Maryland prosecutors have filed documents outlining in remarkable detail a protection racket that they say operated in the Baltimore liquor board, generating thousands of dollars in payoffs to liquor inspectors and to the politically connected mastermind who put it all together.

The papers filed by state Prosecutor Stephen Montanarelli's office since the indictment May 7 of six people in an investigation of the city Board of Liquor License Commissioners portray a system of rewards and punishments. Those who paid were protected and warned of planned raids by liquor inspectors or the police. Those who didn't pay faced repeated raids and violation notices.

Some liquor inspectors routinely collected cash or even sexual favors in return for protecting certain bar owners. The payoffs ranged from fine cigars and $50 restaurant gift certificates to $1,000 in cash, according to the documents.

As a bonus to those who paid them off, the same inspectors systematically harassed owners of competing bars not in on the scheme, the documents allege. And, prosecutors contend, for those liquor inspectors who cracked down, even unwittingly, on a "protected" bar there was another kind of penalty -- they were threatened with being fired.

The documents were included in court filings that are part of the disclosure process leading to the trial in September of the six people -- including the board's former chief inspector, Anthony J. Cianferano and William J. Madonna Jr., a 46-year-old former bar owner and one-time state delegate. Included in the documents arepartial transcripts of wiretaps of key figures in the probe, a 155-page affidavit to justify the wiretaps and a 19-page memorandum, known as a bill of particulars, outlining the alleged conspiracy.

Transcripts of the wiretaps show that the defendants openly discussed their illegal activities in the same conversations in which they warned each other of possible wiretaps. In one conversation recorded by prosecutors, Cianferano is heard instructing a city liquor inspector on how to tip off a bar owner about an impending raid.

"What you should do is call him up and ask him to call you back from a pay phone," he says, according to a transcript of the wiretap.

Perhaps the most unusual aspect of the documents filed by prosecutors is the light they shed on the extraordinary influence wielded over the board and its inspectors by Madonna, who prosecutors allege virtually controlled the agency, even though he held no title or official position there.

According to the affidavit, one former inspector told investigators that his primary job wasn't to enforce the liquor laws but "to create revenue for Madonna by soliciting and accepting bribes."

Appointment of inspectors

Madonna, prosecutors have charged, controlled the liquor board controlling the appointment of liquor inspectors -- including Cianferano, who ran the inspection unit. At times, Madonna would not even bother with Cianferano. Instead, prosecutors say, he issued orders directly to inspectors.

On one occasion, court-approved wiretaps capture a former state senator, John A. Pica Jr., calling Madonna to ask him about the status of a liquor license application.

Until his indictment, Madonna held a job with the state Lottery Commission. He was once the owner of two taverns in the city regulated by the liquor board and owned a video poker machine business. His influence with the board apparently stems from the patronage of state Sen. Barbara A. Hoffman of Northwest Baltimore and Baltimore County, who acknowledges that she routinely relied on Madonna's recommendations for appointments to liquor board jobs she controlled.

Hoffman helped Madonna win a job with the state lottery as a liaison with ticket agents around the state, a job he resigned from just before the indictments were announced. Last year, she was behind an unsuccessful effort to have him appointed to the liquor board's top administrative job.

Senator to testify

Hoffman, who is scheduled to testify for the prosecution in the case, says she was duped by Madonna and had no idea of a protection racket of the sort described by investigators. "I guess I just got snookered," she said.

Cianferano, Madonna and the four other defendants all have pleaded innocent to the charges of bribery and conspiracy to thwart enforcement of the liquor laws. A trial is expected to start in the fall.

Asked for comment on the new allegations, Gary Bernstein, Madonna's lawyer, called them "absolutely incredible. I find that hard to believe. I'm astounded to hear that."

Cianferano's lawyers declined to comment.

Payoffs and betting

The new details include:

Two liquor inspectors, Donald J. Harlow and Donald Cassell, were collecting regular payoffs from nearly two dozen bars and restaurants, according to the prosecutors' memorandum.

Cianferano, the chief inspector, collected cash payments from the owners of eight bars over a nine-year period ending in 1996, the documents say.

Former Delegate Madonna was placing illegal sports bets, according to the affidavit and wiretaps.

Cianferano had his own sports betting operation, the documents allege, and at one point was reprimanded by his superiors for conducting his gambling business at the liquor board office. The documents further allege that Cianferano personally collected the receipts from video poker machines that Madonna ran at bars in the city. The two have not been charged with gambling violations.

Liquor inspectors routinely pressured bar owners to buy tickets to political fund-raisers for Hoffman and then-Senator Pica, the prosecutors' memorandum says. Both Pica and Hoffman said they were unaware that liquor inspectors were pressuring bar owners to buy tickets to political fund-raisers.

Pica said that any allegations of his involvement with liquor board corruption are false and the desperate claims of "people who are in trouble."

"I've never even been to the liquor board. I don't know where it is," said Pica.

When Pica was chairman of Baltimore's state Senate delegation, he dealt with liquor board legislation in the General Assembly. In 1994, he formed a task force to review the city liquor board's operations.

In 1996, one of Pica's political allies, Julian L. Morgan Jr., was appointed to the board's top administrative post. When Pica resigned from the Senate on Jan. 1, 1997, citing personal reasons, Morgan immediately resigned his liquor board job. It was at this point that Hoffman sought to have Madonna named to the post.

Hoffman said she never asked liquor inspectors to sell tickets to fund-raisers. She did say that she had hired Cianferano, who is also a bricklayer, to do some work on her house, but said that he did it on his own time and that she paid him for it.

