Moore recuses self from UA vote
His team creates blind trust to manage governor’s assets
Maryland Gov. Wes Moore plans to recuse himself Wednesday from a scheduled vote by the state Board of Public Works to decide whether to extend a warehousing contract with Under Armour.
Moore served on the Baltimore-based athletic apparel maker’s board, resigning after he won the election in November, and owned thousands of shares of the company’s stock.
A millionaire several times over after previous careers that included investment banking and running a national nonprofit, Moore faces numerous potential conflicts of interest between his holdings and the business of running the state. He previously disclosed he had direct roles or investments in more than two dozen companies, including Green Thumb Industries, a cannabis company with operations in Maryland.
Moore pledged during his campaign to be transparent about his financial interests and avoid conflicts if elected. Fagan Harris, Moore’s chief of staff, said the new Democratic governor plans to recuse himself from the state procurement board’s vote on the Under Armour contract and in any other “matters in which he has a financial interest.”
Moore and his staff, meanwhile, are in the process of creating a blind trust that will prevent the first-time public official from managing or knowing about his significant holdings. While Moore doesn’t plan to divest himself of his holdings, once they are in a blind trust he will have no knowledge of whether the trust manager keeps or sells the assets, Harris said.
“A blind trust, which is the highest ethical bar, removes the conflict,” Harris said.
The move, if approved by the State Ethics Commission, means the governor would be working under stricter ethical guidelines than his predecessor, Gov. Larry Hogan.
The former Republican governor maintained ownership of his successful real estate business and other companies throughout his two terms. In an agreement approved by the ethics commission that stopped short of a blind trust, Hogan said he would not get involved in his companies’ day-to-day operations but was able to receive updates from the trustees who managed his assets.
A certified blind trust, on the other hand, would prohibit Moore from knowing any details about his assets other than the amount of his overall income for filing personal income tax returns. Any communication between him and the trustee would need to be in writing and submitted to the ethics commission.
“It’s a very significant loss of control over your financial affairs,” said Amanda La Forge, Moore’s chief legal counsel who is working with his private lawyers to draft the trust proposal to submit it to the ethics commission in the next few months.
If the five-member commission determines the trust meets the criteria for certification, Moore’s team would then have 30 days to execute it before final certification. The process could be concluded by late spring or early summer, La Forge said.
The agreement language and the list of holdings initially transferred to the trust will be available to the public at the end of the process, La Forge said.
Moore’s financial interests
The public should get another look at the new governor’s assets before then, though.
All state government officials face an April 30 deadline to file annual financial disclosure forms with the ethics commission. The filings will cover the 2022 calendar year, revealing properties, sources of income and other assets, and gifts received by elected officials.
Moore’s disclosure last spring outlined a lengthy list of companies and holdings — from his job leading the Robin Hood Foundation, which he left in early 2021, to his involvement in firms that raised hundreds of millions of dollars to invest in or acquire other companies.
Moore, whose annual salary as governor is $184,000, earned about $1 million from Robin Hood in 2020, his last full year there, according to the group’s tax filings.
And while his financial disclosure required him only to reveal whether he had 1,000 shares or more of any individual company, filings with the U.S. Securities and Exchange Commission show he had 48,770 shares of Under Armour in October of last year — worth about $460,000 at Tuesday’s
price — and about 170,730 shares of Green Thumb Industries earlier in the year — worth more than $1.4 million.
Those companies offer examples of how the governor’s financial interests could overlap with state decision-making.
Under Armour has received $8.5 million in state tax credits and loans since 2016. And the Maryland Department of Health has paid the company more than $3.7 million to store personal protective equipment, medical equipment and other COVID-19 supplies at two warehouses since the pandemic began.
The Board of Public Works is considering Wednesday whether to extend that contract for six more months under the same terms for $312,000.
Green Thumb Industries, based in Chicago, has state licenses to grow cannabis and operate a dispensary in Montgomery County. It also donated to a political committee that pushed for the legalization of recreational cannabis last year. Under a proposed bill to establish that recreational cannabis industry this year, medical cannabis license-holders would have a chance to convert their licenses into new ones for both medical and recreational purposes.
A Moore spokesman said the governor considers the bill a “well-crafted piece of legislation.”
