The Prince George's County prosecutor began an investigation yesterday to determine whether county liquor board member Gerard F. Holcomb violated the law in his business relationship with a pizza parlor licensed and regulated by the liquor board.
The prosecutor, Arthur A. Marshall Jr., said the investigation is a preliminary step before he decides whether to present the case to a county grand jury.
Several Prince George's legislators said there should be an investigation and suggested that Holcomb resign his influential liquor board post if his close relationship with the pizza parlor's owners was found to be a conflict of interest.
Marshall said he acted after The Washington Post reported yesterday that Holcomb, a prominent banker and Republican fund-raiser, served as a business promoter and financial adviser for two years to the pizza parlor, Little Italy, in Marlow Heights.
Holcomb, 45, reiterated yesterday that "I know I didn't do anything wrong," but added, "I would have done some things differently if I had to do it over again.
"I would have held them the owners of Little Italy at arms length rather than develop a personal relationship with them and I would've documented things a bit differently," Holcomb said. "After this episode I'm certainly going to be very careful whom I do business with."
Holcomb, who holds the lone "Republican" seat on the three-member board, is a director of John Hanson Savings and Loan as well as president of John Hanson Service Corp., a subsidiary of the savings and loan.
The Post yesterday reported that Holcomb received cash payments of up to $100 a week from the pizza parlor and helped its owners obtain $577,000 in loans to expand their business. During this time, Holcomb led a vote on the liquor board against giving a beer and wine license to a potential Little Italy competitor.
Holcomb said his relationship was proper. He said the payments, which he stated varied in amount, were reimbursements for expenses he incurrred in arranging loans for a Virginia Beach branch of Little Italy.
In addition to the expense money, Holcomb also said he received regular cash payments of $250 a month for about six months from Little Italy to help pay off a loan he said he made to the Virginia Beach operation. Two former partners in Little Italy also alleged that Holcomb was actually a hidden partner in the pizza parlor, a claim that Holcomb has strongly denied.
Marshall said that "if the article is correct, it Holcomb's conduct is obviously a matter that should be reviewed by the grand jury. The potential for some criminal wrongdoing does exist." He also said Holcomb's involvement raised potential ethical problems.
Holcomb and the two other members of the liquor board have the authority to hand out and revoke lucrative liquor licenses and oversee the inspections of licensed establishments.
Maryland and county ethics laws generally prohibit public officials from being partners or holding a financial interest in businesses affected by the official's decisions. State and county officials said yesterday that it is unclear which ethics code covers the liquor board, a body appointed by the governor and funded through the county.
The state's alcoholic beverage laws, which differ from county to county, do not prohibit liquor board members in Prince George's from owning an interest in a licensed establishment. In several other counties, including Montgomery, such prohibitions do exist.
Yesterday Holcomb's two colleagues on the liquor board, chairman Robert S. Miller and Lee Roy Lee, said they were shocked by the disclosures of Holcomb's relationship with Little Italy. Miller said board members "shouldn't have anything whatsoever" to do with liquor establishments.
State Sen. Thomas V. (Mike) Miller, the chairman of the Prince George's senate delegation, said yesterday "I think an investigation is in order and if he Holcomb violated the canon of ethics he should step down." Miller, a Democrat, said he will push to clarify which ethics law governs the liquor board and to tighten prohibitions in the alcoholic beverage laws. Del. Frank B. Pesci (D-Prince George's) recently introduced a bill to that effect.
State Sen. John J. Garrity (D-Prince George's) said, "He Holcomb should've known better. You don't need a law to tell you what's right and wrong. I think he should step down. We can't afford any cloud of doubt over the members."
The relationship between Holcomb and the owners of Little Italy began in 1978, a year after the pizza parlor received its liquor license, and ended in 1980 after an effort to set up a Virginia branch failed, at great cost to everyone involved. Holcomb is suing one of the former owners, Andrew A. Chiacchieri, to recover $24,000 Holcomb said he loaned to the Virginia venture.