Federal authorities have launched a criminal investigation of prominent Annapolis lobbyists Gerard E. Evans and John R. Stierhoff, focusing in part on their relationship with West Baltimore Del. Tony E. Fulton, according to sources familiar with the probe.

The investigation by the U.S. attorney's office and a federal grand jury involves, in part, proposed legislation that Fulton discussed filing in the 1999 General Assembly session that would have helped establish manufacturers' financial liability in lead paint poisoning cases, according to sources and a federal subpoena seeking Baltimore records.

FBI agents are looking at whether the two lobbyists pushed Fulton to introduce the bill as a way to generate lobbying fees from the paint companies that would want the bill killed, sources said.

Under scrutiny is whether the two lobbyists persuaded Fulton to write a letter seeking the support of Baltimore Mayor Kurt L. Schmoke -- backing that would threaten the paint companies by making the bill seem more likely to pass, sources said. Schmoke did not respond in writing to the Fulton appeal.

Authorities also are examining an Annapolis real estate transaction last year in which the lobbyists steered a commission of about $9,000 to Fulton, a Baltimore County real estate agent, according to sources. That deal was detailed in The Sun in January.

The U.S. attorney's office in Baltimore issued a subpoena last month to Baltimore officials, requesting documents relating to the lead paint issue as well as other documents related to Evans, Stierhoff and Fulton, according to Deputy Baltimore City Attorney Frank C. Derr.

State records show that FBI agents in December, February and March copied financial disclosure forms that Fulton filed at the State Ethics Commission. The disclosure forms, which are public records, detail a legislator's business dealings and other financial information.

Federal agents also have examined Fulton's campaign finance accounts filed at the state election board in Annapolis, according to board records.

FBI spokesman Peter A. Gulotta said he could neither confirm nor deny that federal authorities are investigating Evans, Stierhoff and Fulton. The U.S. attorney's office also refused to confirm or deny an investigation.

Fulton declined to comment yesterday and Tuesday. "I'm not talking to the Sunpaper about anything," he said.

Asked if he knew federal authorities are investigating his relationship with the State House lobbyists, he responded: "I don't know anything about it."

Stierhoff also declined to comment this week. "I'm not going to speak to you about this," he said.

Evans did not respond to several requests this week for comment.

At the center of the investigation are two of the most visible and well-paid State House lobbyists. Evans and Stierhoff collected fees totaling more than $1 million last year representing 50 corporate clients ranging from health maintenance organizations to the Washington Redskins.

The Evans and Stierhoff team is one of a handful of full-service Annapolis lobbying firms that legislators can count on to buy tickets to campaign fund-raisers, make contributions to lawmakers' favorite charities and pick up the tab for Annapolis entertaining.

Lobbyists such as Evans and Stierhoff push to pass or kill a wide variety of legislation on behalf of clients who pay fees often reaching into the tens of thousands of dollars. Competition for clients has grown increasingly intense over the past few years.

Historically, some lobbyists have occasionally used what is known as the "bell-ringer" approach to creating business. Bell ringers are bills that represent a threat to a given company by, for example, offering proposed regulations that would hurt the company's bottom line.

Asked to comment on the propriety of seeking business in this way, Tom Susman, a spokesman for the American League of Lobbyists in Alexandria, Va., said, "It's like digging a hole in the street a few blocks before your repair shop. It may not be against the law, but there's something viscerally offensive about it."

The close relationship between Fulton and the two lobbyists became public in January when The Sun disclosed details of a transaction in which Evans and Stierhoff purchased a $600,000 historic brick office building in downtown Annapolis.

Evans and Stierhoff brought Fulton into the transaction as their agent, netting Fulton a commission of about $9,000. The delegate is a licensed real estate agent who works out of an office in the Towson area and rarely handles transactions in Annapolis or commercial properties.

At the time, critics said Fulton, having received a fee from them, might have a conflict of interest regarding legislation pushed by Stierhoff and Evans.

But the General Assembly's joint ethics committee decided not to investigate the real estate transaction and concluded that Fulton had not violated ethics laws. The committee did send Fulton a letter reminding him of the importance of avoiding any appearance of a conflict of interest in dealings with lobbyists.

Not public at the time was Fulton's involvement in lead paint legislation.

The Fulton letter to Schmoke, dated Oct. 5, 1998, outlined the delegate's intention to introduce legislation during the 1999 Assembly session that would make it easier for injured parties to sue companies that produced lead paint before its residential use was banned in Baltimore in the 1950s, said Derr, the deputy city attorney.

The contemplated legislation would have allowed plaintiffs in such lawsuits to allocate responsibility for lead paint damages according to each manufacturer's "market share" of the production of such paint. Plaintiffs would be spared the task of identifying the maker of the paint in each case.

Derr said the letter was among the documents recently turned over to federal authorities in response to the subpoena.

Fulton did not introduce a lead paint "market share" bill during the 90-day General Assembly session that ended last month.

Evans and Stierhoff represent at least three clients who would want to have a market share bill defeated in the legislature -- Sherwin-Williams Co., the Glidden paint company and NL Industries, a paint pigment manufacturer.

In reports filed over the past three years with the ethics commission, Evans and Stierhoff listed the three firms as clients, mentioning only one issue they were monitoring for the companies in Annapolis -- possible market share legislation. No such bills have been introduced in Annapolis in the past three years.

Glidden and NL Industries paid Evans combined fees of $77,500 for work performed during the 1997 and 1998 Assembly sessions, according to his filings with the ethics commission. There is no record of payments from Sherwin-Williams to anyone connected with the Evans-Stierhoff firm.

Lobbying reports covering the recently concluded legislative session are not due to be filed until the end of the month.

Sun staff writers Dail Willis, Michael Dresser and Michael James contributed to this article.

Pub Date: 5/06/99