Nathaniel Exum, a state legislator from Prince George's County, sponsored or voted to enact several laws guaranteeing government contracts for minority firms at a time when he was employed by a paying and excavation company that has won more than $1 million in business through such programs.
The paying contractor, Jones & Artis Construction Co. of Landover, is a minority firm controlled by James L. Artis and Carl D. Jones, a close associate of Exum. Jones said he brought Exum into the company in 1977 and by the following year paid him a regulary salary and cut him in on the firm's annual bonuses as president of a subsidiary company. The subsidiary, Jones said, was set up to avoid union labor and "to help Nat."
Exum sponsored two bills and supported two others introduced by colleagues in 1978 and 1979 that sought to expand minority contracting programs in all Maryland state departments, Prince George's County and the Washington Suburban Sanitary Commission. The 40-year-old delegate supported or worked for three of the bills in 1978, a year in which he reported receiving $15,500 from Jones & Artis, according to state records.
Jones & Artis won two contracts worth $1.1 million dollars from the state in 1977 and 1978 under the programs, which are principally designed to route 10 percent of the state's business to minorities. In addition, the company has recently completed a $980,000 contract for the WSSC through another subsidiary. Although the firm is relatively large for a minority construction company, its business so far with Maryland ranks it below the state's most common minority contractors, state officials said.
In an interview, Exum, who was elected to the House of Delegates in 1974, denied any conflict of interest and said he had "made a point" of never allowing his legislative work to conflict with his business interests. He said he was not aware that Jones & Artis had worked for the state, and added that the subsidiary of which he is president has done its work in the District of Columbia.
"Anything that comes through here [the legislature] that concerns minority business, I withdraw from participation on it," Exum said. "I make a point of it." Exum noted that one year, he had withdrawn his name from one of the bills he was sponsoring on minority contracting and abstained from voting on it in the Prince George's delegation, though he later voted for it on the House floor.
Jones, who first met Exum when they were classmates at Howard University, said that "we have been careful to keep Nat away from State of Maryland work." He said, however, that there was no financial distinction between Jones & Artis and the subsidiary, Integral Construction Co.
"It [Integrall] is like a division or department of the company," Jones said. "We may bid under its name, but there is no difference as far as being a separate financial entity." Jones said Exum's job was to supervise work that Jones & Artis did under Integral's name. "The superintendent [of construction] reports to him, and the bookkeeper reports to him for any work that comes to his department," he said. He said Exum performed his duties "on a daily basis."
Before Jones & Artis hired him, Exum worked as a salesman for the building supply firm of former Prince George's delegate Andrew O. Mothershead and owned a McDonald's franchise in the county.
Under Maryland's present ethics law, Exum apparently would be "presumed" to have a conflict of interest on minority contracting programs because he was employed by a company that had "interests which could be affected" by the legislation. However, the law, which did not take effect until July 1, 1979, says that a legislator can still participate in areas where he is presumed to have a conflict of interest if he files a "disclaimer" statement explaining the apparent conflict and declaring that his judgment is not biased.
Exum said that he explained his position to the chair of the legislature's ethics committee -- which enforces the General Assembly's own rules for conflicts of interest -- in 1977, and was told only that he should disclose his interest in the Jones & Artis subsidiary. He said that requirement had been fulfilled when he listed the company on his annual financial disclosure form.
The story of Jones & Artis, Exum and the state legislation begins in 1977, when Jones & Artis won a contract ultimately valued at $1,098,000 as a subcontractor on a Baltimore subway project.
The contract was awarded by the state Mass Transit Administration, which had initiated the state's first minority business program by requiring its prime contractors to make efforts to subcontract 10 percent of their work to minority firms. Jones & Artis fulfilled that requirement on the subway project for the prime contractors, Traylor and Associates, Morrison-Knudson and Grow Tunnelling, according to state officials.
In that year's legislative session, which runs between January and April, Broadwater and Del. Decatur Trotter, who also represented Exum's 25th District, introduced legislation to make the 10 percent requirement mandatory for all state departments, but the bills were killed in committee.
Then, in September 1977, Jones & Artis incorporated Integral Construction Co. with Exum as president. According to Jones, Exum, who has a background in engineering, made no capital contribution to become head of the new subsidiary, but instead was essentially hired to become a "department chief," or "employe," of Jones & Artis.
