Issues brewing over lawyer fee; Money: Republicans could make political hay over how much Peter G. Angelos gets for handling the tobacco suit.


REPUBLICANS SEE a delightful political issue brewing as Peter G. Angelos and the state's Democratic leadership grapple over the size of his fee for handling Maryland's lawsuit against the tobacco industry.

The suit was settled when the cigarette manufacturers agreed to a settlement with the states. But with the tobacco money soon to begin flowing to states, Angelos' fee remains an open question.

Under terms of the national settlement, attorneys such as Angelos can go to an arbitration panel and seek their fees directly from the tobacco companies, allowing states to retain all of their proceeds for the benefit of the public.

Angelos has not filed for arbitration, and he and Maryland Attorney General J. Joseph Curran Jr. have been negotiating in recent weeks over his share of the state's take -- which is expected to top $4 billion over the next quarter-century.

If Angelos ends up collecting a significant sum from the state -- rather than directly from the tobacco companies -- Republicans see a ready-made issue.

"I would tell Mr. Angelos he should go to the arbitration panel, that should be his fee and he should be satisfied," said Del. Robert L. Flanagan, the House Republican whip and a longtime critic of Angelos' fees in the case. "I would add, 'Please don't take state dollars out of programs for poor children to feed your huge financial empire.' "

Flanagan, of Howard County, figures the public will learn how many hours Angelos' lawyers put in the case and how much he fronted for expenses. When those facts are known, Flanagan is confident that Angelos' fees, calculated on an hourly basis, would seem astronomical to the average voter.

"After you see the hours spent and the costs shared by the Angelos firm, it will be obvious to everybody that the amount of money he's claiming is not reasonable," Flanagan said.

For Republicans, bashing the principal owner of the Baltimore Orioles is even more rewarding because of his status as one of the biggest givers to Democrats in Maryland and around the country for years.

Democratic legislators, perhaps sensing a public relations problem, are stressing the state's contractual obligations to Angelos, noting that his firm took on the risky lawsuit when few other firms were interested.

When Angelos signed on to handle the case three years ago, his fee was to be 25 percent of any winnings. The General Assembly voted last year to knock that back to 12.5 percent -- an action that Angelos has proclaimed meaningless.

"In fairness to Mr. Angelos, he has a contract whereby the state agreed to pay him 25 percent," said Senate President Thomas V. Mike Miller, a Prince George's Democrat.

Miller said it would be fair for Angelos to take home the 12.5 percent fee set in state law, with some of the money perhaps coming from the tobacco companies and the rest from the state's share of the settlement.

The public, Miller said, will not object to such a payoff, even if it does work out to an Angelosian hourly rate.

"I think they should be able to live with that," Miller said.

Democrats voice support to repeal inheritance tax

Democrats are starting to sound like Republicans on one issue -- the state inheritance tax.

Miller and House Speaker Casper R. Taylor Jr. voiced support yesterday at the Chamber of Commerce legislative conference in Ocean City for eliminating the state levy -- particularly on property left to a surviving spouse.

Echoing the concerns of many congressional Republicans, Miller called the inheritance tax "unfair."

"People pay an income tax all along during their lives," Miller said. "Then they have to pay this inheritance tax. I think this sends the wrong message."

Taylor agreed, saying the tax hurts the state's business image.

"There's no tool in our chest that would make the state more attractive" than repealing the inheritance tax, Taylor said.

As for the $70 million or so that the state would lose if the tax is repealed, Taylor seemed unfazed.

Referring to the state's healthy budget surplus, Taylor said, "We're rolling in dough."

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