The case stems in part from at least $15,348 in gifts Dixon allegedly received from her former boyfriend, prominent city developer Ronald H. Lipscomb, while she was City Council president. She also is accused of using as much as $3,400 in gift cards, some donated to her office for distribution to "needy families," to purchase Best Buy electronics and other items for herself and her staff.
Lipscomb was not indicted in the Dixon case, but he and City Councilwoman Helen L. Holton were charged this week in a separate $12,500 bribery scheme. Both cases grew out of a nearly three-year probe by the state prosecutor into City Hall corruption.
The investigation has hung over Dixon, a Democrat, even as she became the city's first female mayor and oversaw a significant decrease in the city's homicide rate, reducing killings to a 20-year low. Viewed as an energetic and charismatic leader, she has earned praise from residents for implementing an easy-to-use recycling program and displaying a willingness to tackle the city's systemic racial and economic disparities.
It is unclear what the indictment will mean for the mayor. She has pledged to remain focused on her job, and many local officials rallied behind her yesterday. But even ceremonial events will take on new dimensions. Many wondered yesterday, for example, whether Dixon will appear with President-elect Barack Obama next week when he makes a planned stop in the city.
At a news conference yesterday at her attorney's office in Clipper Mill near Hampden, a composed Dixon said she was innocent.
"I will not let these charges deter me from keeping Baltimore on the path that we have set, or from carrying forward the significant progress we have made thus far," she said, reading a prepared statement. "I am being unfairly accused. Time will prove that I have done nothing wrong, and I am confident that I will be found innocent of these charges."
If convicted on all charges, the 55-year-old former teacher and mother of two could be sentenced to 85 years in prison. The most serious charges, two counts of felony theft, each carry a possible 15-year prison term.
Her attorney, Arnold M. Weiner, in a half-hour presentation carried live on local television and designed to win over the court of public opinion, accused those investigating the mayor of partisan motivations.
Weiner noted that State Prosecutor Robert A. Rohrbaugh and former U.S. Attorney Thomas M. DiBiagio, who investigated her earlier, were appointed by Republicans, and he accused Rohrbaugh of harboring an "obsession" in pursuing the mayor.
"There wasn't a bedsheet he did not look under or a lead he found too trivial to pursue personally," Weiner said.
The lawyer used courtroom exhibit-style poster boards to argue that Dixon did not perjure herself by failing to include the Lipscomb gifts on her city ethics forms, saying city code does not require disclosing gifts from subcontractors, such as Lipscomb.
Using a red pen, he pointed to a city code provision that requires the city's finance director to maintain a list of the companies doing business with the city. Weiner said that the city has not kept that list. Staff at the city's finance department could not be reached for comment by deadline.
Rohrbaugh declined to respond to questions, and prosecutors would not say whether their probe has ended. He said in a statement: "The public's trust in their elected officials is essential to the proper functioning of government."
The City Hall corruption probe dates to the fall of 2003, when federal authorities subpoenaed five years' worth of financial records from all City Council members. When that inquiry ended 18 months later with no charges filed, Weiner said, Rohrbaugh began an investigation of his own.
That state investigation eventually spanned as many as nine Baltimore grand juries. Weiner called it the longest and most expensive public corruption investigation he had ever seen.
In the end, a Baltimore Circuit Court grand jury that expired yesterday returned a 31-page indictment of the mayor.
One theft charge involves misconduct in December 2007, when Dixon was mayor. According to the indictment, a Baltimore housing employee purchased Toys "R" Us gift cards to be distributed to underprivileged children during a holiday event. Dixon allegedly gave one of those gift cards to a member of her staff, and five others were discovered at her West Baltimore house when investigators raided it in June.
Among other accusations: In 2004, 2005 and 2006, Dixon solicited gift cards - to Target, Best Buy, Old Navy and Circuit City - from two developers. She then used some of the cards to purchase a PlayStation2 controller, a PlayStation Portable, a Samsung digital camcorder and other items she either kept or gave to staff members as Christmas presents, the indictment said.
Neither developer is named, and the state prosecutor refers to them as Developer A and Developer B. Weiner identified Developer A as Lipscomb.
Another part of the indictment covers lavish presents from Lipscomb, whom Dixon has said she dated briefly in late 2003 and early 2004. Those gifts include a $2,000 furrier certificate that she used to buy a Persian lamb coat and a "burnt umber mink coat"; $3,200 for a New York City trip that included a stay at the Trump International Hotel; a $1,518 plane ticket from Baltimore to Chicago; and thousands of dollars in cash to pay credit card bills amassed during a swanky Chicago shopping spree.
The indictment also alleges that Lipscomb passed Dixon thousands of dollars of cash - some of which she handed off to a staff member in a wad of 40 $100 bills while being driven around the city. The staff member, who is not named in the indictment, deposited the cash into his personal checking account and paid part of Dixon's American Express bill, the indictment says.
After the indictment was handed up, elected officials across the state came out strongly in support of Dixon, with many saying they were praying for her. "I feel very sorry for her," said Baltimore State's Attorney Patricia C. Jessamy, a fellow Democrat. "She is a very hard worker. ... Based on what I know and my relationship with her, I hope this is resolved quickly so that she can continue conducting the business of the city."
City Council President Stephanie C. Rawlings-Blake said in a statement that the mayor "is an effective public servant who has worked tirelessly for the citizens of Baltimore. I wish Mayor Dixon the best as this difficult case continues and allegations are answered as part of the legal process."
Gov. Martin O'Malley, who was mayor when some of the gifts were exchanged, called it "a tough day for all of us who care about Baltimore's progress."
"It is my sincere hope that all of these long, drawn-out matters will soon be resolved in a court of law once all the facts are known," he said.
Del. Maggie L. McIntosh, a Baltimore Democrat and influential leader in Annapolis, said, "I did note that there was no charge that she was in any way bribed. ... We now need to hear her side of the case."
The Maryland Republican Party released a statement saying the "culture of corruption is rearing its head" among Maryland Democratic politicians.
Baltimore's ethics laws, which Dixon helped to write, ban city employees from soliciting or accepting gifts from those who do business with the city.
"A primary purpose of the yearly Financial Disclosure Forms is to disclose, monitor and deter conflicts of interest, thereby maintaining public confidence in the integrity of Baltimore's public officials," Rohrbaugh wrote in the indictment.
Over the course of the wide-ranging investigation, two people with ties to Dixon have pleaded guilty, and state officials spent seven hours searching the mayor's Hunting Ridge home in June.
Dixon came under intensified scrutiny after a Sun article in early 2006 revealed that she, as City Council president, used an investigative hearing to pressure an official from Comcast to give more work to several minority-owned firms, including a company that employed her sister.
Dixon also voted three times on awarding contracts to the company, Utech, worth about $1 million.
In March 2008, the president of Utech, Mildred E. Boyer, pleaded guilty to filing a false tax return and pledged cooperation with the state prosecutor's investigation. None of the charges filed yesterday involved Utech, a fact noted by Dixon's attorney, who said the state prosecutor wasted time and taxpayer money pursuing fruitless leads.
The Sun also reported in 2006 that Dixon's campaign chairman, Dale G. Clark, received $600,000 over six years for developing a computer system for the City Council.
For five of those years, Clark worked without a contract and was instructed by Dixon's chief of staff to bill the city in increments below $5,000, an amount that does not require approval from the city's Board of Estimates.
In September 2007, Clark pleaded guilty to three counts of failure to file tax returns and is cooperating with a broader investigation. Yesterday's indictment also had no mention of Clark.
Baltimore Sun staff researcher Paul McCardell and reporters Laura Smitherman and Gadi Dechter contributed to this article.