By David S. Fallis and Michael Laris
Washington Post Staff Writers
Monday, January 22, 2007
In 2004, Peter J. Knop, a wealthy Loudoun landowner, asked the county to allow his family company to build a vast entertainment complex with a theater and studios on his 1,000-acre property near Dulles Airport.
Lawrence S. Beerman II, then chairman of Loudoun's Planning Commission and a venture capitalist, had business plans of his own. He was raising money for the purchase of an Alabama-based trucking fleet known as Evergreen Transportation Inc., according to records and interviews. He brought that deal to the Knops, and they invested, Knop said.
Two weeks after the sale was completed, Beerman voted favorably on the Knops' entertainment center, helping it clear its first regulatory hurdle.
Beerman, who held sway over land decisions in Loudoun for nearly a decade, voted multiple times in favor of companies with which he had business ties, according to records and interviews.
His actions took place in a county where major land-use decisions have been dominated by a small group of public officials and their close allies in the development industry, The Washington Post found in a year-long investigation.
Beerman resigned abruptly from the Planning Commission in July after reporters conducted interviews about his ties to Knop and others doing business in Loudoun.
Beerman was part of a small group of public officials who assumed power in Loudoun in 2004 with the backing of a well-funded network of developers, a building industry group and others in the real estate industry. In the years since, some of those officials have worked closely with their backers, coordinating privately to ensure votes favorable to major projects, according to thousands of e-mails and other documents obtained under public records laws.
Beerman's relationships have drawn the interest of the FBI, according to two individuals who said they have been interviewed in recent months and asked to remain anonymous because of the sensitivity of the inquiry. An agent asked questions about Beerman's business activities and his actions on the Planning Commission, said one of those interviewed.
Debbie Weierman, spokeswoman for the FBI's Washington Field Office, would not say whether agents are conducting an investigation in Loudoun but said her office "is looking into reports of possible public corruption, unfair business practices and the like . . . in the Washington metropolitan area."
Beerman did not respond to written questions about his relationship with Knop.
Knop viewed Beerman as crucial to the family's development plans, according to e-mails.
In preparation for a meeting with Beerman to discuss possible Planning Commission concerns over the terms of the proposed entertainment complex, Knop wrote, "we need a script DETAILED as to EXACTLY what we want to say, give and get, and BEFOREHAND, reseaerch what he wants, so we have something to offer him." The 2004 e-mail was written to Kristen Kalina, a lobbyist Knop had hired to help promote his projects.
"Good, I agree," Kalina responded in an e-mail, which went on to discuss the size of the project and its potential impact on traffic. She suggested that she and Knop ask Beerman "to give us some insight as to what he has heard privately" from other planning commission members about Knop's proposed entertainment center. "Based on the fact that you just helped him out on the Alabama deal, he owes us this information. . . . I dont think he'll balk. Do you?"
Knop's company made a payment to Beerman for thousands of dollars while he was a planning commissioner, according to an interview with Knop's former accountant, Angela Kelleher. The money was connected to Beerman's efforts to resolve a land dispute between Knop and Greenvest L.C., a major developer, she recalled.
Kalina also remembered payments to Beerman, which she described in a deposition, although her statements were inconsistent about when the payments were made.Political Forays
Beerman and Knop have known each other for years, a period during which Beerman helped shape Loudoun's development as a rapidly growing suburb.
In 1992, Beerman was appointed to a citizens committee advising on development plans near Dulles Airport. In 1995, he was elected to the Board of Supervisors, where he positioned himself as the board's go-to person on financial matters.
"I was a step ahead of most people because I knew what they were talking about," Beerman said in an interview this summer. He later declined to answer additional questions from reporters.
Beerman lost his bid for reelection in 1999 and was defeated again when he ran for board chairman in 2003. But he still had a voice in development decisions: He served two years on the county's Sanitation Authority, which controls water and sewage lines, and in 2004 was appointed to the Planning Commission, a nine-member board that helps decide which projects can be built in the county. The commission elected Beerman its chairman.
Under Beerman's leadership, the commission abandoned its practice of publicly disclosing contacts with people who had business before the board. He said in an interview that he also encouraged fellow commissioners to "do our work independently" by talking outside of meetings individually to county staff and developers with pending proposals. He regularly backed major developments across the county, including large communities near Dulles Airport proposed by Toll Brothers Inc. and Van Metre Cos.
The work came naturally to him, he said. "If you're doing this for 15 years, you kind of get a feel for it," Beerman said.
