BALTIMORE, OCT. 28 -- A key government witness today described arrangements to pay $60,000 in what he said were phony legal fees to Maryland politicians Clarence and Michael Mitchell to stop a congressional investigation of the New York-based Wedtech Corp conducted by their uncle.
But the witness, convicted fraud artist and former Wedtech vice president Richard Strum, said that after receiving the money the Mitchells did little to block the probe.
"We were not getting any results at all," Strum testified in federal court, and Wedtech abandoned its ties with the Mitchells.
He also testified that another prominent Maryland political figure, former state senator Harry J. McGuirk, played a role in setting up a meeting between one of the Mitchells and a Wedtech official.
Strum's testimony came in the second day of the federal conspiracy trial against former Maryland state senator Clarence M. Mitchell III and his brother, state Sen. Michael B. Mitchell, both Democrats.
The two men, members of a prominent black political and civil rights family here, are accused of accepting $60,000 to stop an investigation of Wedtech in 1984 and 1985 by the House Small Business Committee, then headed by their uncle, former Maryland representative Parren J. Mitchell. They also are charged with accepting $50,000 to instigate a congressional investigation of another firm competing against Wedtech for a multimillion-dollar military contract.
The committee was looking into numerous allegations, among them that Wedtech, a Hispanic minority government contractor, had received preferential treatment through White House intervention.
The Mitchell brothers have denied the conspiracy charges, acknowledging doing work for Wedtech but contending that it was legitimate legal services. Prosecutors have said Parren Mitchell was not involved in the alleged conspiracy.
During lengthy testimony today before U.S. District Judge Norman P. Ramsey, McGuirk's name also came to the surface. McGuirk, a longtime Baltimore political fixture who ran unsuccesfully for the Democratic gubernatorial nomination in 1982 and then for Baltimore City Council president this year, was described by witnesses as an intermediary in getting Michael Mitchell and Strum together to work against the congressional probe.
In another new development, defense attorney Abbe D. Lowell questioned the motivation of Parren Mitchell and his committee staff in pursuing Wedtech, suggesting in a question to one witness that they were prompted by "jealousy."
At another point, Strum acknowledged telling the grand jury that indicted the Mitchells in August that he had been told Parren Mitchell "did not favor Hispanic minority contractors."
Parren Mitchell could not be reached for comment.
Strum, 59, who is cooperating with prosecutors so that they won't charge him in connection with another Wedtech-related bribery case, told the jury that he arranged two meetings between the Mitchells and himself and other Wedtech officials.
At the first, on Sept. 25, 1984, he said he met with Michael Mitchell, an attorney, at Tug's Restaurant, a popular downtown Baltimore eatery, where "I asked if he could get rid of the problem" of his uncle's investigation of Wedtech. "He said he could help us . . . but it would require a fee, $25,000 or $50,000, I can't remember which."
Strum said McGuirk and two other intermediaries had helped set up that meeting and that McGuirk and the others were to receive $5,000 each from Wedtech for their help. The arrangement was abandoned, however, according to testimony, and Strum began dealing directly with the Mitchells.
A second meeting on Oct. 1, 1984, at Michael Mitchell's law office was attended by both Mitchell brothers as well as Strum, top Wedtech officials John Mariotta and Mario Moreno and Wedtech consultant Anthony Loscalzo. Again, according to Strum, the Mitchells agreed to help stop the investigation, this time demanding $50,000, paid shortly thereafter by check. The payment was accompanied by a legal retainer agreement, he said, "just as window dressing." Later payments totaling $60,000 were made both to halt the Wedtech probe and to instigate the probe against their competitor, he said.
Asked by prosecutor Gary P. Jordan how the Mitchells intended to block the probe, Strum said, "They didn't indicate how."