An Odor at National Harbor
Time to clean up a $3.5 million slush fund

Saturday, May 5, 2007

THE TAWDRY saga of the $3.5 million fund arising from Prince George's County's negotiations to land the gigantic National Harbor development keeps getting tawdrier.

The money, scheduled to last a decade, began arriving two years ago in annual dollops of $350,000 from Milton V. Peterson, who is developing National Harbor on the banks of the Potomac. Some $700,000 has been dispensed, managed -- or rather mismanaged -- by a committee controlled by friends and allies of County Executive Jack B. Johnson (D). Members of the committee awarded tens of thousands of dollars to organizations that they either controlled directly or to which they had close ties, including some with no bank accounts or boards of directors. Another chunk, at least $10,000, was apparently distributed by Mr. Johnson himself during his reelection campaign last year. Other funds, amounting to more than $20,000, have simply disappeared, so far without explanation.

The story of the missing, misused and self-dealt money, detailed by The Post's Cheryl W. Thompson, Mary Pat Flaherty and Rosalind S. Helderman, is a textbook example of how not to handle public funds. The committee consists of seven members, three each appointed by Mr. Johnson and the County Council. The seventh member, Michael Arrington, who effectively runs the committee and keeps its checkbook, was named by the developer; in fact he is Mr. Johnson's close ally and political confidant. Little wonder, then, that Mr. Johnson, in the months leading up to his primary battle last summer, was able to present National Harbor checks to his allies at big, politically active churches. Little wonder, too, that some $30,000 of the funds were presented to a private school attended by Mr. Arrington's children and a Brownie troop to which they belonged.

The ethically tone-deaf Mr. Arrington is unrepentant. "My children benefit by going to the school," he told The Post. "I get no benefit at all." But Mr. Johnson expressed remorse for the way the National Harbor funds have been handled. He has pledged to fix the problem, saying that henceforth the money will be distributed transparently and according to strict criteria and procedures that will bar committee members from doling out funds to groups with which they have ties.

That is heartening, but it does not fully address the problem. For one thing, there is the question of what has become of the $20,000-plus that was reported as granted to charities in the county but in fact was never received. Another question is whether Mr. Arrington, who has demonstrated his untrustworthiness and his sense of entitlement, will continue to control the committee's checkbook: he shouldn't. Finally, all grant-making should be suspended pending a formal agreement with the Prince George's Community Foundation or some similarly established and experienced philanthropical group to clean up or abolish the National Harbor committee.

Mr. Peterson's third $350,000 check is scheduled to arrive this month. He should withhold it -- don't worry, the county will be too embarrassed to sue -- until Mr. Johnson and the council have fixed this mess.

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