Financier under fire has reputation as benefactor
Pugh prosecutors say Grant, a political donor, paid for ‘Healthy Holly’ books while knowing it may have been inappropriate
When Munir Bahar heard the financier J.P. Grant was among those who purchased former Mayor Catherine Pugh’s “Healthy Holly” children’s books, it didn’t surprise him, he said.
Grant, a West Baltimore native, has long given to projects geared toward kids, whipping out his checkbook time and again over the course of many years to fund student scholarships, a Little League team, programs for Squeegee Kids and city pools.
“When I saw he gave money to Healthy Holly, I just thought, ‘Well that just sounds like J.P.,’” said Bahar, executive director of the nonprofit COR Health Institute, a martial arts program for boys that has received $85,000 from Grant since 2015. “I really don’t think he was trying to buy some political in, because the man is already connected. His stature, his legacy, who he is, he doesn’t need any of these politicians.”
But the $164,000 Grant paid Pugh for her amateurish children’s books as she ran for mayor and while he held a lucrative city contract has come under new scrutiny after Pugh’s guilty plea last month to federal conspiracy and tax evasion charges.
In a plea deal with Pugh, prosecutors alleged that Grant was aware she was inappropriately funneling funds into her political campaign, and “knew that providing money to Pugh’s campaign via Pugh’s company was a violation of Maryland’s election laws.”
Grant earned his fortune over the past two decades through financing contracts with municipalities, including Baltimore.
Now some are calling for Grant’s master lease with the city — under which the city acquires expensive equipment using his financing firm, Grant Capital Management — to be revoked.
Others say that would be a rash rush to judgment against a man who has repeatedly proved his good intentions for the city.
Grant has not been charged with any criminal wrongdoing. But some in the city, including Clarence Mitchell IV, scion of a prominent Baltimore family and radio host of the C4 Show, say Grant should be heavily scrutinized given the prosecutors’ assertion. His paying Pugh for books, after having already maxed out on individual contributions to her campaign and while collecting millions on the master lease, smacked of impropriety, Mitchell said.
“He may be doing a good job, I have no idea. But they need to pull all these contracts out and redo them to ensure the taxpayer that everything has been done appropriately. We’re due that as taxpayers,” he said.
Others believe Grant was hustled by Pugh, defrauded like her other customers.
“Nobody before this thought she was involved in anything. People did business with her in trust,” Bahar said. “That’s the way big business and philanthropy works. It’s built on trust.”
Grant declined to be interviewed for this article.
The City College alumnus, who went to Harvard University but did not graduate, worked for IBM before sensing there was a business to be made helping municipalities afford big purchases of equipment like computers. He took a leap of faith to start his own company, and has said he turned a $2,000 investment from a family friend more than 20 years ago into what is today a thriving financial firm.
Financing agreements with municipalities across the state and country have been worth hundreds of millions to Grant’s firm since its founding, and are the source of his largess.
In 2010, Grant found out there wasn’t enough money to keep city pools open for the summer and cut a $90,000 check to ensure a full season. Two years later, he stepped in to run the Baltimore Grand Prix and pay its vendors, despite knowing he’d take big financial losses, after other backers of the beleaguered road race came up short.
The current controversy is not the first to touch Grant. He was in the spotlight in 2000 after receiving a no-bid contract for energy upgrades at 30 Baltimore City Public Schools from a friend who worked for the school system as its business officer. The deal was worth eight times the industry standard, and was awarded soon after Grant and the schools employee went on a luxury Puerto Rican vacation together. The friend and another schools official both resigned within months.
This year, Grant disclosed to The Baltimore Sun in early April that he had given $100,000 to Pugh for her Healthy Holly books and received a single book in return. He said Pugh had described having copies printed and distributed to schoolchildren, but that he never asked for proof.
“I thought I was doing something good,” he said at the time.
In Pugh’s plea deal, prosecutors said Grant gave Pugh a total of $164,000 for Healthy Holly books in a series of payments before the 2016 mayoral primary and general elections. He, his family and his company also gave large amounts to Pugh’s campaign, with Grant making the maximum individual contribution of $6,000.
Last year, Pugh voted as a member of the city’s spending board to renew the master lease contract with Grant Capital Management. The value of the contract increases the more the city buys under it.
Critics note that Grant has given campaign contributions to Mayor Bernard C. “Jack” Young, who took over for Pugh; City Councilman Brandon Scott; and Comptroller Joan Pratt, all of whom are Democrats who sit on the spending panel that approves expenditures under his contract.
Scott announced this month that he was returning Grant’s campaign contributions and calling on the Baltimore inspector general to review Grant’s city contracts, including the master lease. He and Pratt abstained from a vote on a more than $13 million expenditure for radios for police under the master lease, while Young and his two appointees voted to approve it.
“At this point, they’re just allegations, and I don’t think the mayor or the council want to run city business on the basis of allegations,” said City Solicitor Andre Davis, a former federal judge who voted for the expenditure. “We need to wait and see what develops.”
On Wednesday, the spending panel approved an additional $634,700 master lease purchase — for air compressors for city vehicles — despite a motion by Scott to defer master lease votes until a review is completed or competitive bids are collected. Finance Director Henry Raymond said the city is expediting a search for another master leaseholder, saying it’s good to have more than one “competing against each other so the city could get the lowest interest rate.”
Scott, who is running against Young in the 2020 mayoral race, is alone in saying he would return contributions from Grant. Young has declined to do so, with his campaign spokesman Myles Handy saying Grant “hasn’t been convicted of any wrongdoing, and the mayor doesn’t feel the need to judge before a court does.”
Joanne Antoine, executive director of the watchdog group Common Cause Maryland, said the city doing business with Grant is concerning, “especially now that we have knowledge that he knew … that his money was going to Pugh’s campaign in violation of campaign finance rules. … It leaves the public, more than anything, in this state where they are concerned again that the city is in some way showing favor to this individual who has been making millions.”
Mitchell suggested the city should be putting every contract connected to a Healthy Holly purchaser, not just those linked to Grant, through tough scrutiny.
“They need to look at the contracts and do them all over again,” he said. “It’s just a sordid, ugly affair.”
Pugh admitted selling and reselling the same Healthy Holly books to a slate of big organizations with business before the city, at times diverting the money for personal use or toward her political campaign without paying taxes — and sometimes without ever printing the books.
Some entities gave in greater amounts than Grant, like the University of Maryland Medical System, which paid her $500,000 for 100,000 books over the course of several years, including during a period when she was a state senator and backed legislation the hospital system wanted.
After The Sun brought to light in March the UMMS deals with Pugh and with other hospital system board members, former medical system CEO Robert Chrencik and other hospital executives resigned, and most of the board was replaced under a mandate from angry Annapolis lawmakers.
Pugh and her aide Gray Brown Jr. were the only ones criminally charged in the scheme. Like Pugh, Brown has pleaded guilty to federal charges and is awaiting sentencing.
The former mayor also faces a state charge. On Wednesday, State Prosecutor Charlton Howard charged her with perjury for failing to disclose her book business on Maryland ethics forms during her time as a state senator.
“I really don’t think he was trying to buy some political in, because the man is already connected.”
“It leaves the public, more than anything, in this state where they are concerned again that the city is in some way showing favor to this individual who has been making millions.” — Joanne Antoine, executive director of the watchdog group Common Cause Maryland, on why she’s concerned with Baltimore still doing business with J.P. Grant