In the wintry Eastern Shore duck blind, frozen mud crackles underfoot. The sweet smell of burnt gunpowder lingers. And Steve Peck watches, waiting for ducks to descend -- always into the wind.
Floating decoys strain against their anchoring weights, signaling the wind's direction. He moves into position. When the ducks are in range of his Remington 1100 shotgun, he slowly squeezes the trigger.
Like any good hunter -- and good businessman -- Mr. Peck can detect a shift in the wind. And that's precisely what the former chairman of Signet Bank/Maryland felt last month, once he had exchanged his camouflage fatigues and hip boots for a suit and tie. He was helping master developer James Rouse build support for a costly dream: a model community for thousands of Baltimore's poor. As a favor, Mr. Peck had arranged a breakfast meeting of a half-dozen of the city's corporate elite.
"Guys who look like me," J. Stevenson Peck says, words sharp and angled with the accent of his native North Carolina coast. He means: guys who have lived their lives in overstuffed chairs, feet propped up on massive desks, commanding thousands of people and millions of dollars. Guys who, for all their quaint fondness for muddy, frost-covered duck blinds, are accustomed seven-figure salaries and life at the top.
And guys who can, without blinking, authorize a corporate check for $500,000 or $1 million.
Yet this target list, he knew instinctively, was very different from the others he had drafted over the years. The wind had shifted. For the first time in a decade, some familiar names were missing -- names usually at the head of the list. There was no Jack Moseley, no Alan Hoblitzell. No one at all from USF&G; or Maryland National, two of the largest and most generous companies in Baltimore.
Ordinarily, the changeover of businessmen -- even at the top of Baltimore's largest companies -- wouldn't spark much concern. The new chief executive officer would assume his predecessor's spot among the corporate leadership: a choice, linen-covered table at the Center Club and a board seat at the museum or symphony or the Johns Hopkins Hospital.
Today, though, Mr. Moseley and Mr. Hoblitzell -- fallen CEOs who were replaced by people with no community ties -- have come to represent a broader, more dramatic decline in the power and influence of Baltimore's corporate giants.
Merger mania, which gripped Wall Street in the 1980s, robbed Baltimore of many home-grown companies and the clout their top executives could wield on issues as diverse as fund raising and stadium-building. In their place is a group of executives who may feel more loyalty to a distant corporate headquarters than to Baltimore. The remaining pool of powerful, home-grown CEOs is so shallow you can see bottom.
Meanwhile, the recession has caused many locally based companies to retreat inward, concentrating more on the bottom line and less on community problems. And the bond between corporate Baltimore and City Hall, which drove downtown's revival for two decades, has cracked.
"In a way, it's the end of an era," says Michael Harrison, director of the Baltimore Opera, one of the city's major cultural institutions.
And it couldn't come at a worse time.
As Baltimore struggles to maintain the momentum of its downtown renaissance and gropes to handle such pervasive, overwhelming problems as public education and crime, no one knows if -- or how -- the vacuum of corporate leadership will be filled.
If business doesn't help provide the backbone -- and bankroll -- for housing, museum expansions and other major civic projects during the next decade, who will? A lame-duck governor who's trying to slash millions of dollars from the state budget? Maybe. The cautious mayor of a financially troubled city? Not likely. The federal government? Fat chance.
"We're in great danger of sliding backwards," says former Baltimore Gas & Electric Co. chairman Bernard Trueschler, lamenting the loss of home-grown companies and their powerful CEOs. He adds, "We could become a Hagerstown."
PLUGGED IN Power is hard to define. To Mr. Trueschler, it's like pornography -- knows it when he sees it.
"Clout is something you presume you have," says Mr. Trueschler, who still sits on BG&E;'s board. "If you don't think you have it, you don't."
Mr. Trueschler, trim and distinguished, has it. From his large office atop a sleek downtown skyscraper, he can put the arm on corporate executives for half-million dollar donations. Or complain to Gov. William Donald Schaefer about tax proposals.
"I can call Schaefer on the phone and he'll answer it," he says. "I have clout because I have access."
He gained that power as head of BG&E;, Maryland's largest utility. He commanded thousands of Baltimore-area employees and more than $1 billion in annual revenues.