Beerman, 46, lives with his family in Ashburn. He has a passion for golf and running, and he previously worked as an investment banker. During his years in local politics, he repeatedly met with developers and their advocates to discuss proposals, building strong ties in that world. His business colleagues say he is an affable dealmaker with a sensitive radar for opportunities.Work as a Loan Officer
In February 2003, Beerman took a job as a residential loan officer with George Mason Mortgage LLC, a major lender in Northern Virginia. He asked to be assigned to the company's account with Greenvest, saying he had a contact there, according to George Mason chief executive D. Gene Merrill.
Greenvest, led by co-owner Jeff Sneider, had joined forces with former supervisor Dale Polen Myers to back a slate of candidates in 2003 who were sympathetic to the building industry. Myers backed Beerman, who lost. He was nominated to the Planning Commission by another Myers protege, Supervisor Stephen J. Snow (R-Dulles).
George Mason had a preexisting relationship as a "preferred lender" with Greenvest's home-building arm, Cambridge, according to records and interviews. That meant customers in Maryland and West Virginia who purchased homes from Cambridge were promised discounts of $4,000 to $10,000 if they used a mortgage company from the list of two or three preferred lenders.
Beerman was a point of contact at George Mason for these loans and received commissions on the mortgages he handled, records show. While Beerman benefited, other Greenvest companies had proposals pending before the Planning Commission for billions of dollars in new homes. Greenvest companies make up the county's largest private landowner.
At some point, Merrill said, Greenvest executives became concerned about a potential conflict and canceled the arrangement until it was cleared by the commonwealth's attorney in October 2004.
In a four-page advisory opinion written at Beerman's request, Loudoun Commonwealth's Attorney James E. Plowman concluded that because Beerman's work was with Cambridge, he did not have a "personal interest" in Greenvest matters before the Planning Commission. In Virginia, conflict-of-interest laws generally prohibit officials from voting on matters if they have a personal interest in the outcome.
"One thing I tell people is just because something might smell bad, it doesn't mean it's a statutory violation," Plowman said in an interview, noting that home buyers were not forced to use George Mason.
But Plowman also encouraged Beerman to be mindful of potential conflicts -- if, for example, Beerman knew the Planning Commission was taking up a Greenvest project in which Cambridge would be one of the builders. In that case, Plowman said Beerman would be required to disqualify himself.
Beerman had told Plowman that from 10 to 25 percent of his loan business was from Cambridge. "His annual compensation from this would be expected to exceed $10,000 annually," according to the opinion.
Two other commonwealth's attorneys, when asked about Plowman's opinion, said they would have advised Beerman not to vote on any Greenvest matters, either because his actions could be a conflict or appear to be a conflict.
"It's easy to use your imagination and come up with all sorts of scenarios where Beerman, through his company, has a stake in Greenvest's overall success, which would have to be affected by getting the green light for new development," noted one commonwealth's attorney, who spoke on condition that he not be identified because of the sensitivity of the matter.
Three weeks after Plowman's ruling, Beerman began casting a string of votes favorable to Greenvest, including four that sharply increased the value of the company's land by allowing more than 1,800 additional homes to be built on almost 1,000 acres. That gave Greenvest companies the right to build seven times the number of homes allowed before Beerman's commission and the Board of Supervisors acted.
In a written response on behalf of Greenvest, attorney Francis A. McDermott said the company had no financial relationship with Beerman and had never paid him. There was, McDermott said, no "attempt to link" the preferred-lender arrangement "to favorable results" before county officials. "In short, Greenvest has never done anything improper, or attempted in any way to exercise improper influence" over Beerman's votes or opinions, McDermott said.
Beerman said in an interview this summer that he saw nothing improper about his work as both public official and mortgage lender.
"I don't have any conflicts," Beerman said. "If someone calls me for a mortgage, they call me out of the blue. . . . I can't stop somebody from calling me. They are not calling me because, 'Oh my gosh, he voted for it.' They call me because they got a referral, or they know me, or whatever."Business Ventures
When Beerman was on the Board of Supervisors in the late 1990s, he went to Peter J. Knop and described a cell tower venture.
"It's a great investment. What do you think?" Knop recalled Beerman asking.
Knop said he invested, one of three times he has put his money into businesses brought to him by Beerman. Two -- the cell tower venture and the trucking company -- occurred while Beerman was a public official, records and interviews show.
Knop said he also invested in a medical imaging business at Beerman's invitation.
