Ethics panel launches inquiry Young's businesses, use of public money will be examined; Criminal probe also begins; Senate president says he has received similar complaints

THE BALTIMORE SUN

Maryland's top lawmakers announced yesterday they have launched an ethics probe into state Sen. Larry Young and his outside business interests, and law enforcement sources said that the State Prosecutor's Office has opened a criminal investigation into the senator's conduct.

The probes come in response to a two-month investigation published by The Sun yesterday that reported the powerful politician has been capitalizing on his public position to generate consulting and other fees from institutions and health care firms with millions at stake in the General Assembly.

The paper also reported that Young -- who chairs the Senate Finance Health Subcommittee -- has been using publicly paid employees to work for several corporations he controls, while using tax dollars to subsidize the rent and phone bills of those corporations.

In an hourlong news conference yesterday morning, Young denied the report and said he planned to sue the newspaper.

He accused reporters of spying on his staff, wiretapping his phone lines and carrying out a racist campaign against him and other African-Americans.

"It's very clear to me there are double standards," the West Baltimore Democrat said. "I believe there is a racial component in this."

Young's staff barred the two Sun reporters who wrote yesterday's article from attending the news conference.

John S. Carroll, editor of The Sun, declined to discuss the threatened lawsuit because it hasn't been filed, and he said The Sun's article was a good example of a newspaper's fulfilling its mission in a democratic society -- to scrutinize government.

"Our sole motive is to present significant information about how a public official conducts himself in public office," Carroll said.

"This is our job, and we are committed to doing it without prejudice or favoritism of any kind."

Yesterday's newspaper report prompted Senate President Thomas V. Mike Miller to call for the Joint Legislative Ethics Committee to examine Young, his business interests and whether he has abused his office and violated state conflict-of-interest laws.

The panel, staffed by six delegates and six senators from both political parties, will investigate the senator and then prepare a final report before the start of the 1998 legislative session in January.

The ethics panel can take a number of steps, from clearing Young to sanctioning him or expelling him from the Senate.

Miller said he was concerned by The Sun's findings.

"Public office is a public trust," he said. "In order for the Senate to continue to function as a legislative body, we need the confidence of the electorate."

Miller said he told Young earlier that he planned to convene the ethics panel.

Miller said he had been receiving complaints from legislators and others about Young's outside business interests, prompting him to ask Young in August to explain the roles he plays in several corporations he controls.

Launching a legislative probe, Miller said yesterday, is the best way to determine whether Young has crossed any ethical lines or whether he has been operating within the provisions of the state's ethics laws.

"It is time that an independent forum look into these matters," Miller said, "and clear the air once and for all."

Del. Kenneth C. Montague Jr., a Baltimore Democrat who will preside over the ethics panel, said committee members will carefully comb through the facts before reaching any conclusions.

"The charges themselves, if they were confirmed as reported, could be very serious," Montague said. "But there are some gray areas, and certain specific facts could change the tenor of everything."

Young said he looks forward to the ethics investigation.

"I think the president's taking the right action," Young said yesterday during Alan Prell's WBAL radio show. "I welcome the opportunity to fully answer these allegations."

Also yesterday, law enforcement sources said they have opened a criminal investigation into Young's conduct, examining his outside business interests and his legislative expenses, which are paid by Maryland taxpayers.

The sources said state investigators have already reviewed rent, phone and other expense records for Young's 44th District office at 200 S. Arlington Ave. near the B&O; Railroad Museum, and they are starting to question former members of Young's staff.

The investigators are focusing on whether Young violated state criminal statutes, the sources said.

State Prosecutor Stephen Montanarelli declined to comment yesterday.

"We can't discuss confidential matters within our office," he said.

Sen. Michael J. Collins, a Baltimore County Democrat who will co-chair the ethics panel, said he and other members of the committee will work with any law en- forcement agencies that decide to investigate Young.

"We will go wherever the law and the inquiry takes us," Collins said.

He said the committee could investigate several areas, including whether Young used the "prestige" of his office for personal gain and whether he properly disclosed his ties to institutions, health care companies and others with business interests pending in the state.

"There are some very serious matters discussed in the article," Collins said.

jTC The Sun reported yesterday that Young has set up three corporations in his legislative district office -- LY Group, the National Black Health Study Group and American Advocate.

The LY Group has been receiving as much as $7,000 a month in consulting fees from Merit Behavioral Health Corp., a New Jersey company that has bid on millions of dollars in state contracts, records show.

Merit also gave Young's National Black Health Study Group $25,000 to sponsor a conference in Las Vegas last month.

LY Group has also received $30,000 in consulting fees from a U.S. Department of Energy grant that Young first proposed, and the senator has received $33,500 in consulting fees from Coppin State College, which receives $13.8 million annually from Maryland.

Together, The Sun reported, Young's corporations have generated at least $165,000 in consulting and other fees from public institutions and health care firms with millions in state business at stake.

To help pay the rent and phone bills of his corporations, the paper reported, Young has been using tax dollars, and he has been using publicly paid employees to work on his corporate staff.

Public interest advocates said they were troubled by Young's reported activities.

"My first reaction is that the public is the loser in a situation like this where, at the very least, you have the appearance of impropriety," said Kathleen S. Skullney, executive director of Common Cause of Maryland.

Skullney said she had recently reviewed the financial disclosure statements filed by Young and other top legislators with the state Ethics Commission and said it was "very troubling" to find that Young had not disclosed his consulting arrangement with Merit.

"There were no disclosures about this whatsoever," she said.

Sen. Thomas L. Bromwell, chairman of the Finance Committee on which Young sits, said he was "shocked" by some of The Sun's findings. "There's certainly some real implication of impropriety here," the Baltimore County Democrat said.

Bromwell said he was particularly concerned that Young was reportedly using tax money to pay for some of his business expenses. In addition, he said Young should have disclosed his consulting fees from Merit, a major mental-health provider in Maryland.

Bromwell said he wanted to speak with Young before passing judgment.

"I haven't heard his side of the story," he said.

Miller, the Senate president, said he was particularly concerned that Young has been collecting consulting fees -- some as high as $300 an hour -- from Coppin State College, a school in a poor section of the city that relies heavily on public funds.

"Taxpayers subsidize our state colleges," Miller said. "If money is received, it should be $6 or $10 an hour, working on the college campus, not $300 an hour as an outside consultant."

Pub Date: 12/04/97

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