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Gary in debt to lobbyist for 1994 loan County executive owes $7,000 to Neall campaign committee; 'Higher standard to meet'; Some GOP colleagues say money should have been repaid

THE BALTIMORE SUN

Because of a typesetting error, Sunday's Anne Arundel edition of the Sun about former County Executive Robert R. Beall's lobbying incorrectly stated the size of the proposed Dorchester residential development. The subdivision near Baltimore-Washington International Airport could have as many as 1,600 homes.

The Sun regrets the error.

Robert R. Neall, Anne Arundel's former county executive turned lobbyist, has parlayed a reputation for fiscal expertise, personal friendships and lavish campaign contributions into enviable access to the most powerful offices in county government.

Neall has turned his standing campaign committee, Bob Neall in '94, into a personal political action fund. Over the past three years, the committee has handed out more than $75,000 to state and local Republican candidates, including generous donations to the Republican County Council majority.

A prime beneficiary has been his successor and close friend of more than two decades, County Executive John G. Gary, whose election committee owes Bob Neall in '94 almost $7,500 on a 1994 campaign loan.

"It raises questions when a prominent elected county official is indebted to a lobbyist for any reason," said Deborah Povich, executive director of Common Cause Maryland, a citizen watchdog group. "It sets up a whole unseemly appearance of insiders dealing with each other in a manner that skirts propriety. These loans get close to the line, if not cross it."

Gary dismissed the possibility of conflict of interest, saying, "Bobby Neall didn't have to loan me any money to have access to me. I will pay off my loan. My intention has always been to pay it off in thirds as I get the money."

But Neall's deep personal and financial ties to the county's Republican leadership may soon be used to transform more than 800 empty acres in the center of Anne Arundel into a $300 million development of homes and townhouses.

As soon as next month, the Gary administration plans to introduce legislation authorized by the General Assembly this year that would for the first time allow Anne Arundel to issue bonds on behalf of specific developers to help finance infrastructure. One company that stands to benefit is the Driggs Corp., a Prince George's County construction company that is one of Neall's most important clients.

If approved by the County Council, Anne Arundel could issue $15 million in bonds to help pay for roads, sewers and parks around Dorchester, a 600-home development that Driggs hopes to build near the Baltimore-Washington International Airport.

The bonds would be a low-interest loan to Driggs, which could save millions of dollars in interest payments. The money would be paid back over 30 years through a special tax district at no cost to the county.

"I am very circumspect about the causes I take on," Neall said. "I think Dorchester is going to be a wonderful project for what is going to be the future breadbasket of the county."

In the 1994 campaign, Gary presented himself as the heir to Neall's legacy of fiscal restraint. But the respect extended beyond politics. On a personal level, according to one administration official, "John would take a bullet for Bobby."

As the campaign wound down, Gary found himself in a tight race with Linthicum Democrat Theodore J. Sophocleus, who was claiming a commanding lead. Gary already had received a $5,750 contribution from Bob Neall in '94, close to the $6,000 limit set by state law.

Then, with less than two weeks before election day, Sophocleus received a cash infusion. Orioles owner Peter G. Angelos made a $15,000 personal loan to the Sophocleus campaign at a favorable interest rate, 1 percentage point below the prime rate.

Last-minute help

Gary needed help. On Nov. 3, five days before the election, Neall authorized his committee to lend Gary's campaign $12,000. The interest rate was 8 percent, a quarter of a percentage point above prime rate.

Puzzled by his opponent's claim of certain victory, Gary used the money to pay for a last-minute poll that showed he was still very much in the race.

"We needed to do it then," Gary said. "And we didn't have the money."

Most important, the poll revealed that pension reform was a hot issue among voters. Gary took the cue. He flogged Sophocleus in the campaign's final days for voting to increase his own pension as a council member.

Gary won with 53 percent of the vote.

Sophocleus, who is considering a run for office in 1998, has paid off the Angelos loan. Gary has chipped away at the principal of his loan, but his committee, which has a cash balance of $32,531, still owes $7,492, according to the most recent campaign disclosure reports.

Maryland law requires campaign loans to be paid off within four years.

Several of Gary's Republican colleagues said the outstanding loan between lobbyist and county executive, who has authority over land-use issues, presents at least the appearance of a conflict of interest.

"He didn't loan me any money, but if he had, I would have paid it back," said Councilman William C. Mulford II, an Annapolis Republican who shares office space with Neall on Conduit Street.

Said Councilman Bert L. Rice, an Odenton Republican: "It was not something I was aware of. I think the loan should be paid off. He [Gary] should clear that."

Gary said two recent fund-raisers brought his campaign what little money it has. "This time next year, it will be paid off," Gary said. "He's not pressing me for it."

A bill approved in the General Assembly this year added Anne Arundel to a list of five Maryland counties able to issue bonds to benefit specific residential developers. Neall testified in favor of the legislation as a lobbyist registered with the state Ethics Commission representing the Driggs Corp.

Essential GOP support

The bill received essential support from Anne Arundel's House delegation, chaired by Del. Phillip D. Bissett. The Edgewater Republican, who sponsored the legislation, received $4,000 from Neall's committee in 1994. Republican Sens. John A. Cade and C. Edward Middlebrooks, Anne Arundel legislators who also endorsed the bill as part of a unanimous county Senate delegation, received $6,000 and $2,000, respectively, from Bob Neall in '94.

Driggs interests in Anne Arundel extend beyond Dorchester. The Capitol Heights company also is a regular bidder on county road projects. Since February, the company has paid Neall at least JTC $15,000, according to state lobbying activity reports.

The County Council would have to approve bonds specifically for Driggs, doing business as the Dorchester Limited Partnership.

By getting a lower rate and not spending its own money up front for improvements, Driggs could sell the homes for less. The $15 million worth of infrastructure for Dorchester's first phase, which will include a swimming pool, clubhouse and other amenities, will come to roughly $18,600 per home.

"That could make the difference between someone being able to buy a house and not being able to," Gary said. "This could be housing that our county employees can purchase. If we make it more affordable, we open up the market."

Neall said he has not lobbied for the Driggs Corp. in Anne Arundel. But he said that if Gary submits the bond legislation, he would register with the county Ethics Commission to lobby the council for Dorchester.

Ethics law loophole

A loophole in Anne Arundel's ethics law could allow that. The code prohibits former employees from lobbying the county in areas where they once had supervisory powers.

As county executive, Neall had authority over all county business, but did not specifically handle issues involving Driggs.

"I feel that I have a higher standard to meet than others because these folks know me," Neall said. "Influence is a hard thing to measure. But I know that if I asked for anything untoward it would be ridiculous."

As for the loan to Gary, Neall said: "It will be taken care of in due course in a lawful way."

The County Council has its own substantial financial ties to Neall.

All four Republicans on the council, who have a one-vote majority, have received campaign contributions from Bob Neall in '94. Three, Diane R. Evans, Mulford and Rice, received $2,000 each in 1994.

Neall raised more than $250,000 between 1990 and 1994 for a re-election campaign that never happened. He has used the money instead to promote fellow Republicans, many of them friends. Gary said Neall disbursed most of his campaign funds as "the titular head of the county's Republican Party."

"I gave out the bulk of it while I was a sitting county executive who didn't know what his next job was going to be," Neall said. "I wanted to leave the government in the hands of people I trusted to carry on what I was doing."

Said Evans, chairwoman of the council who worked for Neall when he was a delegate: "His support was very important to us, and is still important to us as fellow Republicans."

Pub Date: 9/15/96

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