And he put those resources to work. When the Baltimore Symphony Orchestra was near bankruptcy, he helped organize a $40 million rescue campaign, and made sure that BG&E; chipped in $1 million. Today, under CEO George McGowan, BG&E; remains one of Baltimore's biggest corporate donors.
Standing at the large window that wraps around his office, Mr. Trueschler can point to examples of Baltimore's corporate muscle.
Charles Center: conceived by a handful of businessmen, the cornerstone of Baltimore's revival. The 35-story USF&G; tower: the first major development in the Inner Harbor area and a signal of business' commitment to downtown. And the new Camden Yards baseball stadium, made possible when local executives guaranteed the Orioles $10 million in season ticket sales -- a deal worked out in one morning.
Today, business leaders are pushing for a $150 million expansion of the Baltimore Convention Center. They're leading the city's bid for a professional football team. They're helping the University of Maryland Baltimore County focus its new engineering school on academic subjects that can boost the region's economy. And they've bankrolled Baltimore's newest cultural landmark, Hackerman House, the Walters Art Gallery's museum of Asian art.
They do it because it's good business. It's easier for companies to attract employees to a vibrant city, and to sell products in a prosperous and growing region. Community involvement can also boost a company's image.
"What was good for Baltimore and Maryland was good for us -- as businessmen," says Jerome W. Geckle, retired chairman of PHH Corp. He adds, "If the community's not successful, a company's got a major liability."
Often, big civic projects merge private interests and public benefits. The light-rail line, for instance, is designed to bring workers out to new firms in Hunt Valley and near the airport. The new stadium -- which at one time Mr. Schaefer opposed -- keeps baseball fans in Baltimore happy and will make the Orioles an even more lucrative business. In both these projects, private influence has prodded and guided the state in committing many millions of dollars of public money.
To Arnie Graf, until recently an organizer for BUILD -- Baltimoreans United in Leadership Development -- a vocal citizens' group, there's no clearer definition of clout.
Sometimes, the corporate self-interest is unusually overt. About three years ago, Henry Rosenberg, head of Crown Central Petroleum, proposed an auto racetrack to compete with those in nearby states. He even paid for state officials to tour other racetracks, and pretty soon the Department of Economic and Employment Development was on board. Today, the state is studying a Cecil County site for a racetrack -- a project that neatly complements Crown's strategy to sell gas by advertising at racetracks and sponsoring a race car.
What it takes to get big projects going, and then keep them going, is someone who can write the makes-a-difference check or can pledge the corporation's loyalty. Someone who has access to corporate directors -- a built-in constituency of heavyweights. Someone who is the CEO of a large, local company.
Help from Baltimore's corporate powers became even more important to the city during the Reagan era, when the federal money that had assisted Baltimore's revival all but dried up.
Mr. Moseley and Mr. Hoblitzell were emblems of that era. They had very different personalities. Mr. Moseley was known as a hard-nosed, cigar-chomping conservative; Mr. Hoblitzell a studious, art-loving social moderate.
But both were empire builders and, in a sense, loners, neither having come from the establishment families that had long controlled corporate Baltimore. For both men, building an empire also meant creating a high personal profile. And this fit perfectly with Baltimore's needs -- their multimillion-dollar corporate gifts dramatically raised the level of business giving.
Arnold Lehman, director of the Baltimore Museum of Art, remembers Mr. Moseley calling a group of local business executives to the USF&G; tower in the early 1980s. "I remember him serving drinks, rolling up his sleeves and saying that this community needs a first-rate museum, and he, personally, and USF&G; as a company, were behind it." Then he announced a $500,000 gift -- very large for Baltimore at the time -- which set a goal for the other executives.
The size and scope of the gifts increased over time. USF&G;'s $2 million was the largest donation in the Baltimore Symphony Orchestra's $40 million endowment campaign. Maryland National's parent company, MNC Financial, gave $1 million to lead the art museum's recent $21 million campaign. USF&G; was the leading corporate investor in Harbor Bank, a minority-owned bank.
When the federal cutbacks began, Baltimore officials compiled a "book" of projects they wanted to keep going. One day Marion I. Pines, a mayoral staffer, brought some executives -- she calls them "the foot-long cigars" -- to an ornate City Hall conference room and passed the book around. Mr. Moseley spotted a fire safety education program for elementary school children, which
cost about $48,000 annually. "I'll buy that," he said. Then he took the book to other business executives, selling page after page, each one a small but useful bit of government service.
