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Maryland Gov. Larry Hogan announces ethics reform legislation, fends off questions about his firm

Governor Larry Hogan announces that he will introduce the Ethics and Accountability in Government Act the day before the General Assembly reconvenes in Annapoli

Maryland Gov. Larry Hogan declared the General Assembly’s 441st session to be the “Accountability Session,” saying Tuesday he would introduce legislation to crack down on violent criminals amid a surging homicide rate in Baltimore and to punish corrupt state lawmakers after a recent spate of convictions.

At the same time, Hogan brushed off questions from reporters and some Democratic lawmakers about his transparency and ethics as he continues to make hundreds of thousands of dollars annually from real estate deals managed by a trust, approved by the State Ethics Commission, and run by his associates.

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“No one has ever been more transparent,” Hogan said in response to questions at a news conference at the State House. “No elected official has ever disclosed more than I have.”

The Republican governor, now in his second, four-year term, continues to be a popular figure in Maryland. Hogan had a 75% approval rating in a survey of likely voters released Tuesday by Gonzales Research & Media Services, an independent polling firm.

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At his news conference to announce his priorities for the legislative session that opens Wednesday, more than 50 Republican state lawmakers crowded in and gave Hogan a standing ovation.

He unveiled a package of ethics reforms inspired by criminal charges filed in corruption cases involving three Democratic politicians in recent months: former Prince George’s County Del. Tawanna Gaines; former Baltimore Mayor Catherine Pugh and former Del. Cheryl Glenn of Baltimore. Gaines was sentenced to six months in prison; the others are awaiting sentencing in federal court, and Pugh has another charge pending in state court.

Hogan’s “Ethics and Accountability in Government Act" would increase state penalties for bribery of public officials to a maximum of $100,000 and authorize the ethics commission to impose civil penalties against state employees and public officials without first going to court, among other proposals.

“This is the third session in a row where we’ve started the session with indictments of legislators,” the governor said. “I would say everybody should be concerned.”

Maryland lawmakers last increased the penalty for bribery by public officials charged in state cases in 2017. An ethics bill that year boosted the fine for bribery from a range of $100 to $5,000 to a minimum of $1,000 and a maximum of $10,000 ― a move that was pushed by then-Senate President Thomas V. Mike Miller. (The bill left the potential prison sentence the same, from two to 12 years.)

Hogan earlier disclosed his plans for legislation in the 2020 session aimed at turning around low-performing public schools and setting harsher penalties for some criminals.

“What I believe the overall theme of this legislative session should be about is increasing accountability,” Hogan said. “More accountability for the violent criminals who are shooting and killing people in the streets of Baltimore City. More accountability in our local school systems for the billions of tax dollars they spend, making sure those tax dollars actually make it into the classrooms. ... But I believe it should also be about more accountability for public officials, as well, making sure they are deserving of the trust that people have placed in them."

Democratic leaders already declared education their focus for the session. They’ve pledged to pass sweeping reforms aimed at improving the state’s public schools — and to do it without a massive tax increase.

At a pre-session Democratic lunch Tuesday, House of Delegates Speaker Adrienne A. Jones described enacting the education reforms as “our toughest fight,” noting Hogan’s social media and talking points campaign against the costs of what the Kirwan Commission recommended after studying the state’s schools.

“This will be the session for Maryland children,” Jones said.

At his news conference, Hogan took credit for pledges by Jones and incoming Senate President Bill Ferguson to avoid across-the-board increases to income, sales or property tax rates to pay for the education reforms.

“The Kirwan Commission has spent three years talking about some really great ideas about education and no time talking about how to pay for it," Hogan said. “It’s not up to me to figure out how they pay for their ideas. ... We now have successfully gotten them to back off tax hike proposals.”

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The governor continued to decline to comment on a proposed deal to keep the historic Preakness Stakes horse race in Baltimore by turning the Pimlico Race Course over to a new nonprofit entity and remodeling it into a multisport and entertainment venue.

“We have 90 days to talk about it,” Hogan said.

Even as he proposed ethical reforms, Hogan was asked whether he was acting aboveboard with his real estate holdings.

Hogan is the founder of the Annapolis-based Hogan Cos., which has completed more than $2 billion in real estate deals since 1985 and continued to thrive since Hogan took office in 2015. Hogan has an ownership interest in 43 limited liability companies — including four companies formed since he filed his most recent disclosure forms this spring for business in 2018.

After becoming governor, Hogan stepped aside from running the company and turned his assets over to a trust approved by the state ethics commission. His brother, Timothy Hogan, runs the firm.

The commission approved the trust agreement in April 2016 to govern how the three trustees — all of whom worked for Hogan — would manage his dozens of real estate holdings. The commission granted a “financial interest exemption” that permits the trustees to provide the governor and his accountant details on how much money the governor is making.

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For years, some Democrats, including former Gov. Martin O’Malley and the progressive group Our Maryland, alleged Hogan misused state resources to benefit his real estate business ― accusations the governor denies. The governor was asked Tuesday about a story in Washington Monthly magazine, published online Monday, that made similar claims.

“I’ve been as transparent as possible. I think I’m the first Maryland governor ever that was a businessperson,” Hogan said. “I sat down with the ethics commission and laid out everything about my business. ... We followed the letter of the law.”

Hogan noted reporters have published pieces for years about the trust created to handle his business while he’s governor. He said he files financial disclosure forms each year and released his tax returns while in office.

“I didn’t read the blog thing that came out yesterday,” the governor said. “But this same exact story was covered by Maryland Matters, by The Baltimore Sun. Democratic operatives have been pushing this same exact narrative. There’s really nothing to it.”

Del. Vaughn Stewart, a Montgomery County Democrat, said he plans to push Hogan to disclose more information about his business. Stewart said lawmakers could consider legislation limiting a governor’s ability to do outside business related to governing decisions.

“I hope that he’s going to put his money where is mouth is,” Stewart said.

With new leadership in the General Assembly and dozens of lawmakers first elected in 2018 getting their footing, “a lot of us are looking at this through fresh eyes,” Stewart said.

Meanwhile, area leaders announced their priorities for the legislature.

Baltimore County Executive Johnny Olszewski Jr. said at a news conference that he is seeking more funding for classroom education and school buildings, an expansion of regional crime-fighting partnerships and better access to treatment for opioid addiction. The county had a record 50 homicides in 2019, and Olszewski said that the city of Baltimore’s relentless violence has an effect on the neighboring county.

“In Baltimore County, we are taking concrete steps to improve public safety and combat violent crime in our communities, but crime is a regional problem. So, those steps also have to include regional solutions,” said Olszewski, a Democrat, as he was flanked by more than a dozen state lawmakers from the county.

Olszewski also said he supports legislation to ban the use of certain chemicals in foam that firefighters use during training and to use cameras to identify unauthorized truck traffic on local streets.

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