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Cheap Rent for Regulators Spurs Concerns
For the racing commission to lease space at Pimlico Race Course "certainly doesn't look right," one state official said.
(By Don Wright -- Associated Press)
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John B. Franzone, a commission member whom O'Malley nominated in February for another term, said the lease would have no bearing on commission decisions.
"I never really thought about it in terms of a conflict," Franzone said. "Quite frankly, I could care less about the lease arrangement. We would never take that into consideration."
Lou Raffetto, the chief operating officer of the Jockey Club, said the arrangement was suggested by Hopkins and that Pimlico was happy to provide the space. He said he did not consider the request unusual because racing commission staff, including veterinarians and stewards, are frequently on site anyway.
But several state officials spoke out against the arrangement in recent days during interviews.
"I don't see how you can be looked upon as not having a conflict of interest as a regulator when the entity you're regulating is your landlord," said House Speaker Michael E. Busch (D-Anne Arundel). "It's a conflict, and I can't believe the Board of Public Works would approve something like that."
Comptroller Peter Franchot (D), who joined the board after the lease was approved, said there is at least an appearance problem.
"It certainly doesn't look right," said Franchot, who suggested that the arrangement would be no different from having the state's utility regulators lease space from Maryland's largest power company at a bargain rate. "No one would accept that. That doesn't pass the smell test."
Ehrlich, through a spokesman, declined to comment.
A spokesman for state Treasurer Nancy K. Kopp (D), who was on the board at the time the lease was approved, said she posed questions in writing about the lease and received a reassuring response from one of the agencies involved.
But Kopp now thinks the lease is "questionable policy" and should be reexamined, said Howard S. Freedlander, the deputy treasurer for external affairs.
Both the Jockey Club and its minority owner, Joseph A. De Francis, have been active campaign donors in recent years, a period during which lawmakers have debated the future of the racing industry and the possible legalization of slot-machine gambling at tracks.
The Jockey Club has contributed nearly $190,000 since 1999 to Democratic and Republican politicians and party committees, including a $4,000 donation to O'Malley after he won the election, according to State Board of Elections records.
De Francis, as an individual, has given nearly $21,000 to Maryland candidates and party committees during the same period, including contributions to both Ehrlich and O'Malley. In 2002, De Francis also contributed $200,000 to a national committee then led by Maryland Senate President Thomas V. Mike Miller Jr. (D-Calvert) that seeks to elect Democrats to state legislatures across the country.