While Moore stepped down from Green Thumb’s board earlier in his campaign, he announced after Election Day that he had resigned from all other public and private board positions, including Under Armour and IAC Interactive Corp., which owns digital brands and media companies such as Dotdash Meredith, which runs magazines such as People.
Another was Longview Acquisition Corp. II, a company that raised $600 million in its initial public offering in 2021 with the intent of acquiring another company or companies “with a particular emphasis on the health care sector,” according to its now-defunct website. The company was liquidated and terminated in January after not commencing
any operations, according to SEC filings.
Moore helped start a separate, similarly organized company, Focus Impact Acquisition Corp., in 2021 but did not list it on his initial financial disclosure until after The Baltimore Sun asked about it in October. The organization, according to SEC filings, raised more than $200 million to invest in companies that intended to make a “social impact.”
An amended disclosure report filed afterward in October added the company to his list of offices held and the securities he owned. Another amended disclosure — filed more than a month after his November victory — added a company to a list of 27 businesses in which he previously disclosed an ownership stake.
That company, Zeal Capital Management, is a Washington, D.C.-based venture capital fund. Moore reported that he and his wife owned “under 3 percent” of the fund worth “$10 million and over.”
Moore’s staff did not respond to a question this week about why Zeal Capital and Focus Impact were not listed on Moore’s original disclosure.
Of those 27 other businesses, five were entities he started and solely owned — including a production company, which he used to produce a PBS documentary series in 2014 and another documentary in 2016, and Elevate Speakers LLC, which he valued at between $200,000 and $249,999.
Following the ethics commission’s disclosure guidelines, the values of his other investments were also listed only in ranges.
They included 21 limited liability companies registered in New Jersey and one Baltimore-based private equity fund, Camden Partners, founded by David Warnock, who ran as a Democrat for mayor in 2016. Moore reported having 3% to 9% interest in Camden Partners, though he did not list the range of the overall value of the company as he did for his other business interests.
Of those other LLCs, Moore reported having anywhere from less than 3% interest to up to 24% interest in firms that were valued in ranges such as “$1 million to $1,999,999”or “$2 million to $4,999,999.” Information for those firms, such as their partners or business missions, was not readily available.
Upcoming disclosure
Moore’s forthcoming annual financial disclosure this spring will provide updates to those interests he held in 2022. If a blind trust is certified after that, his 2023 report filed next year would disclose his holdings up until the moment the trust was certified. Any disclosures in other years would keep any assets in the trusts hidden from Moore and the public.
The governor is not required to wait until spring to file the annual disclosure with the ethics commission.
Lt. Gov. Aruna Miller filed hers Friday, revealing some stocks in mostly major brands like Google and Apple while reporting no additional business interests or board positions — outside of a couple of charities — for 2022.
Alfred H. Guy Jr., a retired professor and director of the University of Baltimore’s Hoffberger Center for Ethical Engagement, said it’s important for Moore to be transparent about his holdings and release the details of them as soon as he can.
“Especially if you have a Democratic-controlled state — House, Senate, everything — you’re saying, ‘Look, I’m not taking advantage of this. I’m not taking advantage of the one-party government right now. I’m actually being as transparent and as open as possible,’ ” Guy said.
He also said it’s crucial that Moore releases the specific language of the blind trust agreement, “because a lot of people skim over blind trusts,” and more transparency will help “guard against the conflict of interest.”
Hogan’s trust agreement drew criticism from transparency advocates who said the governor appeared to violate ethics laws by funding a highway project near several properties his company owned, though the ethics commission never publicized any violations or penalties against him.
While Hogan’s trust agreement was not finalized with the ethics commission until more than a year after he entered office, Moore’s staff is trying to finish his blind trust within his first six months.
Under Maryland’s guidelines, the ethics commission will consider specific criteria in Moore’s trust to certify it as blind.
For example, it must be “well diversified” in that it may not be largely tied to companies or industries. If the assets exceed $350,000 in total, more than 20% cannot be held in a single security and more than 30% cannot be held in a single industry or economic sector.
The trustees also must be completely “independent of and unassociated with the official or employee in both reality and appearance,” meaning his business associates and family members cannot control the trust.