many of the restrictions that limit donations to individual candidates.
Prosecutors say Pugh was not entitled to receive the April 20 loan from the Baltimore County Victory Slate because she had not joined it. She has since joined the slate and repaid the loan.
The slate is funded from Smith's campaign account. Smith now works as Pugh's chief of strategic alliances for a $175,000 salary.
Keith Timmons, the treasurer of Pugh's campaign, said campaign officials "recently learned" of the prosecutor's actions.
"We regret the clear and obvious misunderstanding which led to the prosecutor's action against the Baltimore County political organization," Timmons said in a statement. "The loan was listed on all appropriate finance and campaign reports and has since been repaid."
Pugh and Smith are both Democrats. Neither responded Monday to requests for comment.
Donald F. Norris, director of the School of Public Policy at the University of Maryland, Baltimore County, said it was not clear whether the case would be problematic for Pugh. He said Smith, a former judge and state transportation secretary, has a reputation for being an "extremely honorable and a decent guy."
Smith used the Baltimore County Victory Slate in 2006 to transfer more than $400,000 to Baltimore County State's Attorney Scott Shellenberger's campaign account. Shellenberger is a member of the slate.
Prosecutors announced an indictment this month against a longtime Pugh aide on charges he violated campaign finance laws during the primary.
Prosecutors say Gary Brown Jr. funneled $18,000 through his family to the Pugh campaign. The maximum amount an individual can give to a candidate during a campaign cycle under Maryland law is $6,000.
Prosecutors say Brown deposited cash into the bank accounts of his mother, stepfather and brother before the primary and then immediately contributed that money to the Pugh campaign in their names.
Pugh has said Brown, a legislative aide to Pugh in the state Senate and later her campaign spokesman, is "innocent unless proven otherwise."
She has said he will continue to work in her mayoral communications office, where he is paid $46,000 annually.
State Prosecutor Emmet C. Davitt said it was "unknown" how Brown got the $18,000. He said the investigation is continuing.
Brown declined to comment. He was selected last month to fill a vacancy in the House of Delegates, but his swearing-in was called off after the indictment.
Former City Councilman Nick J. Mosby has been selected to replace him.
Damon Effingham, policy manager at the government watchdog group Common Cause Maryland, noted that both cases involve people who gave financial support to the campaign landing jobs with Pugh's administration.
Even so, Effingham said, "there could be legitimate reasons for why these things happened."
"She has to be accountable to the people who elected her," he said. "She owes them an explanation for these instances."
Sean Yoes, host of "First Edition" on WEAA radio, agreed.
"To start off with two controversial issues connected to money within the first month of her tenure as mayor is concerning," he said. "I would be looking for a substantial explanation and a lot of transparency about both these situations."