Legislative panel gives final OK to aid package for radio stations Some state lawmakers have called loans a political payoff


A legislative oversight committee gave final approval yesterday to a $500,000 assistance package for the owners of a chain of radio stations, dismissing suggestions that the financing was a Glendening administration attempt to curry favor with a media outlet.

The Legislative Policy Committee voted 15-7 to approve the financial package for a company controlled by the principals of Radio One Inc., which owns four stations in Baltimore and three in Washington.

The company is moving its headquarters from Washington and is using the state funds to help pay for its purchase of an office building in Prince George's County.

Some legislators have portrayed the package as a political payoff to entrepreneur Cathy Hughes, co-owner of the stations. Two of Hughes' stations, WOLB-AM in Baltimore and WOL-AM in Washington, carry black-oriented talk shows that frequently touch on political topics.

Among the politicians who regularly appear on the stations are state Sen. Larry Young, a Baltimore Democrat, and Sen. Decatur W. Trotter, a Prince George's Democrat, both strong supporters of the package and political backers of Gov. Parris N. Glendening.

James T. Brady, the state economic development secretary, said the package helps achieve three of his department's goals: attracting corporate headquarters to Maryland, creating jobs and assisting minority-owned businesses.

The package marks the first time the state has tapped into its Sunny Day Fund to assist a minority-owned company, state officials said.

"Much of what we do is symbolic," said Senate President Thomas V. Mike Miller, a Prince George's Democrat who voted for the package. "I think this loan sends the right message to the minority community in the state, that they do have a place at the table."

The policy committee postponed a vote on the Radio One proposal over the summer amid concerns about some aspects of the financing. State economic development officials have since revamped the proposal, ensuring, for example, that state funds will go to a corporate entity, not the company's two owners.

Even with the changes, some members of the committee disapproved yesterday.

"This is talk radio with a strong political orientation that is directly involved in state politics," said Del. Robert L. Flanagan, a Howard County Republican.

Flanagan said he has never listened to the company's stations but added, "I would object even if it were a radio station whose views I supported."

Del. John S. Arnick, a Baltimore County Democrat, also objected, saying the financial package could give lawmakers leverage over the station's content.

"When you have the state making loans to newspapers or radio stations, the next step is having people [in state government] saying, 'Don't say negative things about me,' " Arnick said.

Supporters of the project said such worries were unfounded, noting, for example, that The Sun's corporate owners received tax breaks when they built its new printing plant in Baltimore.

"If Time Warner came to town and wanted to build a facility to employ hundreds of individuals, we'd probably approve it," said Del. Howard P. Rawlings, a Baltimore Democrat. Rawlings noted that he supported the package even though some commentators on WOLB have been critical of his actions in office.

The aid package approved yesterday includes two loans to the radio company, for $400,000 and $100,000.

The company has said it will create 40 jobs by 2002, bringing its work force to 190, and that it will invest $4 million in its new headquarters by the end of 1999.

If those conditions are met, the state will forgive the $400,000 loan.

The company is receiving the $100,000 loan at a favorable rate of 6 percent. Much of the interest on that will be deferred as long as the company meets its employment and investment goals.

Other dissenters included Sens. Walter M. Baker of Cecil County, Edward J. Kasemeyer of Howard County, Norman R. Stone Jr., of Baltimore County and Del. Thomas E. Dewberry of Baltimore County, all Democrats.

Sen. F. Vernon Boozer also voted against the loans, saying the amount of state funds was not justified by the number of jobs promised. He said a vote for the financing package would send a bad signal at a time when the public is concerned about possible ethical lapses by legislators. His remarks were a clear reference to the continuing investigation by the legislative ethics committee of Young's business dealings, which was prompted by an article in The Sun this month.

"Right now, we're under a cloud," said Boozer of Baltimore County, the Senate Republican leader. "We should all consider that members of the legislature are connected with this thing. I'm not pointing a finger at anyone, but perception is everything."

Pub Date: 12/17/97

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