Wiretapped conversations

The new filings indicate that prosecutors plan to make extensive use of hundreds of hours of wiretapped telephone conversations, including a Feb. 10 conversation between the liquor board's then chief inspector Cianferano and Madonna.

In their conversation, the two complained openly about the fact that police kept raiding the very Frederick Avenue bar, the Twilight Social Club, that they were trying to protect.

Madonna: "I mean what is it with these m- - -, really?"

Cianferano: "I don't know, but it's all coming from the police."

Madonna: "I know, I mean, Christ, they can't get the drugs off the street, but they go around with these cadets."

Those involved in the alleged protection scheme, the affidavit states, "targeted liquor establishments that were involved in some sort of violation. The owners would then be contacted and informed that it was their choice to either stop the unlawful conduct or negotiate a protection payment plan that they could afford."

Prosecutors said that two liquor inspectors, Harlow and Cassell, alone were collecting protection payments from 23 bars and restaurants. One former inspector, the documents indicate, received gifts "including sexual favors from some of the prostitutes" employed by a Fells Point bar owner.

Along with Hoffman, the most prominent political figures mentioned in the documents are Pica and his father, John A. Pica Sr., a former City Council member and one-time East Baltimore political boss. The elder Pica is one of 17 unindicted co-conspirators identified by prosecutors.

Unindicted co-conspirators are people who prosecutors believe were involved in criminal activity but whose actions alone do not warrant indictment.

Twilight Social Club

According to the 19-page memorandum, the elder Pica was a participant in a meeting in August 1994 at which an arrangement was worked out to allow the Twilight Social Club "to operate after-hours in exchange for a political consideration." That consideration, the documents say, was jobs for friends of Cianferano and Madonna.

The owner of the club, Michael J. Swidowich, 59, of Catonsville, is among those indicted.

The documents make it clear that when liquor inspectors sought enforce the liquor laws on protected bars, Madonna and Cianferano were quick to bring them into line. Harlow, for instance, tried to cite the Twilight Club for operating after hours, not realizing it was protected.

"Cianferano was extremely upset that Harlow had conducted an after-hours activity at a social club," the affidavit states. "Cianferano demanded that Harlow immediately meet with him at his residence. Harlow did so.

"His [Harlow's] inspection of after hours activities resulted in a call from an unknown representative of the club to John Pica Sr., the father of Sen. John Pica Jr. Pica senior then called Madonna who called Cianferano. Cianferano managed to persuade Madonna not to have Harlow terminated," the affidavit states.

The elder Pica could not be reached for comment despite repeated efforts over a one-week period. The younger Pica said he knew nothing about the Twilight Social Club or its owners.

According to the records of the court-approved monitoring of Madonna's phone, Madonna and the current liquor board chairman, Leonard R. Skolnik, had a 37-minute telephone conversation at a critical point in the investigation.

Skolnik said the conversation, as best as he could recall, concerned a liquor inspector who had just resigned. Skolnik said he called Madonna because the former delegate had recommended the inspector be hired. The chairman said the conversation had nothing to do with any liquor license or licensee.

Pica said a series of phone calls between himself and Madonna in February were an effort to determine the status of a pending application for a liquor license for a Rite Aid pharmacy on McMechen Street. Pica's calls were among those monitored by state investigators. Pica said he called Madonna seeking information that was a matter of public record.

Asked why he called Madonna rather than call the board directly, Pica said he did so only because he was unable to reach Cianferano.

"I knew they were friends," he said.

The wide-ranging probe of the city liquor board was triggered by complaints by a former inspector of corruption and political influence. Before handing up its indictments in May, a city grand jury heard months of testimony from bar owners and from current and former inspectors.

'Right-hand man'

The court records show that Harlow, one of those former inspectors, was one of the primary sources of information for prosecutors. Harlow was originally hired by Madonna as a carpenter and handyman.

"The relationship between Madonna and Harlow quickly expanded and Harlow became Madonna's right-hand man," the affidavit states. "Harlow emptied and repaired Madonna's video poker machines and operated Madonna's illicit numbers and sports book businesses."

Harlow told prosecutors he was hired as a city liquor inspector on Feb. 9, 1994, but continued to take his orders from Madonna.

Another Madonna employee told prosecutors that on one occasion she took Harlow to a bar on Eastern Avenue "for the purpose of picking up bribery money. Once inside the vehicle he fanned a large amount of money, which she estimated to be more than $1,000 and made a comment that it was a 'payoff.' Harlow delivered the bribery money to Madonna," the affidavit states.

Madonna and Cianferano

Harlow, the court records show, detailed for prosecutors the close relationship between Madonna and Cianferano.

"Madonna would leave envelopes for Cianferano or would have those envelopes delivered to Cianferano by Harlow," the affidavit states.

And Cianferano, Harlow told prosecutors, "had his own set of keys to the [video poker] machines" and was also "actively involved in Mr. Madonna's illegal gambling operations."

Harlow told prosecutors that there was never any doubt who was really in charge of liquor board enforcement.

"Harlow explained that Billy Madonna was without question the person in charge who issued instructions to Tony Cianferano on how and when to perform his inspection and enforcement duties as chief inspector. Madonna often bypassed Cianferano and issued orders directly to Harlow and Cassell.

"Although there were times when Cianferano indicated he was reluctant to carry out Madonna's directives, he always did so."

Pub Date: 8/02/98