Md. Businessman Mentioned In Probe of Former Senator

One of Maryland's most powerful political financiers personally intervened in the award of a construction contract that has become part of the state's largest federal corruption investigation in many years, according to the person who oversaw the project and later testified about the contract to a grand jury.

John Paterakis, whose fortune has allowed him to exert tremendous influence in state politics, insisted that a subcontract for a hotel he was building on the Baltimore harbor be given not to the lowest bidder but to the firm Poole and Kent, project manager Ronald James said in recent interviews.

Although Paterakis has not been accused of wrongdoing, James's account of the contract award, and of his grand jury testimony, thrusts Paterakis for the first time into the massive investigation that has led to the indictment of former state senator Thomas L. Bromwell (D). Bromwell has been charged with using his influence to benefit Poole and Kent in exchange for concealed payments and other favors.

Paterakis has served for many years as a financial backer and personal adviser to some of the state's top leaders. During weekly dinners with former governor William Donald Schaefer and other insiders at Da Mimmo in Baltimore's Little Italy on Monday nights, he weighs in on such matters as political appointments and deliberations over who should run for which office.

James said he testified that Paterakis made the hotel contract demand in 1999, over breakfast with Bromwell and another person now indicted in the probe: W. David Stoffregen, who until March was the president and chief executive of Poole and Kent. Never before, James said, had he been asked to take a subcontract from a firm that already had been selected and to give it instead to a competitor whose final bid was higher by more than $500,000.

"I must admit," James said, recalling the unusual meeting, "I don't know why the senator was sitting there. It's not like I contributed to his campaign."

James's account provides the most complete picture to date of a meeting that is mentioned briefly in the racketeering indictment returned last month. The indictment does not mention Paterakis or suggest he was involved in the decision.

Meanwhile, Baltimore County building records show that, less than a year after Poole and Kent won the $9.7 million subcontract, the company, which specializes in large commercial and industrial projects, installed the plumbing at a house being built by Michael S. Beatty, a senior executive with the development arm of Paterakis's business empire. The documents do not indicate the cost of the work on the house.

Beatty has not returned messages left in recent days at his home and office, at H&S Properties Development Corp.

Bromwell's Indictment

The racketeering indictment accuses Bromwell, who left the state Senate in 2002 to head a state agency, of using his influence to help Poole and Kent win a hospital contract with the University of Maryland Medical System, to speed payments and to settle contractual disputes in the company's favor. In exchange, it alleges, he received concealed payments of more than $190,000, free or discounted construction services at his Baltimore home and other favors.

The hotel subcontract is not among the benefits Bromwell is accused of improperly delivering to Poole and Kent. The meeting is described in the indictment as evidence of the close relationship between him and Stoffregen.

The 30-count indictment, outlining allegations of political corruption and minority contracting fraud, alleges a six-year conspiracy ending in 2004. Stoffregen and Bromwell have pleaded not guilty, as has the wife of the former lawmaker, Mary Pat, who was charged in some of the counts. Four others have pleaded guilty in the case and have agreed to cooperate with investigators.