Coun­cil leader seeks re­view of pacts

Columbia fi­nancier Grant bought Pugh’s kids books

Baltimore Sun Sunday - - NEWS - By Kevin Rec­tor and Luke Broad­wa­ter

City Coun­cil Pres­i­dent Bran­don Scott has asked Bal­ti­more’s in­spec­tor gen­eral to re­view the last five years of city con­tracts with Columbia fi­nancier and “Healthy Holly” book pur­chaser J.P. Grant.

The re­quest comes in re­sponse to fed­eral pros­e­cu­tors’ con­tention that Grant knew he was in­ap­pro­pri­ately fund­ing for­mer Mayor Cather­ine Pugh’s po­lit­i­cal cam­paign by writ­ing checks for her self-pub­lished chil­dren’s books.

“We are just try­ing to get all the facts,” Scott said Wed­nes­day. “This is about mak­ing sure that the city is op­er­at­ing the way that it should be.”

Scott also said he would be re­turn­ing cam­paign con­tri­bu­tions that he has re­ceived in re­cent years from Grant, the owner of Grant Cap­i­tal Man­age­ment and a ma­jor po­lit­i­cal donor in the city. He holds the city’s mas­ter lease, un­der which he serves as fi­nancier for an ar­ray of city pur­chases.

Grant de­clined to com­ment. In­spec­tor

Gen­eral Is­abel Mercedes Cum­ming said her of­fice was re­view­ing Scott’s re­quest.

The re­quest comes af­ter Pugh pleaded guilty last month to con­spir­acy to com­mit wire fraud, con­spir­acy to de­fraud the United States and two counts of tax eva­sion. The charges stemmed from a scheme in which she sold her self-pub­lished chil­dren’s books to or­ga­ni­za­tions and in­di­vid­u­als with busi­ness be­fore the state and the city when she was a state se­na­tor and then mayor.

Pugh ac­knowl­edged know­ingly seek­ing to de­fraud pur­chasers of her books, at times by re­selling the same books to mul­ti­ple pur­chasers or never print­ing the books at all. She paid lit­tle or no taxes on the wind­fall, she ad­mit­ted. Guide­lines sug­gest she could face five years in prison, pros­e­cu­tors have said. Her sen­tenc­ing is set for Fe­bru­ary.

In charg­ing Pugh, fed­eral pros­e­cu­tors largely cast the pur­chasers of her books as vic­tims to her scheme. Not Grant, who they alleged paid Pugh a total of $164,000 for Healthy Holly books.

In a stip­u­la­tion of facts to which Pugh agreed, pros­e­cu­tors wrote that a month be­fore the 2016 may­oral pri­mary elec­tion, Pugh ap­proached Grant with a re­quest for $50,000 for books, telling him she needed fi­nan­cial help for her cam­paign. Grant wrote a $50,000 check, pros­e­cu­tors said.

“Grant un­der­stood 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.”

Later in 2016, Pugh came to Grant again, telling him she wanted to buy a new home in which to en­ter­tain as mayor. He wrote her a $100,000 check, with “book do­na­tion” in the memo line, even though he un­der­stood some of the money would be go­ing to­ward Pugh’s new home, pros­e­cu­tors wrote.

Since 2003, Grant’s com­pany has held the rights to the city’s mas­ter lease agree­ment. Through it, he has fi­nanced mil­lions of dol­lars in deals. The ar­range­ment al­lows Grant to pro­vide up­front money quickly to do cap­i­tal projects and be paid back with in­ter­est over time. The Board of Es­ti­mates, un­der Pugh’s lead­er­ship, re-upped that mas­ter lease agree­ment with Grant Cap­i­tal Man­age­ment last year.

Among the deals Grant’s firm has fi­nanced is a $33 mil­lion up­grade to the city’s 911 sys­tem and a $53 mil­lion con­tract to in­stall en­ergy con­ser­va­tion sys­tems in

Bal­ti­more’s pub­lic hous­ing.

Scott said the re­view of Grant’s con­tracts helps show the pub­lic of­fi­cials are com­mit­ted to clean­ing up city pol­i­tics. “We have to make sure that ev­ery­thing that hap­pened was done the right way and above re­proach,” he said.

Scott said his cam­paign had re­ceived a total of $4,750 from Grant from 2015 to 2018, which it will re­turn in full. Scott is cur­rently run­ning for mayor and will face sit­ting Mayor Bernard C. “Jack” Young in the Demo­cratic pri­mary in April.

Young, who as­sumed the city’s high­est post upon Pugh’s res­ig­na­tion, has also re­ceived cam­paign con­tri­bu­tions from Grant. Young spokesman Lester Davis said the mayor would not in­ter­fere with con­tin­u­ing in­ves­ti­ga­tions by U.S. At­tor­ney Robert Hur, who brought the charges against Pugh, by “hy­poth­e­siz­ing or talk­ing about ‘what ifs’ ” re­lated to Grant.

“Con­sid­er­ing that Mr. Hur has in­di­cated that his work is not done, I don’t think the mayor is go­ing to be com­ment­ing on an on­go­ing in­ves­ti­ga­tion,” Davis said. “He wants to al­low the fed­eral gov­ern­ment to go about its work unim­peded.” Young had pre­vi­ously an­nounced a re­view of city con­tracts with other buy­ers of Pugh’s books.

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