A federal grand jury yesterday indicted Maryland's top-earning lobbyist, Gerard E. Evans, and a Baltimore lawmaker, charging them with an elaborate scheme to defraud Evans's clients of more than $400,000.
The 11-count indictment on mail and wire fraud alleged that Evans deliberately led several paint and asbestos companies to believe that Del. Tony E. Fulton (D-Baltimore) would introduce bills that would hurt their interests in Annapolis even though the delegate had no plans to follow through on the legislation.
In exchange, Evans arranged for Fulton, who is a real estate broker, to receive a $10,125 commission for handling the deal when the lobbyist bought a historic building in downtown Annapolis for his law office a year ago, the indictment said.
Through their attorneys yesterday, Evans, 44, who lives in Davidsonville, and Fulton, 48, whose district represents West Baltimore, said they were innocent and would fight the charges in court.
Evans's attorney, Robert Bonsib, of Greenbelt, said Evans would continue to lobby through the legislative session that begins Jan. 12. Fulton's attorney, Richard Bennett, of Baltimore, the chairman of the state Republican Party, said Fulton would serve in the upcoming session. He said the lawmaker earned the real estate commission legitimately.
This is the second time the U.S. attorney's office in Baltimore has indicted Maryland's top-grossing lobbyist. Bruce C. Bereano, who held that distinction before Evans, was convicted of mail fraud in 1994 for charging his clients for entertaining legislators but using the money for campaign contributions.
Yesterday's indictment was the result of an FBI investigation that began months ago and was publicly disclosed when investigators subpoenaed city records in Baltimore in May. Evans's partner, John Stierhoff, also was under investigation.
Stierhoff was not charged, and a lawyer familiar with the case said Stierhoff had been given immunity by prosecutors and was compelled to testify before the grand jury. Stierhoff referred a reporter to his attorney, Joshua Treem, who did not return a call.
The indictment said that Evans drafted a letter that Fulton then put on his official legislative stationery and sent to then-Baltimore Mayor Kurt L. Schmoke in October 1998. The letter said Fulton planned to introduce legislation that would allow those suing lead paint and asbestos makers to seek damages based on the manufacturers' market share.
Evans also took a copy of the letter and doctored it to make it appear to come from the mayor's office, the indictment said. He distributed that faked letter to clients. His agreement with several of those clients called for Evans to receive larger fees if he had to fight market share legislation, the indictment said.
Four paint companies had hired Evans after facing a series of lawsuits in Maryland over their use of lead-based paints, said Conway G. Ivy, a spokesman for the Cleveland-based Sherwin-Williams Co., one of the lobbyist's clients.
"The purpose of that was to monitor legislative activity so the companies would at least have the chance to share their views with the legislators" if legislation was introduced, Ivy said. The companies fired the firm when they learned through media reports of the federal investigation.
The charges mean that Maryland's next General Assembly session will begin amid an ethical controversy for the third year in a row. In 1998, the session began with the ouster of a senator on ethics charges, and this year, the session started only days after the Baltimore Sun reported the real estate deal between Evans and Fulton.
The Joint Committee on Legislative Ethics cleared Fulton in that deal, saying he had filed the proper disclosure statement about his business dealings with Evans. But yesterday's indictment said Evans and Fulton "sought to conceal the existence of [their] scheme to defraud by presenting false and misleading information" to the ethics committee.
The House chairman of the committee, Kenneth C. Montague (D-Baltimore), said such an allegation, if true, might prompt a reopening of the committee's investigation.
"If, in some form or fashion, what was disclosed to the committee was misleading, then it doesn't comply with the ethics laws, and the committee would reopen the matter," Montague said. But the indictment alone does not prompt action from the ethics committee.
House Speaker Casper R. Taylor Jr. (D-Allegany) said Fulton had to be considered innocent until proven guilty and an indictment would not necessarily require legislative investigation. "It's very regrettable that we must begin another session with this kind of an ethical cloud over any member," he said.
Fulton has had to answer questions about his ethics before. Eight years ago, Fulton was tried and acquitted of misusing campaign money and diverting legislative money for campaign purposes.
Evans, who typically makes more than $1 million a year as a lobbyist, is among the best known figures in Annapolis political circles. He is a confidant of Senate President Thomas V. Mike Miller Jr. (D-Prince George's) and the former Democratic chairman in Prince George's County.
Miller said that "during this holiest of holy seasons, we would all be best served letting the accused take comfort and solace with their families." As for both men continuing their work during the session, he said, "the people in the General Assembly know each individual very well and can make up their minds how they intend to deal with them. I don't believe that anyone who knows them well will have any problem interacting with them."