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Lipscomb takes deal; Court filings also implicate Paterakis

By: Brendan Kearney
June 22, 2009

Ronald H. Lipscomb, the Baltimore developer at the heart of the years-long investigation into City Hall, has pleaded guilty to a campaign finance law violation.

With the plea deal, Lipscomb avoided Monday’s scheduled trial on a more serious bribery count and became a crucial witness in the state prosecutor’s cases against Mayor Sheila A. Dixon, City Councilwoman Helen L. Holton — and, potentially, fellow developer John Paterakis.

Appearing in court for the first time since he was indicted in January and standing in a dark suit between his attorneys, Lipscomb admitted sponsoring, through his company Doracon Contracting Inc., a $12,500 political poll for Holton.

Nearly half the cost was paid for by Paterakis, the bakery magnate, Lipscomb claimed in court documents. An individual may only contribute $4,000 to a single candidate in a four-year election cycle.

Prosecutors agreed to recommend that Lipscomb, 53, pay a $25,000 fine and complete 100 hours of community service as part of the plea. He is not likely to receive a prison term at sentencing on Oct. 22 before Visiting Judge Dennis M. Sweeney.

He will also be required to cooperate, and potentially testify, in the cases against Mayor Sheila A. Dixon, which is set to start after Labor Day, and Holton, the case against whom was dismissed late last month but which is on appeal.

State Prosecutor Robert A. Rohrbaugh, whose prosecutions of the City Hall cases have been closely watched, said he is satisfied with the guilty plea, noting Lipscomb’s agreement to cooperate is an “important ingredient” in the deal.

Rohrbaugh would not say how long he has known about the alleged Paterakis contribution or whether charges are forthcoming against the patriarch of H&S Bakery and H&S Properties Development Corp.

“All I can tell you is we don’t discuss what we may or may not be doing, but Mr. Lipscomb has agreed to cooperate,” Rohrbaugh said.

A criminal defense attorney not connected to the case, Joseph Murtha, said Lipscomb’s plea is going to make the related prosecutions “much more interesting” and any revived case against Holton, which failed because it relied principally on Holton’s votes as evidence of an alleged bribe, “a whole lot easier.”

As for Lipscomb’s implication of his fellow developer, “it would be hard to believe the state is not interested in going after Mr. Paterakis,” Murtha said.

Lipscomb’s lead attorney, Gerard P. Martin, said his client is “relieved this day has come” after five years of state and federal investigations and that Lipscomb will simply “say what happened” if called to testify in any upcoming cases.

“I wouldn’t call it testifying for or against anyone,” Martin said, adding that Lipscomb’s testimony “doesn’t add much” to the Dixon prosecution, which at this point consists of theft counts related to allegedly misused gift cards.

Lipscomb, who had been fined for excessive campaign contributions in 2005, “would probably never make another contribution as long as he lives,” Martin said, given the terrible toll the case has taken on his wife, college-age daughter and high school son.

According to the agreed statement of facts and plea agreement, Lipscomb had a $3 million stake in part of the Harbor East development when he, Paterakis and Holton met in July 2007.

Holton, without her campaign treasurer’s knowledge, asked the developers to cover the cost of the poll.

On July 30, 2007, Lipscomb cut the check to pollster Lester and Associates, and on Aug. 10, 2007, Paterakis drew up the reimbursement check in the name of J&B Associates, which was deposited in a Doracon account on Aug. 30, 2007.

Neither Paterakis’ lawyer nor a top deputy at H&S Properties returned calls for comment Monday.

Arnold M. Weiner, who represents the mayor, said if Lipscomb is called as a witness in Dixon’s September trial “and if he tells the truth, there’s no reason for any concern.”

“Today is about a crime committed by Mr. Lipscomb and Mr. Paterakis. I wish them well. Their problems have nothing to do with the mayor,” Weiner said.

Joshua R. Treem, who represents Holton, said he is “not at all” concerned about what Lipscomb might reveal.

“Quite frankly, given what the state has done right here, I think somebody should ask Mr. Rohrbaugh … how they can go prosecute the appeal in Holton when today they’ve acknowledged that the money that Mr. Lipscomb paid for the poll — the money allegedly paid as a bribe — wasn’t a bribe at all but was, in fact, a political contribution,” Treem said. “They should dismiss the appeal, is what they should do.”

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