The office of one of Baltimore's largest developers was raided yesterday by the Maryland state prosecutor's office, which has been engaged in a long-running investigation into questionable spending at City Hall.
State prosecutors arrived yesterday morning at the East Biddle Street headquarters of Doracon Contracting Inc., whose president, Ronald H. Lipscomb, has ties to Mayor Sheila Dixon, and seized several boxes of records from the building, an attorney for the company said.
Doracon became involved in a contracting scandal after hiring Union Technologies, or Utech, as a subcontractor on an East Baltimore project that received millions in city and state subsidies. Utech - which was subsequently banned from bidding on city work - employed Dixon's sister, Janice.
Though the purpose of the raid is not clear, it appears to be the latest in a series of actions taken by the state prosecutor to investigate companies or individuals with ties to Dixon. In December, the office released a grand jury indictment against Mildred E. Boyer, Utech's owner.
Dixon was president of the City Council when the Doracon project was approved and lobbied on its behalf. Dixon, who subsequently became mayor in January, was out of the state yesterday. A Dixon spokesman said he was unsure of the reason for the raid but suggested that it had nothing to do with City Hall.
"We have no reason to believe this is connected to anything at city government," said the spokesman, Sterling Clifford.
In 2003, Dixon acknowledged that she had "twisted some arms" to secure city land, money and tax relief for Doracon as well as Struever Bros. Eccles & Rouse to develop an east-side housing complex known as Frankford Estates. She shepherded a series of bills through the council to help the project that year.
The council authorized up to $6 million in tax increment financing bonds for the project, and the city approved an $800,000 grant, contributed land worth $237,000 and waived $47,600 in building permit fees, city documents showed. In return for city assistance, the developers agreed to comply with the city's minority business participation law.
Maryland paid $1 million for demolition costs to help the project, which included building 176 single-family, market-rate homes, according to reports from the Baltimore Development Corp., the city's economic development arm.
Months later, Doracon hired Utech to perform "all electrical work" under a $344,000 contract. Records obtained by The Sun showed that Utech never did the electrical work but passed it along to another firm.
Last year, The Sun reported that Dixon repeatedly voted and participated in meetings that led to the awarding of contracts to Utech, even though the company employed her sister. City ethics rules require officials to abstain from matters that benefit relatives and to disclose family members' conflicting employment. Dixon did not disclose her sister's employment on the city ethics form until after articles appeared in the newspaper.
In January, the city's ethics board announced that it had declined to launch a formal investigation into the matter. But in March 2006, Maryland State Prosecutor Robert A. Rohrbaugh's office issued subpoenas that produced nearly 27,000 pages of documents from various city agencies and private companies. Until this summer, it was unclear whether the investigation was still being conducted.
But in August, Rohrbaugh's office charged former Dixon campaign chairman Dale G. Clark with failing to file state income tax returns for three of the six years in which he earned $500,000 working without a contract as the City Council's computer consultant. The charges came just weeks before the Sept. 11 primary election, which Dixon won overwhelmingly.
In September, Clark pleaded guilty to the charges and agreed to cooperate in the state prosecutor's probe into contracts at City Hall.
Doracon Contracting is owned by Lipscomb, a Dixon friend and campaign contributor. In the winter of 2003, Lipscomb traveled to the Bahamas with about 30 others to honor Dixon on her 50th birthday, and state records show that he gave thousands to her campaign that year.
In 2005, the company was fined $10,000 by the state prosecutor for having exceeded campaign contribution limits in two consecutive election cycles.
Doracon, founded in 1988, continues to be a major minority- certified contractor for the city and private companies. The company was hired as a contractor to build a co-generation plant at the Back River Waste Water Treatment facility, according to its Web site, and has also performed work for the National Aquarium in Baltimore, at BWI Marshall Airport and the partly completed downtown Convention Center hotel.
In recent years, Baltimore development officials have selected Lipscomb and his company to play significant roles in a variety of major city-supported projects, including a $200 million effort to reshape the Uplands community in Southwest Baltimore.
Gerard P. Martin, an attorney for Lipscomb, said he could not comment on yesterday's raid other than to say that the search warrant was sealed. He could not say whether he believed the raid was related to Frankford or some other issue.
"They won't tell me why they were there," Martin said of the state prosecutor's office. "I can't tell you anything."
Although WBAL-TV showed images of people wearing jackets labeled "state prosecutor" taking boxes of documents out of Doracon's office, Deputy State Prosecutor Thomas M. McDonough said he could not confirm that a raid had taken place.
"Our comment is no comment," he said.