Md. probes extortion claims
Thursday, June 24, 2010
The Maryland state prosecutor's office has launched an investigation into allegations that several elected officials and politically connected operatives in Prince George's County tried to shake down a developer who wanted to lease space to a county agency, according to a source familiar with the state probe.
Jonathan S. Shurberg, an attorney for developer Arun Luthra, said his client received a subpoena about a week ago to testify before a grand jury July 1.
"My client will be in front of the grand jury," Shurberg said. "He has been asked to, and he will go."
Deputy State Prosecutor Thomas M. McDonough said Wednesday that he could not confirm or deny whether an investigation is underway.
The state probe, first reported in the Gazette, is fallout from a civil suit filed in February by Luthra against County Executive Jack B. Johnson (D); Democratic County Council members Ingrid Turner (Bowie), Camille Exum (Seat Pleasant), Tony Knotts (Temple Hills) and Marilynn M. Bland (Clinton); a top Johnson aide, Iris B. Boswell; lobbyist Michael Arrington; and commercial real estate broker Charles Dukes.
Luthra makes a wide range of allegations against the defendants, including breach of contract, fraudulent misrepresentation and intentional interference with business relations.
In his suit, Luthra says he had several conversations with Johnson about the 10-year lease agreement, which amounted to more than $11 million. He says Johnson assured him that the agreement was a "done deal." As a result, Luthra says in the suit, he began to prepare his building for the county Department of Housing and Community Development. He says the work cost him more than $890,000. The deal was never closed.
John Erzen, a spokesman for Johnson, said county policy is not to comment on ongoing litigation.
Luthra alleges that after he reached an agreement with the county, Dukes approached him and said the lease agreement would "under no circumstances" be approved by the County Council unless Luthra paid him a 3 percent commission, totaling $341,000. Luthra did not agree to the commission.
"That's absolutely untrue," Dukes said of the alleged request for a commission.
Dukes said that he is unaware of a state investigation and that he has not been subpoenaed. He added that he knew about Luthra's lawsuit but that he has not been served in the suit.
Dukes said he met Luthra when Pamela H. Piper, former director of county central services, asked him to go to a meeting to discuss county leasing. He said that he has represented the county in leasing negotiations but that he was not involved in a lease agreement with Luthra.
Luthra alleges that Arrington then approached him and told him that he knew about the lease bill before the council and that he wanted Luthra to make a $50,000 contribution to the Prince George's County Presidential Inaugural Committee, which the suit says was believed to be run in part by Exum, Bland and Boswell.
After speaking with his attorney about whether a contribution was legal and how much he could give, Luthra donated $4,000, according to the suit. Arrington then told Luthra that because he did not make the $50,000 contribution, he should hire Arrington for $5,000 a month to lobby the council, Luthra alleges.
Arrington did not return a call seeking a comment.
In his suit, Luthra says Knotts came to his business and discussed the lease with one of his employees, Parvez Ahmed. The suit says Knotts told Ahmed that before the bill could be considered, Luthra would have to find 10 "diamond members" for a Sept. 29, 2009, fundraiser for Knotts.
"A diamond member is one who contributes $4,000, the legal maximum under Maryland law, and therefore defendant Knotts was asking Mr. Luthra to raise $40,000 in return for his support of the bill," the lawsuit states. The suit says Luthra declined to raise the money.
Karen Campbell, a spokeswoman for Knotts, Exum, Turner and Bland, referred calls to Stephanie Anderson, the county's attorney. Anderson did not respond to two phone messages.