The Pallottine Fathers Catholic order, which loaned Maryland Gov. Marvin Mandel $42,000 to help finance his 1974 divorce, also provided another $12,000 to Mandel's second wife, Jeanne, according to testimony today.
The purpose of the loan to Jeanne Mandel was not made clear today, but it was the first time her name was mentioned as a recipient of favors. Like the larger loan, it was laundered through several layers to conceal its origin, according to testimony in Mandel's corruption trial.
William May, an obscure Baltimore area car dealer who acted as intermediary for both loans, testified today that he was offered "a piece of the action" in a contract for constructing modular buildings in return for his role in the Pallottine transactions.
One month after signing the $42,000 check to Mandel, May said he was invited to the office of C. Dennis Webster. There he found Webster, Mandel's close friend, W. Dale Hess, Webster's uncle Donald H. Webster and Pallottine Chief Father G. John Carcich - all the principals in the laundering scheme.
Donald Webster was the accountant and investment adviser to the Pallottines, as well as Mandel's 1974 campaign treasurer. His nephew, C. Dennis, is a business associate an relative-by-marriage of Hess.
"Donald and I were talking." May remember today. "He said that a contract might come up on some modular buildings, and if it did, they would cut me in for a piece of the action."
Informed sources say that the contract referred to was the controversial Amalgamated Modular Structures Inc. ams contract with the state to construct portable classrooms. It is now at the center of a statewide investigation of contract irrequlorities. C. Dennis Webster was president of AMS at the time of the offer.
That is only a side issue, however, in the government's case against Mandel and five codefendants alleging fraud against the citizens of Maryland.
On the one hand, prosecution alleges, Mandel received gifts now totaling some $350,000 from codefendants Hess, Harry W. Rodgers III, William A. Rodgers, Irvin Kovens and Ernest M. Cory Jr.
In return Mandel is charged with pushing for legislation that would profit the businesses of his friends and codefendants.
In the spring of 1975, six months after the $42,000 loan, May said he got a phone call from C. Dennis Webster asking him if he would "write another check to Mandel for $12,000 and I said yes."
Webster drove over to May's automotive dealership and filled out one of May's blank checks, leaving May only to write his signature. The first time May said he knew that the loan was for Jeanne Mandel was when chief prosecutor Barret O. Skolnik showed him the canceled check with her signature on it.
C. Dennis Webster testified that the $12,000 loan had been arranged, as before, by Hess, his uncle Donald and himself with Father G. John Garcich of the Pallotine Fathers.
A check was written from the Pallottines to Baltimore County lawyer Charles E. Brooks, "a middle man," Webster said. Then Brooks wrote a check to Webster, Webster wrote a check to May and May wrote the final check to Jeanne Mandel.
Webster, who was granted limited immunity from prosecution for his testimony, told Skolnik he thought that the reason for the loan was that Mandel was behind on alimony payments.
"Why, Mr. Webster, if Mr. Mandel needs $12,000 for alimony payments, is a check made out to Mrs. Jeanne Mandel?" Skolnik asked.
"I really don't know," Webster answered.
Arnold M. Weiner, Mandel's lawyer, tried to get Webster to agree that "the governor or Mrs. Jeanne Mandel was very much in debt because of the fact . . . that the alimony obligation had made it very difficult for him to keep up his ordinary expenses, that he had a lot of other bills that he had to pay."
Webster said he didn't recall that.
May portrayed himself in testimony today as a man with very limited knowledge of these transactions. He repeatedly said he wrote out checks without asking questions.
For the first $42,000 check, May said he arrived at a party in September with three blank checks in hand as C. Dennis Webster instructed him.
"We walked in to the dining room table and I handed him a check. He wrote the check," May said. "He filled it out for $42,000 and I signed it . . . I don't think there was any explanation at that time."
When Skolnik asked him why he would give a blank check over not knowing how it would be used, May answered that he did it as a favor to Donald Webster. "If he told me to write you a check for $42,000 I would," May told Skolnik.
Because he "is not too good at reading and writing," May said he left the check-writing and a number of other accounting chores to C. Dennis Webster.