Maryland Port Director Michael P. Angelos resigned yesterday, saying he could not effectively perform his job while under federal investigation for possible insider trading in a local bank stock.
Mr. Angelos' resignation came a day after he was placed on an indefinite paid administrative leave by Gov. Parris N. Glendening, who met with his port chief for two hours on Monday. The meeting between Mr. Angelos and the governor focused on an investigation by the U.S. Securities and Exchange Commission into Mr. Angelos' trading of Baltimore Bancorp stock prior to its sale last year.
In an interview yesterday, the 43-year-old Mr. Angelos denied any wrongdoing. He said he was leaving the job because he did not want to hurt the new governor, who has been plagued by a series of political problems during his first two months in office.
"I didn't want to cast any shadow on the governor," Mr. Angelos said. "I don't want to be a burden. If there's an inquiry, people would start losing confidence in my ability."
Mr. Angelos became the fifth director of the Maryland Port Administration in the past 10 years, a turnover rate that has signaled instability to much of the shipping industry.
Mr. Angelos' resignation, effective April 1, came just a day after Glendening aides announced that the port's second-in-command, Deputy Director G. Gregory Russell, had stepped down. At the time, the governor's staff could provide no explanation.
Mr. Angelos said yesterday that Mr. Russell, who was a member of the Baltimore Bancorp's board of directors during the period of its sale to New Jersey-based First Fidelity Bancorp., had resigned Feb. 20 to pursue private business interests.
The resignation, not previously disclosed, was unrelated to the SEC investigation, Mr. Angelos said.
The departure of the port's top two officials threw the agency into turmoil. Mr. Glendening promised yesterday to name an acting director within the next day or two.
"We are in the process right now of consulting with the leaders in the port community about a replacement," the governor said, adding that he's talking with former U.S. Rep. Helen Delich Bentley, a Republican from Baltimore County.
No Bentley commitment
Mrs. Bentley said late yesterday that she would "always do everything I can to help the port," although she declined to say whether she would accept the post.
In his own defense, Mr. Angelos said yesterday that he had bought and sold thousands of shares of Baltimore Bancorp stock, starting in mid-1992 and continuing until the announcement that it would be merged with First Fidelity, causing the stock to rise significantly.
But he emphatically denied any wrongdoing or that he had received confidential information from people inside the bank. He said his relationship with both Mr. Russell and Baltimore Bancorp Chairman Edwin F. Hale Sr., a longtime friend, had apparently raised concerns with the SEC.
An early appointment
Mr. Russell was appointed deputy director by Mr. Angelos just weeks after he became executive director in May 1994. Mr. Hale is also a trucking and shipping company executive who does extensive business with the port.
Mr. Angelos, in his letter of resignation, stressed that his "purchases of stock were lawful and appropriate." He said his attorney, James P. Ulwick, had spoken with the SEC and told him that no charges were "pending or contemplated at this point."
Mr. Glendening said yesterday that he never received enough information from Mr. Angelos to determine whether there was any substance to the SEC investigation.
"I asked him to come in and give us documentation that there was no problems," the governor said. "He came in and made some presentations to us, but said he had come from the private sector and -- to use his wording -- was not sure that this was worth it."
Long probe possible
Mr. Angelos noted that the SEC investigation could "drag on for a lengthy period," adding: "The port simply cannot afford to have its CEO unavailable for an indefinite period of time."
Instead, he said, he decided to pursue opportunities in the private sector. Mr. Angelos, who came to the MPA in 1990 from the ITO Corp., said he had been talking with two international steamship companies for months about returning to private industry.
He said Mr. Russell likewise wanted to pursue private business opportunities.
But Mr. Russell had also come under fire lately. Two months ago, it was reported that he had led the state's negotiations in a $3 million deal to buy an Inner Harbor cruise ship terminal site at the same time he, together with four other investors, were attempting to buy the nearby Harrison's Pier 5 Hotel. The development of the cruise ship site could help lure tourists to the hotel and other neighborhood businesses.
At the time, Mr. Angelos defended Mr. Russell's dual role.
But yesterday, Mr. Angelos cited a State Ethics Commission opinion that raised serious concerns about Mr. Russell's involvement in the hotel deal. He said he subsequently asked Mr. Russell to choose between the two roles.
News of the resignations of the port's top officials spread quickly throughout the shipping industry yesterday, with some people expressing concern about the agency's frequent turnovers.
"It's always been an Achilles heel for the port," said one former port official. "They were finally trying to convey stability and send the message that we now have a management team in place."
"Change in management, whether the port director or someone else, is always a problem for those of us who deal with them, particularly in the beginning," said Chris Kritikos, president and CEO of Ceres Terminal Inc., a Weehawken, N.J.-based international stevedore and terminal operator which uses the Dundalk Marine Terminal.
During the past two years, the port of Baltimore has reversed a decade-long pattern of declining cargo volume. And Mr. Glendening said yesterday that he wanted to make sure that its recent success was not set back.
"The port has been very effective. We have started to show real progress in terms of bulk numbers, as well as the harmony that is needed if we are to succeed," Mr. Glendening said. "This is a disappointment to me that we have this change at this time."