Maryland Senate President James Clark Jr. said Tonight that he would ask the Joint Committee on Legislative Ethics to determine whether Sen. Laurence Levitan (D-m/ontgomery) violated conflict-of-interest provisions by sponsoring legislation that would benefit one of his legal clients and increase legal fees to his law firm.
Levitan, a chief sponsor of emergency legislation designed to increase the availability of home mortgage financing, earns thousands of dollars in legal fees each year from a large mortgage banking firm whose loans he reviews. The fees are based on the number of loans given out by the firm, and would increase if more mortgage money became available.
Clark, who appointed Levitan to a powerful committee chairmanship last month, said he would refer the matter to the Ethics Committee, a panel representing both houses that issues advisory opinions on the ethical behavorior of legislators. The committee has no power to enforce its opinions.
A few minutes before Clark told a reporter he would ask for an advisory opinion, he listened to Levitan assert on the Senate floor that the disclosures of his legal relationship with a mortgage bank contained in Monday's Washington Post "were extremely unfortunate. I don't believe I have a conflict of interest."
"It's extremely unfortunate to be tried, in effect, and convicted in The Washington Post," he said. "I am a member of a large law firm and it's extremely difficult when you represent a broad group of clients not to support or vote on a bill that will benefit one of those clients. I try to work on bills that benefit the general class of people."
There are two sets of rules in the Maryland General Assembly that deal with conflict of interest questions. One, known as Senate Rule 19, says that no senator should "vote on any question in the result of which he has an immediate or personal or financial interest."
The second precept requires lawmakers to disqualify themselves from voting on any measure if his personal interest in the legislation conflicts with public interest. That occurs, according to the rules, if a legislator accepts a "payment of significant value" from a firm that would financially benefit from the bill at hand.
The emergency legislation sponsored and steered to the Senate last week by Levitan would lift the existing 10 percent ceiling on mortgage interest rate loans. Lending institutions, including Levitan's client -- Suburban Coastal Corp. -- are pressing for such legislation, saying current interest rates are too low to make loans profitable.
Once free of interest rate restrictions, mortgage banking firms like Suburban Coastal would be expected to increase the number of mortgage loans. In the case of Suburban Coastal, that means more legal work for Levitan's Chevy Chase law firm, which earns $75 for each loan transaction it reviews in Maryland, Virginia and the District of Columbia.
Levitan, who estimates that his law firm reviews "at least several hundred" loans annually for Suburban Coastal, obtained a state mortgage license seven months ago. The license enables him to earn commissions by helping investors or builders find financing for their projects.