New ethics panel set up Governor establishes commission to study health contracting; Prosecutor's budget grows; Safeguards ordered on state payments to public officials


Spurred by the ethical violations of ousted Sen. Larry Young, Gov. Parris N. Glendening established a commission yesterday to examine the state's practices in awarding millions of dollars each year in health care contracts.

The governor's decision is in line with a recommendation by the Joint Committee on Legislative Ethics in its report on its investigation into the allegations that led to the Senate's expulsion of Young. Among those charges were several relating to payments Young received from health care companies that had been seeking state business.

In a separate but related action, Glendening announced he would increase the budget of the state prosecutor's office to help deal with a heavy volume of ethics-related cases. The governor also said he would immediately introduce new safeguards to the procurement process, including controls on state payments to public officials.

Glendening's executive order came just two days after The Sun reported that a grand jury had issued a subpoena to the governor's office seeking campaign fund-raising records concerning two companies whose ties to Young were cited by the ethics committee.

Ray Feldmann, a spokesman for Glendening, said the timing of the announcement was entirely coincidental. "This executive order has been in the works for weeks," Feldmann said.

The order establishes an 11-member commission to do a formal review of Maryland's health care contracting and bidding procedures. The panel will be asked to make recommendations on how to avoid conflicts of interest or improper influence in the procurement process.

Glendening gave the commission a deadline of Dec. 31 to submit a final report.

The state's health care procurement process has come under scrutiny in the wake of reports that Young, a West Baltimore Democrat who was a close Glendening ally, helped companies win contracts at the same time he was receiving consulting fees from the firms. The reports, sustained by an ethics committee probe, led to Young's expulsion in January.

Last month, The Sun reported that Lanham-based PrimeHealth used Young's political clout with the Glendening administration to help it win a contract that has netted the firm at least $14.5 million. The subpoena came in connection with a federal grand jury investigation into Young's connections with Prime and other health care companies, including Merit Behavioral Care Corp. of New Jersey.

Merit was involved in one of the most ethically embarrassing incidents of the Glendening administration -- an airplane trip it provided to the governor for a New York fund-raiser attended by Young. Glendening later returned all proceeds from the fund-raiser, which came at a time when Merit was unsuccessfully seeking a state contract.

The governor's actions yesterday won praise from the General Assembly's presiding officers, who requested the establishment of the commission in a Jan. 27 letter.

"The governor is going about it in the right way," said House Speaker Casper R. Taylor Jr., a Cumberland Democrat. He said the executive branch commission would be an appropriate counterpart to a separate legislative panel looking into ethics issues.

Senate President Thomas V. Mike Miller said it was a "much-called-for executive order."

"Obviously the governor's concerned about the headlines in The Sun the other day that his records are being subpoenaed," said the Prince George's County Democrat. "It shows he's trying to get it behind him as quickly as possible."

The House minority leader, Del. Robert H. Kittleman, welcomed the commission but said it would be better if the problems that made it necessary had never occurred.

"It's not so much an attempt to rectify the abuses as it is to distract attention," said the Howard County Republican.

The commission will include representatives of the Board of Public Works, the Department of Health and Mental Hygiene, the attorney general's office, the State Ethics Commission, the Senate, the House of Delegates and the health care sector. The chairman will be chosen from among four citizen members of the commission.

Feldmann said the governor hopes to name the chairman and other commission members within a week.

In addition to launching the commission, Glendening directed state agencies to take a series of steps before entering into any agreement to pay state funds to a Maryland, federal or local public official.

The order requires that any such payment be made under a written contract that has been submitted to the ethics agency that oversees the official. The contracts, as well as a list of companies that receive public funds, would be available to the public.

That directive is an apparent response to another of Young's business dealings. In that case, Coppin State College awarded Young's LY Group a verbal consulting contract under which he received $38,500 without any verification that he had performed actual work for the college.

Glendening also announced yesterday that he is proposing a $107,942 supplemental budget increase for the state prosecutor, who is also looking into the Young matter.

State Prosecutor Stephen Montanarelli called the decision "wonderful news," adding that the governor had provided all the money he sought in the request that was prompted by a heavy load of ethics cases.

"We can hardly keep our heads above water," said Montanarelli. The extra money will let him hire two law clerks and a full-time investigative auditor to trace the flow of money, he said.

Kittleman said he welcomes the decision to boost the prosecutor's budget and urged the governor to throw his support behind a Senate bill that would give the prosecutor the power to issue subpoenas and grant immunity. A similar measure died in a House committee.

Pub Date: 3/07/98

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