Parris N. Glendening's first campaign for governor allegedly received illegal contributions through employees of Nathan A. Chapman Jr., a money manager whose interests Glendening later promoted, an FBI agent testified Tuesday.
The agent, Steven Quisenberry, said two Chapman employees told the FBI that on behalf of their boss, they "funneled money to the governor" for the 1994 gubernatorial election. Quisenberry did not say how much the employees contributed, but under state law the maximum would have been $4,000 each.
The testimony, in U.S. District Court, was offered to explain the FBI's interest in ties between Chapman and Glendening (D), his longtime political ally, in the early stages of a fraud investigation into Chapman and his companies.
Quisenberry said the FBI has not concluded that Glendening was aware of the "straw campaign contributions" that Chapman allegedly made through the employees. He said charges could not be brought against Chapman or the employees because the statute of limitations had expired by the time the bureau learned of the contributions, late in 2002 or early the next year.
During the Glendening administration, Chapman managed $140 million from the state pension fund through one of his companies. Chapman is accused of defrauding the fund by investing a portion of that money in his own struggling companies, losing nearly $5 million in the process.
Federal prosecutors also allege that he improperly took more than $500,000 from his companies, spending a portion of that money on mistresses and failing to account for any of it as income.
Testimony concluded Tuesday, and closing arguments are scheduled for Thursday. Chapman did not testify.
Glendening has emerged as a significant figure in the trial, with the defense arguing that Chapman was a consolation prize in the federal government's failed pursuit of the former governor. Glendening has been mentioned more than 50 times; his former chief of staff, Major F. Riddick Jr., has been mentioned at least 70 times.
Glendening has not responded to requests for comment in recent weeks and could not be reached late Tuesday.
One pension board trustee has testified that Glendening lobbied him personally to increase Chapman's investment portfolio. Other witnesses have said they were pressured by Riddick.
In his testimony, Quisenberry offered the first public insight into a theory, considered by investigators, of what administration officials might have received in return. In light of Chapman's extensive political connections, Quisenberry said, "one of the theories could be that the money [Chapman took from his companies] was used to pay bribes."
In court filings, the government has said it had considered a "pay-to-play" scheme in which Chapman would have given money to public officials in exchange for state business.
But until Tuesday, the jury had not heard the theory.
"We had gotten information from two former employees of Mr. Chapman that they had been used to make straw campaign contributions to . . . Glendening during the 1994 gubernatorial election campaign," Quisenberry said.
Straw contributions, which are illegal, are a way for an individual to contribute more than the law allows.
Quisenberry said bank statements corroborated one employee's claim to have been reimbursed by a Chapman company. He also said the contributions "certainly cast a shadow" over Glendening's decision in 1995 to name Chapman to the state university system's Board of Regents.