When the next legislative session opened in January, Trotter again introduced the state minority contracting legislation along with a separate bill applying similar requirements to Prince George's County. Meanwhile, Exum drew up and introduced a bill requiring a minority contracting program for the WSSC and even had a study drawn up by a mathematician comparing the WSSC's contract awards to minorities with those to nonminorities.
The minority contracting programs were a major priority of the legislature's black caucus that year and, as Trotter remembers it, Exum was part of the "team" that worked for them. "It was a joint effort," he said. "All of us recognized the need to promote bills like this. I put in the state bill and the Prince George's County bill. Exum voted for them. He lobbied for them and did that WSSC program."
"That was Exum and those guys," said state Del. Gerard Devlin (D-Bowie) when asked if he remembered the minority contracting bills. "It was just the 25th district [Exum, Trotter, Francis Santangelo and Sen. Tommie Broadwater] -- it was the kind of bills that we just looked on as theirs, in general."
Another Prince George's delegate, Charles Blumenthal, who helped get the state bill out of the House Appropriations Committee, said Exum was not one of the visible leaders of the state bill. "If he did anything, it was behind the scenes," said Blumenthal, "because people knew at the time he was involved in a construction company. But he was the leader of the WSSC bill, and we assumed his company hadn't done any business with them."
Exum says now that he did not work actively for the statewide program, but legislative records show that he voted for it twice on the House floor and also voted for the Prince George's County measure. The state bill passed the House by votes of 95 to 3 on March 31 and 87 to 0 on the final day of the session in early April, while the Prince's George's measure was approved March 30 in a package of local laws by an 82-to-2 margin. The WSSC bill, which many delegates still remember as Exum's creation, was defeated that year.
Then, three months after the new state law took effect, Jones & Artis won a $16,000 contract from the State Highway Administration as a subcontractor on a roads project, once again filling the minority participation requirement of a white prime contractor, according to state officials.
Two months later, when the 1979 legislative session began, Exum appeared as a sponsor on two bills -- a different version of the WSSC legislation he had drawn up the previous year and a statewide bill that sought to eliminate an amendment that had been added to the state minority contracting bill the previous year against the wishes of its supporters.
The amendment had included women-owned businesses among the minority contractors that were supposed to get 10 percent of the state's business. According to Trotter, black caucus members felt they had to accept the amendment, which was offered in the final hours of the session, in order to ensure the bill's passage.
The 1979 bill sought to eliminate women from the 10 percent minority requirement by creating a separate 10 percent requirement for women-owned businesses. Exum says now that the bill was "to help woman-owned businesses" and had no relation to other minority contractors.
But Anne Perkins, a Baltimore delegate and women's caucus leader who also sponsored black legislative leaders "were unhappy that women were included as minorities. It was felt that women who were the wives of white contractors were getting business and taking it away from blacks."
The bill was eventually killed, but a WSSC minority program passed that year. Legislative records show that Exum was active in the discussion of the WSSC legislation in the Prince George's delegation, which first considered his bill and a similar WSSC measure, both of which proposed a minority "set-aside" program for contracts, rather than a percentage requirement. At an early January meeting, for example, Exum noted that he was working with the WSSC on amendments; at a later session, he noted that his bill and the WSSC's were "basically the same."
Exum says that he eventually withdrew his name from the WSSC legislation, and legislation records showed that he abstained from the votes in the Prince George's delegation, which passed the WSSC version by a wide margin and sent it to the full House.
Del. Frank Komeda, who was chairman of the bi-county committee of the Prince George's delegation, says he remembers teasing Exum because he could not vote for his own bill. Records show, however, that Exum voted for the bill on the House floor, where it passed, 92 to 21, March 3.
Shortly after the WSSC legislation was enacted, Jones & Artis made its first venture into the agency's contracting market. Another company controlled by Jones & Artis, P. G. Ccontractors, bid on and won a $980,000 WSSC paving contract. The contract was bid before the agency began offering contracts exclusively to minority bidders, but officials of the company said they were interested in doing more work for the agency after they completed the paving contract this year.
Exum did not report his 1979 earnings from Jones & Artis to the state, although he listed his subsidiary on his disclosure form. During the 1980 legislative session, Exum obstained from voting on bills related to WSSC contracting.
Jones said that his firm is still interested in Maryland state contracts but that the prime contractors who have called him recently to offer 10 percent shares "have expected us to do it for practically nothing. I just haven't had any luck with them, though maybe others have." Jones said, adding, "if Maryland has a minority program, you could have fooled me."