Mr. Moseley and Mr. Hoblitzell bought a lot of publicity for their efforts -- at times it seemed that nothing happened without their backing. They left their imprint not only on economic development projects and small city programs and cultural fund-raisers, but on a whole array of other activities. Mr. Hoblitzell led the commission that plotted the state's reform of higher education; Mr. Moseley headed a committee that raised $15 million for Loyola College, even though he has no links to Loyola.
But widen the perspective for a moment. As a whole, the business community here hasn't been as ambitious in its goals as in some other cities, like Cleveland or Pittsburgh or Minneapolis. (See story on Page 14.) The Greater Baltimore Committee, a group of executives of the city's largest businesses, earned a national reputation for its economic development efforts, going back to Charles Center in the 1950s. But business has not in any large-scale way addressed the severe problems besetting Baltimore's residents.
Business leaders haven't moved past patchwork approaches to education reform, for example. Mr. Hoblitzell was business' leader in a partnership called the Commonwealth Program, which is designed to steer high school graduates into jobs or college, but concern over the failures of the schools never reached the point that business said, "Enough!"
Timothy Armbruster, head of the Goldseker Foundation, says nothing serious will be done about the schools until business leaders reach that point -- as they did in Chicago, where business spearheaded the nation's most radical education reform plan, overcoming opposition by school administrators and teachers.
Mr. Moseley and Mr. Hoblitzell weren't really doing much about the public schools, adds Robert C. Embry Jr., who heads the Abell Foundation and the state school board. But at least they had the potential to do something, by dint of their positions at the top of the state's largest insurance company and largest bank. Now it's hard to see anyone with such potential.
WHERE DID ALL THE CEOS GO? The drain on corporate power started nearly a decade ago, but it was masked by the roaring affluence of the 1980s. All that flowing money hid the fact that Baltimore was being stripped of its assets (tangible and intangible), leaving it in poor shape for the sober '90s.
Mergers and buyouts -- the boom behind the boom years -- left many local companies in the hands of conglomerates based in other cities or other countries. On that list: Noxell, purchased by Procter & Gamble of Cincinnati; Commercial Credit, merged with Primerica and moved to New York City; Monumental Life, bought by a Dutch insurance giant. And the former National brewery, part of a Wisconsin company that's owned by an Australian brewer.
The corporate shopping spree was fine as long as the economy remained healthy. But service companies, which grew rapidly during the 1980s, provided no solid economic foundation to replace ailing manufacturers. And the two big financial institutions still in local hands -- MNC and USF&G; -- expanded on risky investments in real estate and junk bonds. When the financial and real estate markets collapsed, Alan Hoblitzell and Jack Moseley went down too -- a punctuation to the '80s.
Look around today. Who's left to write the check, get th governor's ear, set the wheels moving? Who are today's leaders?
The same names surface over and over; they are drawn from a few centers of power. From the utilities: J. Henry Butta of Chesapeake and Potomac Telephone Co. and George McGowan BG&E.; From finance: H. Furlong Baldwin of Mercantile bank and Raymond A. Mason of Legg Mason. From the politically connected: Henry Rosenberg of Crown and Willard Hackerman of Whiting-Turner. From the GBC: Mathias DeVito of the Rouse Co. and Decatur Miller, from the Piper & Marbury law firm.
"It's the same short list. And it's getting shorter," says Walters Art Gallery director Robert Bergman, who expects corporate donations to decline this year for the first time in a decade.
Consider: Just nine Baltimore-based companies are on Fortune magazine's 1990 lists of giant industrial and service companies. By comparison, Minneapolis boasts 27 of the corporate giants; Pittsburgh and Cleveland have 17 apiece.
Does that matter? Mr. Trueschler says, "Without CEOs we become faceless."
And even with CEO's, there's no guarantee that power-brokers will emerge.
Take Towson-based Black & Decker. The international toolmaker has about 45,000 employees, but fewer than 1,000 are based at the company's Towson headquarters. CEO Nolan Archibald doesn't even live here. His time is spent strengthening the debt-laden company, commuting from his Potomac home, and working in the nearby Mormon church.