"He puts together venture capital deals, and we participate in those deals," Knop said. "When he does a good deal, he gets a fee."
In the case of the Evergreen trucking company, the deal was a winner: The company's revenue and profits have grown substantially since 2004, according to company Chairman Sean Kish.
Knop is best known in Loudoun for his construction waste dump, an imposing mountain of rock, dirt and other material. Although it dominates the landscape on his property, known as Ticonderoga Farms, Knop has nevertheless crafted other ambitious plans for the land, including his vision of a "world cultural center" with an agricultural tourist attraction. The plans were later downsized to a corporate retreat and picnic pavilions.
His vision, however, did not include a plan by Greenvest to build hundreds of homes next door. Knop opposed the project, hoping to keep a buffer of undeveloped land next to his property.
Beerman, who was on the Planning Commission and later voted in favor of the project, stepped in and attempted to mediate in 2004, records show. In 2005, Beerman came out to the Knop property for two meetings, one of which included a Greenvest representative, according to an account by a Ticonderoga employee filed in court.
"We had floated various ideas because we know that he's close to people in Greenvest," Knop said in an interview. Knop is in business with his son, Peter R.Q. Knop.
Knop and his son considered a solution that would have paid Beerman handsomely: Greenvest would sell the Knops some of the property, and the county would allow Greenvest to build the same number of houses on less land, according to e-mails.
Under that scenario, "Larry gets 25k," Peter R.Q. Knop wrote in a 2005 e-mail that began "Beerman proposal."
Greenvest had rebuffed Knop's attempt to purchase the property the year before. And Knop said no payment was made to Beerman, noting that it would have been inappropriate. Knop said in an e-mail to his lawyer that he did not believe the ideas from the e-mail were presented to Beerman, calling them "internal thoughts."
In a lawsuit against the county, Knop challenged the development, saying it was incongruous in that area and should not have been approved. Attorneys in the suit took depositions from Knop's employees and others and obtained their e-mails, including the message from Knop to his lawyer.
Kelleher, Knop's former accountant, who described in an interview a Knop payment to Beerman, remembers it being for $5,000 and said she thought it was connected to the Greenvest dispute. She said she was certain it coincided with his time on the Planning Commission.
"I remember writing the check, because it was one of those, 'Hmmmm, should we really be writing this check to this man?' " Kelleher said. She worked for Knop until mid-2005.
In July 2004, Knop sent Kalina, his lobbyist, an e-mail demanding an "up to date list of ALL contributions made to ALL politicians and other groups" from 2002 through 2004. Knop was frustrated at a county official's skepticism about his entertainment center.
"This should include the 'consulting fee' of 7,000. paid to Beerman. . . . Also any other fees or retainers or other sums paid to people not in their official capacity (I would include . . . other fees paid to people on the inside," Knop wrote. "If we are ever to operate efficiently, AND win, this is something which better be done ASAP," he wrote, referring to the accounting of contributions.
Kalina, a tobacco and oil company lobbyist before she began working for Knop in early 2004, was asked in a deposition about that e-mail and the $7,000 fee.
"And he was a member of the Planning Commission at the time that this $7,000 consulting fee was paid. Isn't that right?" asked the attorney questioning her.
"Yes," she answered.
Later in the deposition, after answering further questions about the payment, she said she was uncertain whether it was ultimately paid to Beerman. "Maybe there was, maybe there wasn't" a payment, she said. She ended the deposition saying, "We had paid Mr. Beerman consulting fees related to other business activities for things that he did."
During the time Kalina worked for Knop, Beerman was on the Planning Commission.
Knop and his son said in an interview that the $7,000 was payment for Beerman's consulting work on a cell tower venture sometime between 2000 and 2002. Peter J. Knop said he used quotation marks around the words "consulting fee" because he believed Beerman had overcharged. As evidence of the consulting work, Knop's son later produced a copy of a canceled check to Beerman for $7,500 dated June 19, 2002.
Kelleher said the payment to Beerman that she recalled was more than 18 months later, when he was on the Planning Commission. The Knops did not respond to written questions about that discrepancy.
Knop said he has continued to work with Beerman over the years because he is good at what he does.
"His business is knowing, both in politics as well as in business, knowing where the deals are. And how do you find out where the deals are? You know -- and are on good terms with -- everybody. Larry is a very likable guy."
Staff researchers Madonna Lebling, Bobbye Pratt and Julie Tate contributed to this report.