“There aren’t any moves she can make at this point,” he said. “What’s going to happen after they’ve done these raids, there will be a whole bunch of grand jury subpoenas, they’ll subpoena for records they didn’t get from the search warrant, and they’ll talk to witnesses. This could last six months to a year.”
Hauling out boxes of “Healthy Holly” books and documents, dozens of federal law enforcement agents struck offices, homes and government buildings across Baltimore as an investigation into Mayor Catherine Pugh’s business dealings widened. FBI agents and IRS officials raided Pugh's office.
Lawyers said federal agencies likely are looking for possible tax violations, such as whether she reported income from the books. And indeed, among the agents who descended on seven locations in Baltimore associated with Pugh — including her former campaign treasurer’s office, an aide’s apartment and a nonprofit job training center that she once led — were some wearing Internal Revenue Service jackets.
“When money is involved, there is potential for tax crimes,” said David Jaros, a University of Baltimore Law School professor. “And they’re easier to prove.”
Steven H. Levin, a former federal prosecutor, cautioned that the raids are investigatory tools, and Pugh has not been charged with anything.
“Nothing can come of this,” he said. “Sometimes these investigations don’t yield anything.”
Still, for investigators to get a search warrant in the first place, they have to present evidence under oath that they have reason to believe a violation took place, Levin said.
“What we can take from this is agents developed what they considered probable cause of a criminal tax violation,” he said.
Levin said the state and federal investigations could run on parallel courses, with the former perhaps investigating conflicts of interest and the latter looking at tax issues.
With calls for Pugh to resign growing even louder after the Thursday raids, attorneys said she might face limited options going forward.
“It’s easier to make a deal with state than federal prosecutors,” Weiner said.
And Pugh might not have much to bargain with at this point, he said.
Baltimoreans woke up Thursday to the news that FBI agents were on the move across the city, raiding City Hall and Mayor Catherine Pugh’s homes — among other locations — amid what appeared to be a large investigation also involving the Internal Revenue Service.
When Dixon was indicted in 2009, after a yearslong investigation into City Hall corruption, she remained in office throughout the trial. Weiner said he was able to negotiate an exit for Dixon because a part of the case against her, theft charges stemming from gifts she received from a developer and onetime boyfriend, had been dismissed during trial. She was convicted of embezzlement for using gift cards meant for the poor and pleaded guilty to perjury as part of a deal to resign from the mayor’s office and keep her $83,000-a-year pension.
How much power Pugh has is a matter of dispute among attorneys, with some saying if she decided to resign rather than drag the city through further upheaval and uncertainty, prosecutors might be more lenient, or at least view the case differently once the target is a private citizen rather than a sitting mayor. Other lawyers, though, said that as long as Pugh remains in office, she wields some power.
“I wouldn’t give up any carrot I could offer to the state,” Jaros said.
“Her best leverage is her position as mayor,” Levin agreed. “If she were to resign now, she loses that leverage.”
He said he expected that federal investigators would review the evidence they gathered today and from subsequent subpoenas and witnesses, and then perhaps the parties would “start talking to see if there can be a resolution,” he said.
“Or,” Levin said, “we might very well see charges.”
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