Ottavio F. Grande, a close political ally of Mayor William Donald Schaefer, was convicted in federal court today of extorting $55,000 in kickbacks from contractors and aiding them in a scheme to defraud the city by fixing bids on demolition contracts.
Five contractors also were convicted in the bid-fixing scheme by a U.S. District Court jury that deliberated for more than 15 hours over three days.
The convictions are the latest to result from the continuing political corruption investigations by the Baltimore U.S. Attorney's Office. Those previously convicted include Maryland Gov. Marvin Mandel and the county executives of Anne Arundel and Baltimore counties. The resignation of Vice President Sprio T. Agnew four years ago also was a result of the investigation.
The demolition contracts on which the Grande case focused involved projects in the city's urban renewal areas during Schaefer's massive drive for revitalization in the early 1970s. Several of the contracts that Grande and the five contractors were convicted of fixing involved one of Schaefer's favorite projects, rejuvenation of the Inner Harbor, once a blighted warehouse area that now contains sparkling concrete and glass high-rises, a new federal courthouse and a World Trade Center.
The jury found that two of the convicted contractors must forfeit their financial interest in their companies to the federal government under an antiracketeering statute that is increasingly being used by the federal prosecutors in political corruption cases.
One is Gerald W. (Buzz) Berg, 47, president of the Buzz Bert Wrecking Co., one of the largest demolition firms in the state. The jury found that Berg owns and must forfeit 50 per cent of the company.
The other contractor required to forfeit a 50 per cent interest in his company is Joseph Tuller, 66, president of the State Wrecking Co. of Maryland in Silver Spring.
The other three contractors convicted were Andrew Hawthorne, 43, an executive of Robert L. Hawthorne Inc. of Philadelphia; Edgar Hawthorne, 52, Andrew Hawthorne's uncle, and Pietro Castagna, 54, president of Castle Construction Co. of Baltimore.
Prosecuting attorneys Joseph M. Fairbanks and Gerald P. Martin said the contractors defrauded the city by fixing prices at a higher level than they would have been if bidding had been competitive.
Grande, 55, who was deputy director of the city's Public Works Department, was accused of aiding the scheme in return for a 5 per cent kickback by supplying the contractors with information about jobs and sometimes designating a particular firm to get a contract.
Grande was convicted of 22 counts of mail fraud, seven of extortion, one of obstructing justice and eight of tax violations.
Charges against the five contractors included racketeering, mail fraud, obstruction of justice and extortion.
Maximum penalties are five years and a $1,000 fine for each mail fraud conviction, 20 years and a $10,000 fine for each racketeering conviction, 20 years and $10,000 for each extortion conviction and five years for each obstruction of justice conviction.
Judge Edward S. Northrop has not yet set a date for sentencing.