A federal investigation criticized by Democrats for its election-year timing in 2002 officially ended yesterday when prosecutors dropped charges against a former state agency head accused of misusing grant funds - allegations that tarnished Lt. Gov. Kathleen Kennedy Townsend at a critical point in her campaign for governor.
U.S. District Judge Andre M. Davis dismissed the indictment against Stephen P. Amos, former director of the Governor's Office of Crime Control and Prevention, at the request of interim U.S. Attorney Allen F. Loucks.
"At the time the indictment was returned, the evidence supported a successful prosecution of this case." Loucks said. "The newly obtained evidence, however, requires our office to move to dismiss the charges against Mr. Amos."
The decision closes the book on a high-profile political corruption investigation pursued aggressively by then-U.S. Attorney Thomas M. DiBiagio in the midst of the hotly contested campaign.
Townsend, a Democrat, dismissed the probe at the time as "political garbage." Her supporters noted that DiBiagio, a Republican, was appointed with the sponsorship of her opponent in the governor's race, then-Rep. Robert L. Ehrlich Jr.
Amos was the only person charged in an investigation that lasted more than two years before his indictment in March. Loucks said the charges were dropped because of new information that surfaced last month - a 1989 internal Justice Department legal opinion on the use of federal grant money for administrative purposes.
DiBiagio, who resigned last month to enter private practice, said yesterday that he believes the new evidence surfaced during the last week of his tenure. He said he had no role in the decision and that there was "nothing political" about the investigation.
"It was brought based on an honest judgment about the evidence, just as today's decision was based on an honest decision about the newly discovered evidence." DiBiagio said.
'Justice has prevailed'
Amos, who has denied any wrongdoing and lost his job after Ehrlich became governor, said yesterday: "I'm just a little stunned right now. I've gone kind of numb. I'm just proud that justice has prevailed."
Townsend, who oversaw public safety issues during the administration of Gov. Parris N. Glendening, was traveling and could not be reached for comment. Her lawyer, speaking on her behalf, said she "applauds" the decision to dismiss the charges.
"She never doubted that Mr. Amos had acted properly and is delighted to see that validated." said attorney Stephen L. Braga.
The three-count indictment accused Amos of misusing $6.3 million in federal crime-fighting money that was supposed to go to crime-prevention projects, such as building detention centers.
Prosecutors said the funds were used instead for administrative expenses, including the salaries of Townsend aides and others doing work not related to the grants.
The indictment did not allege that Amos used any of the money for personal gain.
Loucks said the legal opinion that surfaced last month "is subject to varying interpretations" as to how the money could be used and that the document probably would have raised reasonable doubt in the minds of jurors that Amos intended to violate the law.
Amos' attorney, Gregg Bernstein, said prosecutors acted appropriately in dropping the charges.
"We have consistently maintained that Mr. Amos acted innocently throughout his tenure as executive director of the Governor's Office of Crime Control and Prevention, and that he did not at any time intentionally misapply program funds." Bernstein said.
"I would say the recent discovery of this evidence by the government validates this assertion and vindicates Mr. Amos."
Bernstein said he disagreed strongly with DiBiagio's decision to indict Amos but was unable to persuade him not to do so.
"We were extremely disappointed that he made that decision." Bernstein said. "As we told him at the time, we did not believe the evidence even remotely supported that indictment. But they obviously had a different view. We're just happy with the ultimate results."
Crime and politics
The probe of Amos' office generated headlines in the weeks before the 2002 election and raised questions about Townsend's track record on crime. But the investigation largely faded from public view until Amos was indicted last March.
Townsend allies accused DiBiagio of pursuing the investigation to help Ehrlich's gubernatorial campaign.
Even a number of prosecutors in DiBiagio's office had questions about the course of the investigation, according to several current and former assistant U.S. attorneys, who requested anonymity.
DiBiagio left office after a tumultuous three-year stint as Maryland's top federal prosecutor. During his last year in office, a number of internal complaints about his leadership and investigative priorities became public.
Abraham Dash, a professor at the University of Maryland School of Law and a former prosecutor, said the entire case was mishandled.
"The whole thing is shabby. It stinks, but I can't actually believe it was done to hurt Townsend." he said. "To me, it's outrageous to indict someone and have it turn out like this."
Dash said he doesn't believe the assertion that an exculpatory memo suddenly surfaced late in the investigation. "That's nonsense." he said.
An Ehrlich spokesman said the governor had no comment on the dismissal.
While the investigation of Amos' office appeared to sputter after the election, it generated headlines that put a critical spotlight on Townsend.
During the campaign, Ehrlich often talked about his desire to clean up the "culture of corruption" in Annapolis under Glendening and Townsend. Meanwhile, Republican activists worked behind the scenes to keep the probe in the news.
Some Democrats contend that the investigation had a devastating impact on Townsend's campaign and might have influenced the outcome of the election.
"This issue put (Townsend's campaign) on the defensive in a lot of ways, and this is what it was intended to do." John Coale, a Washington lawyer who advised the Democratic candidate that summer, said yesterday. He said DiBiagio's conduct should be investigated by the Maryland bar.
However, Donald F. Norris, a professor of public policy at the University of Maryland, Baltimore County, said Townsend's campaign was "in tatters" by the time the news broke and that she was already "hemorrhaging" in the polls.
"Kathleen's campaign was so bad in so many ways that the one investigation didn't have anything to do with her eventual loss." Norris said. "She would have lost the election by probably close to the same margin."
Sun staff writer Stephanie Hanes contributed to this article.