The Pallottine Fathers religious charity, which claimed to be sending millions of dollars to missionaries in poor countries, was regarded as being "really in the lending business" by friends of Maryland Gov. Marvin Mandel, according to testimony today.
Harry W. Rodgers III, a Mandel friend and codefendant in the governor's corruption trial, testified that he and other codefendants borrowed $150.00 for one of their businesses from the Baltimore-based charity when they were having trouble getting loans through other channels because of the federal investigation of them.
It was also natural, he testified, to turn to the chief Pallottine fund-raiser. The Rev. G. John Carcich, when Mandel needed a loan in 1974 to help out with his divorce.
"Well," Rodgers said, "Father Carcich and the Pallottine Order were really in the lending business. They had advanced and made loans to developers, they had their own business, they owned motels and hotels and they were really a business operation."
Rodgers, the third and probably the last of the codefendants in the Mandel political corruption trial to take the stand, gave this blunt background to explain the $42,000 laundered loan from the Catholic order, which is one of the alleged benefits to Mandel.
In the multicount U. S. indictment Mandel is charged with receiving about $350,000 in benefits and gifts from his codefendants Rogers, his brother William A. Rodgers, W. Dale Hess, Irvin Kovens and Ernest N. Cory Jr. Those favors constituted bribes, federal prosecutors allege, hidden through layers of secrecy such as the Pallotine loan.
Now under state investigation for alleged misuse of funds Carcich was subpoenaed but so far has not been called to testify in this case because his lawyer contended that the priest was "too far away" in an unnamed foreign country to appear.
Other witnesses, however, testified that Carcich partied with Mandel at a private crab feast in 1974 where the governor received a $42,000 check to meet his alimony payments. The check eventually was laundered through firve parties to hide its origin.
Donald E. Webster, accountant for the Pallottines, testified earlier that there was a question of Catholic propriety since the priest did not want to be directly linked to a loan made to cover alimony. Carcich has been banished from the Baltimore archdiocese after it was revealed in an audit that only a small fraction of the funds raised by the religious order for poor people in foreign countries actually was used for that purpose.
Rodgers said that Carcich agreed to lend Mandel the money because he had been a "good governor ... very good for state aid for education, which had been very beneficial to the Catholic schools."
Later, when Rodgers found himself in an emergency situation like Mandel, he too turned to Carcich for a loan.
"At the time that we were involved in this investigation, we were having trouble getting loans ourselves." Rodgers testified. "... Dale and Bill (his brother) and myself, we borrowed $150,000 from them and paid them back in a 15-month period at 12 per cent interest rate, I believe."
During his cross-examination today, Rodgers ampliufied various business aspects of the benefits to Mandel and the Malboro Race Track purchase, which makes up the second part of the federal indicment.
For these benefits, the prosecutors allege, Mandel purposely lobbied for bills that would benefit the track that was then secretly owned by his codefendants. Mandel denied that he knew his friends owned the track and that his lobbying was done for the betterment of state racing.
Assistant U. S. Attorney Daniel J. Hurson asked Rodgers why he would conceal his ownership in the track, which is regulated by the state, when he never concealed his interests in other business concerns that have received about $7 million in state contracts since Mandel has become governor.
The difference, Rodgers said of the two types of business, was the "sensitive" nature of racing. Although Mandel himself approved a number of the contracts for his other business concerns, Rodgers said he kept the track purchase secret from the governor for fear Mandel would "leak it to the press" and thereby jeopardize the "economic stability of the track."
Rodgers also admitted to paying for another trip for the governor not mentioned before in the trial. After making a point for his attorney that he only paid for one vaction for Mandel, Rodgers was forced to "correct my testimony" when Hurson showed him a bill for $893.01 for a 1969 Miami flight for Mandel, his first wife and other codefendants.
Yet, Rodgers remained cool on the stand, never rising to anger as Mandel and Hess had done before him.
When Hurson presented him with a 1969 letter written by Kovens. Rodgers broke out in a light chuckle and said that the note was an example of Kovens' "sarcasm."
The letter commands Rodgers to do something about a state road in need of repair that led to a race track then owned by Kovens.
"I am beginning to believe that Governor Mandel better get rid of you as everyone tells me that you do not return calls," Kovens wrote.
Rodgers said he guessed that Korean wanted him to "run up to the State Roads Commission or some department and try to resolve his problems, which I didn't do; I never answered that letter."
On one of the business ventures that the prosecution charges is a favor to Mandel. Rodgers kept his patience while Hurson asked question after question about Mandel's lucrative "commission."
In that business venture, an Eastern Shore farm property on Ray's Point, Mandel was given a share worth about $40,000 for a contribution of only $150 because he deserved a "finder's fee," Rodgers said.
When Hurson pointed out that another partner in the venture actually found the property. Rodgers pointed out that it was Mandel who phoned him about the property so Rodgers could arrange for the financing and the other members of the corporation.
Hurson asked incredulously about "one $40,000 phone call," and Rodgers responded with a business lecture: "There have been some awful big real estate deals made on one phone call. The man who makes that phone call is the guy who gets the commission."
Mandel's name was erased from the corporate minutes and his name was never listed on the stock certificates, Hurson pointed out. He asked if this was not a bribe of sorts given Mandel at the same time the governor was promoting race track legislation that could benefit Rodgers' track.
"No," Rodgers said, smiling.
Hurson won no concessions from Rodgers on any of the other race track issues, especially the major point of motivation.
"Anything that has to do with race tacks is a vey, vey sensitive issue." Rodgers said, more sensitive than million of dollars in state contracts to friends of the governor?, Hurson asked.
Yes, Rodgers answered. "It was our intention from the very beginning not to reveal this information to the press ... we knew that any publicity on it would be adverse because of our ownerhip and our close relationship in politics to the governor."