Federal prosecutors have sent two Annapolis lobbyists and a Baltimore legislator "target letters" indicating that a probe of their legislative and business dealings likely will lead to their indictment, sources said yesterday.
A federal grand jury has been investigating dealings that lobbying partners Gerard E. Evans and John R. Stierhoff had with Del. Tony E. Fulton on proposed legislation affecting their clients, as well as a real estate transaction involving the three men.
In a sign that the investigation might be nearing an end, the U.S. attorney's office in Baltimore sent each a target letter last week, according to two sources familiar with the probe.
Assistant U.S. Attorney Stephen A. Schenning said he could neither confirm nor deny that target letters were sent to Evans, Stierhoff and Fulton or that the three are the subjects of a federal investigation.
"We don't confirm or deny or make comment about any cases that are in an investigatory stage," Schenning said.
Target letters often are sent out shortly before an indictment, indicating that the recipient can expect to be charged with a criminal offense based on information uncovered during an investigation.
Speaking in general terms, Schenning said the sending of a target letter does not necessarily mean that an indictment of a person is imminent. He said new information sometimes surfaces that changes the course of an investigation.
"A target letter puts a person on notice that he or she is a person that we've investigated and that there's present evidence to suggest that they violated a federal statute," Schenning said.
"We don't send them unless we've formed a belief that person has some culpability. It's an indication we're moving to act on that to seek an indictment."
Evans, Stierhoff and Fulton have hired separate criminal defense lawyers to represent them in connection with the federal probe, which surfaced publicly in a Sun article in May.
Their attorneys -- each a former federal prosecutor -- declined to comment on the target letters yesterday.
"We're not confirming that any letter was received and would simply indicate that Mr. Evans has done nothing wrong," said Robert C. Bonsib, a Greenbelt lawyer.
Stierhoff's lawyer, Joshua R. Treem, would not comment. But, like Bonsib, he acknowledged that he was hired by his client to represent him in connection with the federal criminal investigation.
Fulton's attorney, Richard D. Bennett declined comment.
While federal prosecutors have been tight-lipped, information about the main focus of the probe has surfaced through subpoenas they have issued and from sources who have been interviewed by federal investigators.
Lead paint legislation
A key focus of the investigation is legislation that Fulton, a West Baltimore Democrat, has twice proposed -- but never formally introduced -- that deals with lead paint.
Evans represented paint company clients that were fearful of those legislative proposals.
Federal authorities are trying to determine whether Evans' firm prodded Fulton to propose such legislation as a way to win and hold on to paint company clients.
The companies paid Evans $175,000 over the past three years to lobby to kill such bills.
The proposed legislation would have allowed the plaintiffs in civil lawsuits to allocate damages against a manufacturer based on a company's market share of the lead-paint market -- sparing plaintiffs the difficult task of proving which company supplied the paint that caused the harm.
In October 1998, Fulton sent a letter to Baltimore Mayor Kurt L. Schmoke saying that he was planning to develop a coalition to back a lead paint-market share bill and asking for the mayor's support.
The letter made its way to Evans, who forwarded it to at least two of his paint company clients, according to representatives of those companies.
Question of Schmoke role
Investigators are trying to determine whether Evans and Stierhoff had a role in drafting the letter to Schmoke.
Advocates and legislators involved with lead paint poisoning issues said Fulton, a 13-year veteran of the state legislature, was never active on that issue and never told them of his proposals for market share legislation.
Federal agents have interviewed advocates and at least one legislator about Fulton's involvement in the issue, sources said.
Federal investigators have also examined a 1998 real estate transaction in which Stierhoff and Evans steered a commission of about $9,000 to Fulton, a Lutherville-based real estate agent.
The lobbying partners used Fulton as their agent in their purchase of a $600,000 Annapolis office building last November. 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.
When the real estate deal was revealed by The Sun in January, critics suggested that Fulton might have a conflict of interest regarding legislation pushed by Stierhoff and Evans. However, the General Assembly's joint ethics committee decided not to investigate and concluded Fulton had not violated ethics laws.
Evans and Stierhoff have been among the top-earning lobbyists in Annapolis for several years, representing more than four dozen clients with interests before the General Assembly.