Deal adds a twist to Dixon probe

THE BALTIMORE SUN

Baltimore City Council President Sheila Dixon has acknowledged that she "twisted some arms" to secure city land, money and tax relief for the developers of an east-side housing complex known as Frankford Estates.

Even as federal investigators probed her relationship with a Frankford developer, Dixon in June 2004 defended her support of a project that she said was good for the city because it brought market-rate homes to a depressed area of East Baltimore.

She did not disclose the deal was also good for a minority subcontractor on the project -- Union Technologies LLC, also known as Utech -- that had hired her sister Janice as a full-time manager in February 2004 after several months of part-time employment.

The City Council president shepherded a series of bills to help Frankford Estates through the council in May 2003, records show. In December 2003, the project's co-developer, Doracon Contracting Inc., hired Utech to perform "all electrical work" under a $344,000 contract.

But Utech, rather than doing the job itself, hired its own electrical subcontractor in April 2004 to do the bulk of the work, according to court records obtained by The Sun.

The city's minority subcontracting ordinance states that prime contractors, like Doracon, cannot count a subcontractor toward meeting minority participation goals if more than 10 percent of the deal is passed to another company. The subcontractor also does not count if it cannot perform "real and distinct work for which the [subcontractor] has the skill, expertise and actual responsibility to perform."

Utech's arrangement with Doracon adds a previously unknown element to concerns about the council president's official conduct regarding Utech and her sister, who is also Dixon's longtime campaign treasurer.

Last month, the Maryland state prosecutor subpoenaed records from city agencies concerning $101,000 Utech earned from Baltimore's cable television provider, Comcast, and nearly $1 million it received from City Hall's computer network manager, TeleCommunications Systems Inc. of Annapolis. Both firms have received state subpoenas related to Utech.

Dixon voted and participated in meetings that led to the award of both contracts without disclosing her sister's Utech job. City ethics rules require officials to abstain from matters that benefit relatives and to disclose family members' conflicting employment.

Dixon would not comment on the Frankford Estates deal. Her chief of staff, Beatrice Tripps, said the office would not discuss the matter while the state is investigating the city contracts.

Details of electrical contracting at Frankford Estates appear in a lawsuit in Baltimore Circuit Court filed by Daniel Gonzalez, president of Aggadan Electric, which Utech hired April 1, 2004. The company worked until January 2005 and filed the suit two months later.

Gonzalez alleged that he had done $448,402 worth of work on the contract but had been paid $315,000.

Gonzalez withdrew the suit in August because, he said, he felt he could not prevail over the political influence of Doracon and Utech.

"They target the small guys who are hungry," Gonzalez said. "They know they can take advantage of the small guy because they can't do anything to the big companies."

In court filings, Doracon lawyers and Mildred E. Boyer, the president of Utech, confirmed the subcontracting arrangement with Aggadan and also acknowledged payments that indicate the firm had done far more than 10 percent of the work on the project -- the ceiling for a pass-through contract.

The records also disclose that the cost of the electrical work had increased significantly.

Doracon and Boyer disputed that Aggadan had not been fully paid, asserting that Aggadan did not honor the contract. In an affidavit, Boyer said she paid Aggadan $380,014 and that she retained an additional $35,657 as part of security on the contract. She also said that Gonzalez did not perform work that cost Utech $289,530.

Thomas B. Corey, chief of the city's minority business office, said the project is subject to the subcontracting law and Utech was an approved minority subcontractor for Frankford Estates.

"If after investigation we find that Utech has subcontracted more than 10 percent of its work, ... those dollars cannot be counted toward achieving the [minority] participation goals on the project," Corey wrote in an e-mail to The Sun last week.

Gonzalez said Utech retained him on a mutual friend's referral because neither Boyer nor Janice Dixon could do the work themselves.

"Utech had no employees who were master electricians," said Gonzalez, who is a master electrician certified by the state of Maryland.

Boyer, who served in the administration of Mayor Kurt L. Schmoke, could not be reached for comment. Janice Dixon also could not be reached.

Utech's Web site -- which names Boyer and Janice Dixon as the firm's two contacts -- has listed "master electrician" under its "certifications."

State and city records show that neither Boyer nor any known Utech employee has ever been certified as a master electrician. To perform electrical services in Maryland and Baltimore a company needs to employ a master electrician certified by the state or city.

The Web site also has listed other qualifications for designing and installing networks of wires from Building Industry Consulting Service International Inc.. or BICSI, a national organization that provides training and certification for designing and installing networks of wires.

BICSI officials said a search of the organization's certified members showed otherwise. Boyer, Janice Dixon and Utech are not listed as ever having those certifications.

Doracon hired Utech after Dixon shepherded four bills through the City Council that cleared the way for several forms of city subsidies. The council authorized up to $6 million in tax increment financing bonds and the city approved an $800,000 grant, contributed land to Frankford Estates worth $237,000 and waived $47,600 in building permit fees, city documents show.

In return for city assistance, the developers agreed to comply with the city's minority participation law.

The state paid $1 million for demolition costs to help the project on its way to building 176 single-family, market-rate homes, according to reports from the Baltimore Development Corp., the city's economic development arm. The homes are now being sold.

Doracon, like Utech, has ties to Sheila Dixon.

Ronald H. Lipscomb, Doracon's chief executive, has said he and Dixon became friends in 2002, after they got to know each other during negotiations over Frankford Estates. In the winter of 2003, he traveled to the Bahamas with about 30 others to honor Dixon on her 50th birthday.

As she ran for re-election in 2003, Dixon held up Frankford Estates as proof of her leadership abilities, saying she had "twisted some arms" to get the stalled project moving.

Lipscomb did not respond to repeated phone calls last week seeking comment.

Doracon's partner in the Frankford Estates deal is Struever Bros. Eccles & Rouse

C. William Struever, head of Struever Bros., said he was unaware that Utech was a minority subcontractor on the project.

"It's a good question for Doracon," Struever said. "It's not uncommon to have a lead sub[contractor] that is then responsible for all the overall work and parcels it out to other people."

The Frankford Estates project attracted the attention of law enforcement after Maryland's U.S. attorney opened an investigation of City Council members in 2003. That investigation was started after a Sun article detailed hiring of relatives and acceptance of free tickets and passes for theaters and parking.

In 2004, the federal prosecutor issued subpoenas to Lipscomb requesting records reflecting any income, loans or grants he received from the city and any gifts he gave Dixon.

During that inquiry, which concluded without any charges, Dixon held a news conference in June 2004 to say she had done nothing to affect who got the Frankford Estates contract. Lipscomb told The Sun in a 2004 interview that he has "never done anything inappropriate from a business point of view."

Of his relationship with Dixon, he said, "We are good friends,"

Raquel Guillory, a spokeswoman for Mayor Martin O'Malley, said the administration would review the Frankford deal.

Boyer donated $4,000 to the mayor's campaign last summer. But O'Malley's office denies her claim that the mayor's office named Utech as the "technology consultant" to the African American Heritage Festival.

O'Malley, who was cool to the Frankford Estates project in 2000, shortly after he took office, said three years later that "Sheila prevailed in convincing me that the market values are such that new housing would prevail in that area."

doug.donovan@baltsun.com

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