A political donor who has drawn heat for his role in the “Healthy Holly” book scandal that brought down former Baltimore Mayor Catherine Pugh is still making money from the city, despite concerns about his contracts from some officials in light of allegations by federal prosecutors that he made inappropriate contributions to Pugh.
At a routine meeting Wednesday morning, Baltimore’s spending panel approved an expenditure of more than $13 million for Motorola radio equipment under the city’s master lease — a long-standing financing agreement with Grant Capital Management, the Columbia firm of financier and big political donor J.P. Grant. The contract was not competitively bid, as is often allowed under the master lease.
In a criminal plea deal prosecutors and Pugh agreed to last month, prosecutors alleged Grant gave $164,000 to Pugh for her self-published children’s books over the course of several years and while he was in business with the city, despite knowing that she was funneling some of the funds into her home and political campaign. They alleged Grant made such contributions during the lead-up to the 2016 primary and general elections for mayor, despite already having made the maximum individual contribution he could make to the Democrat’s campaign.
Federal prosecutors declined to elaborate on their allegations regarding Grant, or whether they might translate into additional charges in the case, but have said their investigation is ongoing.
The five-member city Board of Estimates did not discuss Wednesday the spending of the latest funds under the master lease. But City Council President Brandon Scott and Comptroller Joan Pratt, both Democrats, abstained from the vote.
Grant could not be reached Wednesday for comment.
Grant’s company has held the rights to the city’s master lease agreement since 2003. It has financed roughly $135 million in deals since, according to city officials, with Grant providing upfront cash for capital projects that the city might otherwise be unable to afford as quickly. For instance, Grant’s firm financed a $33 million upgrade to the city’s 911 system and a $53 million contract to install energy conservation systems in public housing.
The Board of Estimates renewed the master lease deal last year under Pugh’s leadership. The value of the contract depends on what the city uses it to buy — meaning the more they use it, the more Grant makes.
Scott last week asked the city inspector general’s office to review Grant’s contracts with the city. Inspector General Isabel Cumming has said she received Scott’s request and was reviewing it.
Democratic Mayor Bernard C. Jack Young and the two members of his administration on the spending board — Public Works Director Rudy Chow and City Solicitor Andre Davis — each voted to approve the expenditure.
After the vote, Scott said the situation highlighted the need to reform the structure of the board, in which the mayor controls a majority of the votes.
“The citizens deserve the right to know these contracts are being handed out,” he said. “I stand by my call to have every contract investigated.”
Pratt said she abstained because of the inspector general’s potential review of Grant’s business before the city.
Young said he consulted with the city’s law, finance and police departments before voting in favor of the contract.
“They advised us on the importance of moving forward because we need to make sure our radios are in good working order,” said Young, referring to the Motorola contract. It covers equipment for various agencies, including the police, fire, transportation and public works departments.
Davis, the city’s top attorney, said he and others are “constantly monitoring” contracts and will pay close attention to allegations against Grant. Still, he said, “I don’t think the mayor or the council want to run city business on the basis of allegations.”
In addition to making campaign contributions to Pugh, Grant in the past has donated to Young, Scott and Pratt.
In an interview earlier this week, Pratt — a longtime friend of Grant’s — said she had not spoken to Grant since prosecutors made their allegations against him in Pugh’s plea deal, which became public three weeks ago.
“I do not have any information as to whether the allegation is true,” she said. “But of course the allegation is of concern to me.”
She added that “the legal process will determine whether the allegation is true.”
Before Wednesday’s vote, Democratic mayoral candidate Thiru Vignarajah, a former prosecutor, held a news conference in front of City Hall demanding it be postponed.
The panel also approved Wednesday spending nearly $172,000 for six forklifts, also to be financed through the master lease. This expenditure did not prompt abstentions, though a spokeswoman for Scott said that was an oversight and the council president and his staff will keep a closer eye on master lease items moving forward.
Maryland Policy & Politics
Since March, The Baltimore Sun has exposed a slate of insider deals by Pugh and fellow board members of the University of Maryland Medical System in Baltimore.
Pugh resigned in May and was indicted and plead guilty last month, along with an aide, to fraud and tax evasion related to more than $800,000 in sales of her “Healthy Holly” books to organizations with business before the city and state. Nearly the entire leadership team of the hospital network — her top buyer with $500,000 in deals — has been replaced. Other book buyers, from Kaiser Permanente to Associated Black Charities, have promised reforms to their purchasing and charitable practices.
While most of Pugh’s book buyers were cast as defrauded victims in prosecutors’ stipulation of facts, agreed to by Pugh, that was not the case with Grant.
According to prosecutors, Pugh approached Grant a month before the 2016 mayoral primary with a request for $50,000 for books, telling him she needed financial help for her campaign. Grant wrote a check, understanding that Pugh "would use the money to produce and distribute the Healthy Holly books, with the balance of the money going toward her mayoral campaign,” prosecutors wrote.
“Grant knew that providing money to Pugh’s campaign via Pugh’s company was a violation of Maryland’s election laws," they wrote.
Later that same year, Pugh came to Grant again, this time asking for $100,000 for a new house in which to entertain as mayor, prosecutors alleged. Again, Grant provided a check, writing “book donation” in the memo line, even though he understood Pugh would use some of the money to buy the house, prosecutors wrote. Grant already had contributed the maximum legal amount an individual can give to a campaign.
Grant first acknowledged buying Pugh’s books to The Sun in April. He has not publicly responded to the allegations from prosecutors, and has repeatedly declined to answer follow-up questions from The Sun.