"Black & Decker is a non-player," laments Mr. Trueschler. "We never see Archibald."
And look who's atop USF&G; and MNC today. Norman Blake, who replaced Mr. Moseley, has no history of community leadership, and has excused himself from such matters until he rights the foundering insurance giant. He's even declined to participate in meetings that the Greater Baltimore Committee sponsors annually for the region's new CEOs.
Al Lerner, the MNC mega-stockholder who has assumed the CEO's title, is a Cleveland investor faced with another financial nightmare. Though he was chairman of Equitable Bank for nine years, he wasn't involved in community affairs. Mr. Peck says, "I never met Al Lerner. I've never been in the same room as Al Lerner. I can't believe that."
It comes down to this: Whoever eventually picks up the pieces from corporate Baltimore's fracture, the city won't be the same. Too many companies are headquartered someplace else. Corporate power is too diffuse. "There aren't six companies that make a local economy tick. It's probably 60," says David Gillece, who heads Baltimore's economic development agency.
Mr. Gillece is optimistic about out-of-town owners. They can bring fresh ideas -- and deep pockets -- to Baltimore. As an example, he cites Los Angeles-based Times Mirror Co.'s 1986 purchase of The Baltimore Sun, a deal that enriched the local Abell Foundation and helped bring a $165 million printing plant to town.
And sometimes, the local division of a far-flung conglomerat produces someone like Aris Melissaratos. The jovial Westinghouse vice president grew up in East Baltimore, the son of Romanians who had fled the Communist onslaught. He has immersed himself in community activities, including a program designed to train poor Baltimoreans for jobs at the booming suburban complex around Baltimore-Washington International Airport.
But Mr. Armbruster, of the Goldseker Foundation, sees the issue differently, from his perspective as someone seeking corporate support: "How do you get and keep Times-Mirror's attention? Or Procter & Gamble's? Or Mr. Lerner's? Or whomever he sells the bank to -- you know, Deutschesbank's?"
Others fear that a new breed of corporate executive won't jeopardize a fat paycheck or year-end bonus by wasting time on community affairs. Especially if the executive is reporting to a distant corporate headquarters.
Mr. Peck, the retired banker, says his generation was instilled with the need for community service. But he wonders whether younger workers feel the same way. "People who are 35 years old say, 'Why should I bust my ass on all these community activities, when the people in Richmond don't know whether I'm doing it or not?' "
Mr. Lehman, director of the Baltimore Museum of Art, adds, "People say that new CEOs are based on the bottom line. If that, in fact, is the sole concern of the new executives, we're all in serious trouble -- not just the cultural institutions."
CITY HALL ON THE SIDELINES Over the years at City Hall, William Donald Schaefer built what today would be called a network -- a mutually beneficial coalition of government and business leaders who could deliver when called upon. In the old days, Mr. Schaefer's creation would have been called a machine.
When he became governor, he simply moved the pivot of his machine from Baltimore to Annapolis. The business community still looked to him, and as governor he became involved in Baltimore issues -- the stadium, the light-rail line, the symphony strike -- in a way that he himself as mayor never would have tolerated.
Remember, says the Rev. Joseph Sellinger, the longtime president of Loyola College, you can talk about the loss of Baltimore's business leaders all you want; but only one man really has had power in the last decade, only one man is at the center, and that's William Donald Schaefer. It's his machine. It isn't Alan Hoblitzell's.
Now, Mr. Schaefer is in his last term as governor. In 1994 the man who for two decades has been at the center of change in Baltimore must step down. Yet Kurt Schmoke, his successor as mayor, isn't ready to assume Mr. Schaefer's role, according to business and foundation executives who deal with him. He neither inherited the machine nor built his own.
No one knew quite what to make of the young new mayor of Baltimore when he took office in late 1987. Would he become the new focus of activity?
Clearly, at first, he did not. He scrapped the monthly luncheons that kept Mr. Schaefer in close contact with business leaders. According to some accounts, the executives assumed Mr. Schmoke would come courting. When he didn't, they began calling him. Some say he responded. Some say he didn't.
