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Baltimore's Board of Estimates: Is It Minding the Store?

THE BALTIMORE SUN

Three months ago, City Comptroller Jacqueline F. McLean said she was shocked to hear that a woman hired under a consulting contract had done no work for the city.

Mrs. McLean said she had trusted information the mayor gave her when she and other Board of Estimates members approved the contract for fired Pratt Library chief Anna Curry to do consulting work for the mayor's office.

"I'm floored," said the comptroller when told Mrs. Curry was getting paid but doing no work.

Now it comes to light that Mrs. McLean herself pushed a contract through the Board of Estimates in September 1992 to hire a public relations consultant who also apparently does no work for the city.

The checks to the mystery worker went to a hair salon owned by Ms. McLean's relatives and were deposited in two bank accounts -- one apparently set up by the comptroller herself.

She also rushed a lease agreement by the board for a city agency to rent a building she and her husband were selling.

Initially, board members asked no questions, but later rescinded the lease when they discovered the comptroller's family owned the building.

How could this keep happening?

How could questionable transactions get past a board that is made up of the mayor, the city solicitor, the public works director, the city council president and the comptroller?

The questions aren't new. During the mayoral heyday of William Donald Schaefer, the Board of Estimates approved questionable grants to politicians, mortgages to city workers, and multimillion-dollar loans to politically well-connected developers -- that were later never repaid. Council members and others questioned whether the Board of Estimates was scrutinizing contracts adequately.

The board often gives approval with little or no public discussion.

Their public meeting used to follow a secret meeting where they hashed out details for spending tax dollars in a little room on City Hall's second floor. Then, the board filed into the stately Board of Estimates room, where portraits of former mayors look down from the walls, and quickly ran through the agenda.

(The private meetings have since been opened to the press.)

Even today, the Wednesday morning meetings can be confusing to a newcomer, as the board rushes through much of a 50-page-plus agenda, stopping only to hear long-winded complaints from contractors and their lawyers who lost bids to sell the school system a computer or the police department an air conditioning system.

At the end of every meeting there are always a few items -- called "added starters" or "walk-ons" -- that are not on the pre-printed agenda.

Mrs. McLean brought both the contract for the mystery worker and the lease agreement for her family's building to the board as walk-ons at the tail end of regular meetings.

The lease agreement -- to find new offices for health department workers -- appeared so routine that the board secretary turned off the tape recorder -- leaving no formal record of the deal.

It wasn't until after the meeting that Council President Mary Pat Clarke discovered that the address given for the building was phony and that the real address belonged to Mrs. McLean's family business.

Mrs. Clarke -- who also presides over the Board of Estimates as its president -- doesn't like walk-ons because she can't read the fine print in advance.

The Schmoke administration recently had the board approve a $10 million walk-on to hand over financial management, cafeteria and maintenance services in two city schools to a private company. She said she was given no time to read the amended contract before voting.

"I abstained on that vote. It's a multimillion-dollar contract. The ink was fresh," she said.

Ironically, said the council president, the one board member who tried to put a stop to the last minute walk-on items was Mrs. McLean.

"The comptroller had made a big issue of not permitting walk-ons. It's been a big, big issue of hers that everyone has tried to observe," said Ms. Clarke.

Last week, in light of the allegations against Mrs. McLean, Mr. Schmoke sent a memo to city agencies telling them to stop rushing items to the board at the last minute unless they are truly emergencies.

The Board of Estimates -- founded in 1900 -- is mandated by the city charter to approve all city financial transactions, as well as contracts for construction and purchasing.

Mayors have used the board to push through their own agendas, since the mayor controls three of the five votes -- his own, as well as those of his appointed city solicitor and public works director.

The Board of Estimates is "a common system that's used in cities. The problem is not so much with the system but how it's used. In Baltimore a tradition was established under Schaefer for getting things done quickly. One of the legacies of that will obviously be cases like the McLean case and other questionable cases that should have been scrutinized more closely," said Marc Levine, director of the urban studies program at the University of Wisconsin Milwaukee, who is writing a book on the redevelopment of Baltimore during the Schaefer years.

Ironically, said Mr. Levine, many city boards that are similar to Baltimore's Board of Estimates, "were put in place as a response to corruption, machine politics and fiscal crisis that cities faced during the depression. The idea was to provide oversight and to get tighter controls."

Ms. Clarke said she has tried to "professionalize" board meetings since she was elected as city council president. She scrutinizes all items on the agenda several days in advance, drawing up two lists -- one of controversial items and another of noncontroversial items.

But when she disagrees with the mayor, she admits, "I'm outnumbered."

Former City Comptroller Hyman A. Pressman made a career of being outnumbered on the board. He routinely cast the lone "no" vote, opposing out-of-town trips for city workers and no-bid contracts.

During the Schaefer years, it was not uncommon for multimillion-dollar deals to get approved by the board with lightning speed and little or no public discussion. Mr. Schaefer himself would often skip the public session, slipping out of the secret meeting room through a back door.

In 1981, for example, the board called a special meeting to approve the city's largest real estate deal in history -- the sale of the Pulaski incinerator to a Schaefer friend, contractor Willard Hackerman, for $41 million. Mr. Hackerman would then charge the city to incinerate its trash. The sale was rushed through at the special meeting so Mr. Hackerman could take full advantage of a tax shelter, said a finance official at the time. Neither Mayor Schaefer, nor City Council President Walter S. Orlinsky, nor Comptroller Pressman attended the meeting, where the sale was swiftly approved.

Today, the incinerator has become a financial drain on the city -- with Baltimore paying 85 percent of operating costs. And the Schmoke administration can't wait until 1996 when the city's contract with Mr. Hackerman expires.

Sometimes, the board knows what is going on, but the public may not. Even when items for expenditures are prepared in advance and printed on the agenda, the average person can't always decipher the board's own "hieroglyphics" that are difficult to translate if you're not a scholar of board agendas.

In 1985 the board approved $100,000 in grants to a church operated by a Northwest Baltimore politician -- the late Wendell H. Phillips, just at the time he ended a long-time feud with then Mayor Schaefer.

The board agenda mentioned neither the politician by name, nor the source of funds for the grants. The money actually came from a program -- called the Neighborhood Incentive Program -- which requires recipients to match the public dollars with private funds. But the city never asked Mr. Phillips' church to match the grants.

While board approval of most City Hall expenditures is required by law, at least one official in past years snubbed the board altogether and spent money without the body's approval.

Charles L. Benton, Mayor Schaefer's powerful finance director -- now Governor Schaefer's secretary of budget and fiscal planning -- once admitted his disdain for the board.

Responding to questions about his secret authorization of $5.6 million in payments to Schaefer friend Henry J. Knott Sr. for repairs on the Beethoven Apartments, Mr. Benton said:

"I avoid the Board of Estimates like the plague."

Joan Jacobson is a reporter for The Baltimore Sun.

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