Crony capitalism rises in Annapolis

One week after Maryland received a D- for corruption risk on a national report, legislators are poised to cement crony capitalism into the state code.

Allegedly designed to expedite major developments and create jobs, legislation supported by Gov.Martin O'Malleyoutlining rules for public-private partnerships passed the House on Monday. The amendments in HB 576 — which give public-private partnerships special legal status, and do it retroactively — show this legislation is about one project near and dear to the O'Malley administration: State Center.

As a refresher, the $1.5 billion taxpayer-financed project in Baltimore City is stalled due to a lawsuit by a group of downtown business owners who claim the state circumvented the competitive bidding process to choose developers. The state tried to dismiss the case and failed — and then, outrageously, countersued plaintiffs for $100 million and failed again. So far, the state has refused to provide documentation on the project as required by court order.

And this legislation, if it passes the Senate, means the state could avoid pesky due process and appeal directly to Maryland's Court of Special Appeals without having to let the case exhaust itself in circuit court.

Del. Maggie McIntosh, a Baltimore Democrat, said speeding up the legal process is necessary because, "Time is money when you are trying to get a business into Maryland."

But as Del. Luiz Simmons, Democrat of Montgomery County, said of the bill, "What we are about to do is to become legislators in a banana republic where they routinely interfere with the judicial process on behalf of special interests."

And they are not just any special interests but close allies of Governor O'Malley. A long list of political supporters would benefit from the State Center development, including lobbyist Sean Malone, Mr. O'Malley's labor commissioner during his time as mayor of Baltimore. He represents State Center LLC, as well as other organizations that stand to gain from this legislation, including East Baltimore Development Inc., the secretive, taxpayer-funded organization overseeing the haltingly slow redevelopment of land around Johns Hopkins Hospital.

The lobbyist's influence on the legislation was so strong that Mr. Simmons said he was told to "work it [his objections] out with Sean Malone."

Jon Laria, managing partner of Ballard Spahr's Baltimore office, development lawyer and member of Mr. O'Malley's gubernatorial transition team, is another person with a lot to gain from the project. He is counsel for State Center LLC and vice chair (with Ms. McIntosh as chair) of the governor's Task Force on Sustainable Growth and Wastewater Disposal. Cozy, isn't it?

Everyone knows having friends in high places is good for business, but should it allow supporters of Mr. O'Malley to have an entirely different set of rules?

Special interests winning favors is only one bad part of the legislation, however.

The Maryland State Bar Association objects to the retroactivity of the bill because it could invalidate contracts and conflict with other laws. Plaintiffs in the State Center case say that provision unfairly targets them. "This retroactive amendment is a transparent end run around the State Center case in the midst of discovery and prior to a trial on the merits," said Alan Rifkin, lead counsel.

It also would allow some of the biggest state projects to be exempted from procurement laws and make it impossible to find out how taxpayer dollars are being used through the Public Information Act. In addition, it would circumscribe decades of laws designed to ensure an open and transparent bidding process in a state already rife with pay-to-play scandals. Type Jack Johnson, Ulysses Currie and Thomas Bromwell into a web search engine for a few recent examples.

Worse, if adopted, it sets a terrible precedent for favoring development over the rule of law. What's to stop those who want to use eminent domain in the name of building a "sustainable, transit-oriented" development, for example, to also request and receive legislation for their projects? Very few people have the deep pockets of Orioles owner Peter Angelos, who is financing the State Center plaintiffs, to fight the government.

As Mr. Simmons said, "the O'Malley administration is sowing the seeds of corruption" and creating a "debacle waiting to happen" with this legislation. The only remaining question is whether state senators are such sycophants of our ambitious governor that they would trample the 99 percent of Marylanders whose rights are crushed by this bill.

Marta H. Mossburg is a senior fellow at the Maryland Public Policy Institute and a fellow at the Franklin Center for Government and Public Integrity. Her column appears regularly in The Baltimore Sun. Her email is

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