At the same time, Mr. Schmoke's bad relations with the new governor weren't helping at all. One Schaefer insider describes businessmen quietly calling down to Annapolis to find out whether they could do business with Mr. Schmoke. He was the mayor, after all. Word came back from the governor's mansion: not if you want to keep doing business with me.
The mayor himself acknowledges that he got off to a poor start in his dealings with business people. A series of meetings arranged by the GBC "just didn't go well," he says. "I wasn't connecting."
Particularly compared to Mr. Schaefer, the mayor says, he wasn't faring well at first in forging links with business. He believes that's changing for the better. "It took me a while, but we've got it now."
Some dispute that.
"The mayor doesn't know how to reach out. . . . He never seemed to listen, or if he listened, he didn't like the message," says Mr. Moseley (now living in North Carolina, where he moved weeks after his ouster from USF&G;).
"He's not an executive. He doesn't get things done," says Mr. Trueschler, the BG&E; ex-chairman.
"Schmoke has not risen to be the leader everybody hoped he might," says Father Sellinger.
And even some supporters sound a little defensive.
"He's a different kind of mayor. He's much more available and accessible than people say he is," says Mickey Miller, of Smithy Braedon commercial real estate.
"The business community hasn't quite come to appreciate Kurt's leadership," says attorney Benjamin Civiletti, who goes on to compare political leadership to the art of making meatloaf -- "It's not easy to get the right recipe."
The complaints from business leaders about Mr. Schmoke ca be boiled down to this: He's not accessible, mostly because of his staff, and he hasn't made it clear what he wants from business.
Mrs. Pines, the former Schaefer aide, and no friend of Mr. Schmoke, says, "The corporate community will do nothing unless they trust the political leadership."
REACHING OUT Walter Sondheim, at 82 the grand old man of Baltimore's revival, man who's been advising mayors since before Kurt Schmoke was born, doesn't buy all the pessimism about the future. Change is inevitable, he says. And he predicts Norman Blake and other new CEOs in town will start acting like civic leaders as soon as their corporate problems are solved.
"That's part of corporate life these days," he says. "Now, that sounds like being in favor of fresh air for babies -- which I am -- but it's true."
Maybe he's got a point. Surely all of Baltimore's major companies won't be gobbled up by foreign investors. BG&E; certainly isn't going anywhere. And other local companies can grow into regional or national powers, much like Legg Mason did in the 1980s.
Yet Baltimore's problems are too pervasive for a small coterie of executives to handle.
City leaders no longer can be satisfied by replacing a blighted block with a tasteful, waterside pavilion covered with colorful flags. The great rebuilding projects -- Charles Center, the Inner Harbor -- rescued Baltimore, but similar projects aren't sufficient today. The era of the face lift has passed.
No, the stubborn problems confronting Baltimore today call for more radical surgery. And those problems -- public education, housing, drugs, crime -- require a broader commitment.
"Social problems can't be solved by three or four business people sitting around and deciding to do it," says Barbara Hill, CEO of the Johns Hopkins Health Plan. "You've got to hear it, see it, smell it and taste it. . . . You have to throw human energy
at it rather than money."
"We have no choice but to look to larger numbers of people than we have up to now," adds Mr. Armbruster. "So you're going to have to find ways to nurture leadership from a whole variety of settings.
"You're going to have more people having something to say about the direction of this region. And that means it's going to be messier. You're not going to be able just to decree a new stadium, or a light-rail line."
Corporate Baltimore's upper echelon has recently begun to reach out. Lawyers, accountants, architects, doctors, owners of medium-sized businesses -- all are being tapped for community affairs. Bridges to the Johns Hopkins University and the Johns Hopkins Hospital, two huge institutions with a reputation for remaining aloof, are being built.
Last October, for example, the GBC sponsored a dinner vTC featuring University of Maryland Chancellor Donald N. Langenberg and Johns Hopkins University President William C. Richardson. Decatur Miller, a GBC board member, recalls, "Allegedly, it was the first time the heads of Maryland and Hopkins were together in the same room. Literally, that's probably untrue. But figuratively, it's true."
Today, the university leaders -- both new to their jobs -- sit on the GBC board. They took the seats vacated by Mr. Hoblitzell and Mr. Moseley.
