Sun Investigates

Hogan makes false claim about drop in Fortune 500 companies

A claim that has also been central to Republican gubernatorial candidate Larry Hogan's critique of Maryland's economy – that the state has lost most of its Fortune 500 companies during the O'Malley administration — turns out to be false.

That assertion has been a staple of Hogan's stump speech. Hogan repeated the claim, with minor variations, throughout the primary contest and has continued to make it a central talking point in his general election campaign against Democrat Anthony G. Brown. Frequently, he has has attributed the supposed exodus to Maryland's business climate under Gov. Martin O'Malley and Brown, his lieutenant governor.


"We had 14 Fortune 500 companies headquartered in Maryland, and now we have only three. In seven years they've almost all decided to leave. Only a handful of them are hanging on and they're probably thinking about leaving," he said on the Tom Marr radio show September 13, 2013.

On other occasions, he has put the starting number at 13.


"Ten of the state's 13 Fortune 500 companies have already left our state to escape the O'Malley-Brown Administration's 40 straight tax hikes, job-killing regulations and a general anti-employer attitude," Hogan stated in reply to a question on The Baltimore Sun's Election Center.

A check of the Fortune 500 and 1000 lists, compiled each year by Fortune magazine based on gross revenue, shows that Hogan's assertion is incorrect.

There were only five Maryland companies on the Fortune 500 list in 2006, the last year of the Republican administration of Gov. Robert L. Ehrlich Jr. Eight years later there are four. The only way to get close to 13 as the starting number is to use the Fortune 1000 list. Maryland had 12 companies on that list in 2006 – the same number as in 2014.

Todd Eberly, a St. Mary's College political scientist who examined the numbers, concluded that "there appears to be no way to support [Hogan's] statement —- even with sleight of hand math."

Recalling Hogan's recent press conference at which Hogan called Brown a liar over negative TV ads, Eberly said: "You can't go around calling your opponent a liar if you're playing fast and lose with the truth as well."

The Hogan campaign did not respond to repeated requests for comment.

Justin Schall, Brown's campaign manager, charged that Hogan "has a disturbing pattern of purposely misleading voters on important issues. "

"Hogan either doesn't understand basic facts about Maryland or he is willing to say anything to get elected, even when he knows it's not true," Schall said.


Daraius Irani, chief economist at the Regional Economic Studies Insitute at Towson University, said most of the movements of large companies such as those in the Fortune 500 or 1000 are the result of forces beyond a state's control. For instance, the two 2006 Fortune 500 companies that no longer have headquarters in Maryland, Black & Decker Corp. and Constellation Energy, were acquired by other companies.

"Nothing the governor would have done would have prevented that," Irani said.

Maryland's number of Fortune 500 companies tends to fluctuate over the years as some companies grow or shrink and some merge with other firms. Maryland's number of Fortune 500 firms grew in the early O'Malley years to seven in 2009, but that was partly the result of Legg Mason rising to No. 500 for one year before sliding back.

There were seven Fortune 500 firms in Maryland in 2002, the year before Republican Gov. Robert L. Ehrlich took office, and five in 2006, his last year. One company left Maryland and another slipped to No. 502.

The Baltimore region lost its last Fortune 500 company in 2012 when Constellation was acquired by Chicago-based Exelon, but Maryland still has four Fortune 500 firms based in Montgomery County. The Baltimore region has seven companies in the Fortune 1000.

Irani compared the false Hogan claim with Brown's ads criticizing Hogan for position he took three decades ago on abortion.


"That's politics. There is no truth in politics," he said."The only thing that matters at the end of the day is that they win."