Former Baltimore County Councilman Gary Huddles is under investigation by the state prosecutor for the alleged theft of $50,000 in left-over campaign funds that he used to cover stock investments.
The investigation is near an end and is expected to lead to Mr. Huddles' indictment by a Baltimore County grand jury, perhaps as early as today, according to Robert B. Schulman, Mr. Huddles' lawyer. Mr. Schulman said the charges probably would include theft of campaign funds, misappropriation of campaign funds and failing to pass the transactions through his campaign treasurer.
The charges arise from a probe by State Prosecutor Stephen Montanarelli of the 52-year-old former councilman's use of the money, reportedly to cover margin calls on his stock investments when the stock market plunged in October 1987.
Mr. Schulman said yesterday that once he learned of the investigation, he tried to discourage Mr. Montanarelli from pursuing the matter because of the vague nature of the state campaign financing law.
But Mr. Schulman said he received a letter back telling him that his arguments were unpersuasive and that he could expect his client to be charged.
Mr. Montanarelli refused to comment yesterday on the report, saying yesterday that "the grand jury meets tomorrow."
Mr. Huddles had about $90,000 remaining in his treasury from a testimonial affair when he decided not to seek re-election in 1986. That decision came after revelations about an unpaid $60,000 loan from convicted savings and loan operator Jeffrey Levitt, the imprisoned former head of Old Court Savings & Loan.
Disclosure of the loan destroyed Mr. Huddles' political career and his aspirations to run for county executive or Congress in 1986. He has withdrawn from public life to practice law since then.
Mr. Schulman said the former Pikesville politician withdrew the $50,000 in several checks but repaid the money with interest in January, 1989 and reported the entire transaction on his campaign finance report last summer.
Between January and June, 1989, the former councilman returned $30,000 of the $90,000 in his campaign treasury to contributors who requested refunds and distributed the remaining $60,000 among various charities, Mr. Schulman said.
Mr. Huddles declined to comment yesterday on the report of an imminent indictment, but Mr. Schulman blasted the investigation as "outrageous" and accused Mr. Montanarelli of using the probe to "make his office visible because the legislature wants to terminate it."
State election laws remain vague on the subject of politicians borrowing from their campaign treasuries, and the General Assembly has not specifically abolished the practice, Mr. Schulman asserted.
Last January, during a review of the unsuccessful effort to clarify and tighten campaign financing laws, Delegate Elijah E. Cummings, D-Baltimore, was one of several legislators on the House Committee on Constitutional and Administrative Law.
"The law is so unclear the state prosecutor can be looking into your affairs, and he has a whole pond to fish from," Mr. Cummings said. "Sometimes you feel like you have to protect yourself against yourself."
Mr. Huddles, who served four terms on the council, was periodically involved in controversy and has been investigated several times by federal and state prosecutors but has not been accused of a crime.
In 1986, the county Board of Appeals reversed Mr. Huddles' 1984 decision to deny high-density zoning for one tract near Bonnie View Golf Course while granting it for a competing tract later found to be owned by Levitt-controlled firms.
After reports of the loan from Levitt to Mr. Huddles surfaced, the U.S. attorney's office subpoenaed Mr. Huddles' top aide and the councilman's records from the 1984 county-wide rezoning process, but no further action was taken.
The 1986 Preston Report on the savings and loan crisis said that Levitt, now serving 35 years in prison for stealing millions from depositors, even kept the advance interest and settlement fees on the Huddles loan.
Mr. Huddles paid $84,900 in principal and interest in June, 1986, to clear the loan after published reports questioned whether it was connected to a zoning decision.
Mr. Huddles, who was chronically late filing campaign finance reports, was fined several times for his tardiness over the years after warnings from the elections board and the state prosecutor's office.