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Gov. Ehrlich Named Influential Developer for MD Construction-Financing Panel

Wed November 17, 2004 - Northeast Edition
CEG



ANNAPOLIS, MD (AP) Gov. Robert Ehrlich last year appointed an influential developer involved in a lucrative land deal in St. Mary’s County to a state board that approves financing for the huge public-sector and nonprofit construction projects in which his company is frequently involved.

The (Baltimore) Sun reported Tuesday, Nov. 2, that since February, Willard Hackerman has been an unpaid member of the Maryland Health and Higher Educational Facilities Authority (MHHEFA), which last year issued $489 million in tax-exempt bonds to 15 institutions, according to its 2003 annual report.

Many of the schools and hospitals hire Hackerman’s company, Whiting-Turner Contracting Co., as a contractor or construction manager for their multimillion-dollar projects.

Hackerman acknowledged the potential conflict of interest in a letter to the Maryland State Ethics Commission this year.

He promised not to vote on transactions that do or could involve his company, but said he wanted to serve on the board nonetheless.

“It is important to me, of course, that my proposed service on the MHHEFA board not limit Whiting-Turner’s current ability to bid on, and undertake, construction and construction management responsibilities with respect to health care or educational facilities for which the institution seeks MHHEFA bond financing,” Hackerman wrote.

“Consequently, I request an [ethics] exemption with respect to my Whiting-Turner ownership and employment relationship. I do plan, of course, to recuse myself from any board action with respect to a financing in which Whiting-Turner is the construction contractor or manager.”

Since joining the board, Hackerman has not voted on two of nine transactions presented to him, said Annette Anselmi, executive director of the financing authority.

Whiting-Turner, the nation’s 14th-largest contracting company, was involved in those.

“It’s just not a healthy situation for the state,” said Del. Peter Franchot, a Montgomery County Democrat who is examining Hackerman’s dealings on a contentious state land preservation issue.

“There are lots of boards where Mr. Hackerman’s expertise can be utilized, but this is not one of them,” Franchot said. “It’s not something that is desirable, and I’m surprised that the Ehrlich administration ignored the clear conflict that Hackerman himself highlighted.”

Hackerman did not return a telephone message from The Sun requesting comment Nov. 2.

Larry Hogan, Ehrlich’s appointments secretary, told the newspaper that the governor probably is not familiar with the Hackerman appointment given the volume of positions he fills.

The nomination request came from Sheila K. Riggs, longtime board chairman and a director of Provident Bank, Hogan said.

Hackerman fills a slot designated for a construction company representative, he said.

“We accommodated the request of the chairman of this commission, and we vetted it with the ethics commission,” Hogan said.

Hackerman has been in the news of late for his desire to purchase 836 acres of sensitive forest in St. Mary’s County, just months after it was bought for $2.5 million in taxpayer preservation dollars.

In documents describing the transaction, state officials referred only to an anonymous “benefactor” who would buy the land from the state for the same price, donate some of it to St. Mary’s County for schools, and eventually preserve the rest. Hackerman stood to receive a tax break in the deal worth approximately $7 million, as well as potential development rights to the property.

But environmentalists and legislative analysts have raised serious concerns about the deal. They said the state should not be acting as a middleman or broker to create a tax break for a private individual, and question whether Hackerman might develop the land — zoned for one home per 5 acres — instead. For tax reasons, Hackerman would not provide a written guarantee that the land be preserved, documents show.

State general services chief Boyd K. Rutherford has testified that Hackerman was allowed to select the land he wanted under a deal where the state would buy it and then promptly sell it back to him. The first half of the transaction was approved last November; the second half is pending.

Hackerman is a close ally of Comptroller William Donald Schaefer. Schaefer and Ehrlich frequently vote together to form a majority on the state Board of Public Works, which would approve the sale to Hackerman — if it is finalized.

Naming Hackerman to the financing authority does not provide the contractor with a competitive advantage on construction deals, said Anselmi, the executive director. By the time projects are ready for a vote, large construction companies are aware that plans for the facilities are in the works, she said.

“In my judgment, all of that has been in the public eye well before it gets to the authority,” Anselmi said.

Ethics exemptions are common, said Suzanne S. Fox, executive director of the state ethics commission, because many boards are, by law, made up of members representing fields being regulated or covered.

“You are still subject to things like abuse of prestige of office and misuse of confidential information, but you can serve on that board or commission,” Fox said.