The GBC and major cultural groups also are developing new leaders. The GBC, for example, runs a training program each year for about 20 mid-level managers, including many women and minorities. In monthly sessions, they're exposed to Baltimore's daunting social problems. They spend a night in a homeless shelter, walk the streets of poor neighborhoods and ride a shift in a police patrol car.
Still, the young leaders-in-waiting have been slow to move into positions where they can exert real influence in the community. The GBC's board, restricted to CEOs, is all-male. Group photos of senior executives and directors featured in corporate annual reports have few women and minorities. The Johns Hopkins Hospital includes only one woman and one black on its board of directors and has a separate women's board, recalling an era of white gloves and tea sandwiches. (See story on Page 8.)
Joseph Haskins, CEO of Harbor Bank and one of three blacks on the GBC board, says Baltimore's businessmen have only grudgingly shared power with women and minorities. "I'm a believer in the golden rule -- he who has the gold, rules."
He adds, "When you look around the corporate community, the number of blacks in senior positions is woefully low. In banking, look at the number of blacks at the senior vice president level. I can count them on one hand, with a couple of fingers cut off."
Even if there's a smooth restructuring of power, it will take muclonger to reach a consensus on, and to solve, Baltimore's problems in the 1990s and beyond. Scale makes a difference. It's the difference between raising $1 million with the stroke of a pen or from 100 donations of $10,000. And guiding a group of entrepreneurs can be maddening, like trying to herd squirrels.
Will a new corporate power structure emerge? Baltimore's problems can't wait long for an answer. City finances continue to deteriorate as the murder rate climbs. Governor Schaefer, the city's great champion, is in his last term. The redistricting of the General Assembly will transfer political power from the Baltimore region to the suburbs of Washington.
Mayor Schmoke says he will "maintain" relations with the business leaders who emerge. Governor Schaefer says there's a political job that needs doing because of the vacuum left by the turnover in corporate executives. "It hasn't been filled because the business community hasn't been pulled together," he says.
But even if the diminished business community could be pulletogether, it's hard to see who could summon the clout, the commitment, the ability to get things done.
"In a vacuum," notes Arnie Graf, the former BUILD organizer, "people can rise faster, but the question is, can they deliver?"End of power-17
DAVID ROSENTHAL is a business reporter for The Sun and WILENGLUND is a reporter on the foreign desk.
WHEN IT COMES TO GIVING . . . BALTIMORE'S BIGGEST CORPORATE GIVERS:
USF&G; Corp.. .. .. .. ..1990.. .. ..$3.7 million
Baltimore Gas &
Electric Co.. .. .. .. .1990.. .. ..$3.6 million
MNC Financial .. .. .. .1990.. .. ..$3.6 million
First Maryland Bancorp..1990.. .. ..$1.8 million
Noxell Corp.. .. .. .. .1988*.. .. .$1.8 million
C&P; Telephone Co.. .. ..1990.. over $1 million**
The Rouse Co.. .. .. .. 1990.. over $1 million**
*(most recent figure available)
**exact figures not made public
BALTIMORE'S BIGGEST FOUNDATIONS:
.. .. .. .. .. .. .. .. .. .. .. ..GRANTS
The Abell Foundation.. .. 1988.. ..$4.6 million
Jacob and Hilda
Blaustein Foundation Inc..1988.. ..$2.9 million
@Robert H. and Ryda H.
Levi Foundation Inc.. .. .1988.. ..$2.4 million
Jacob and Annita
France Foundation Inc.. ..1988.. ..$2.2 million
J. H. Pearlstone Jr.
Charitable Income Trust.. 1989.. ..$1.9 million
Aaron Straus and Lillie
Straus Foundation Inc.. ..1988.. ..$1.7 million
@Robert G. and Anne M.
Merrick Foundation Inc.. .1988.. ..$1.5 million
Foundation.. .. .. .. .. .1989.. ..$1.4 million
Foundation of Md. Inc.. ..1988.. ..$1.4 million
(Harry and Jeannette Weinberg Foundation -- With the death last year of Harry Weinberg, this became Baltimore's largest foundation and is among the nation's biggest. It is expected to grant about $45 million a year to the poor, but it is not clear how much of that money will stay in Baltimore.)
Sources: Company and foundation officials, state records, Corporate 500: Directory of Corporate Philanthropy