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Creative Accounting

Lawsuit Against Deadbeat Candidate Shows How Political Spending Can Go Unreported

Frank Klein
PAYBACK TIME: A recently dismissed lawsuit against Anthony McCarthy, relating to his failed 2006 bid for state Delegate, raises questions about a potential loophole in campaign-finance law.

By Van Smith | Posted 2/7/2007

Mayor Sheila Dixon's new communications director, Anthony W. McCarthy, was sued Dec. 15 by Dixon's new deputy transportation director, Jamie M. Kendrick, over $4,847.61 in bills involving McCarthy's unsuccessful 2006 campaign to become a Democratic state delegate. McCarthy's campaign treasurer, Jason M. Young, and chairwoman, Rose M.P. Taylor, were also named as defendants. Both have asserted in statements on file at Baltimore City District Court that they knew nothing of the expenditures until the lawsuit was filed.

Kendrick and McCarthy, who have traveled in overlapping political circles for years and were known as friends, had not yet been hired by Dixon when Kendrick sued. Kendrick says he has since filed papers to have the suit dismissed after discussions with McCarthy that began once the two saw each other at the new mayor's Jan. 18 inauguration and realized they now have the same boss. A copy of the stipulated dismissal notice, dated Jan. 29, was provided to City Paper by Kendrick. It states that the matter is over as long as McCarthy repays the full amount by July 1, and that all claims against Young and Taylor are dropped.

Thus, a trial was averted that would have focused on the money trail behind a large McCarthy campaign mailing paid for by Kendrick right before last year's primary election. The records in the case appear to show that McCarthy contracted for Kendrick's services, but that his campaign treasurer and chairwoman were never informed of the deal. Thus, the expenses weren't accounted for in financial reports filed with the Maryland State Board of Elections.

The elections board's campaign-finance director, Jared DeMarinis, says that this may not constitute an election-law violation because a candidate cannot be held legally accountable for faulty campaign-finance reports. Only the reports' signatories-the campaign treasurer and chair-are responsible for making reports accurate to the best of their knowledge under penalty of perjury. Thus, it appears that a candidate can rack up unreported expenditures without fear of prosecution-as long as the campaign's treasurer and chair don't report them because they don't know about them.

"You're going to have to call the state prosecutor on that one there," DeMarinis says when presented with this possibility. The Office of the Maryland State Prosecutor declined to make a statement about the matter, though assistant state prosecutor Steve Trostle said he's not aware of any such case being prosecuted in the past. Since the only remaining avenue for such expenditures to come to light publicly is by a court claim, such as Kendrick's, the remaining question is whether candidates do this with any sort of regularity, fueling an unreported political economy. On that, opinions are divided.

"Sure, I've heard of it," veteran local political consultant Arthur W. Murphy says when presented with the pattern that's presented in Kendrick v. McCarthy. "It's as common as a cold. A campaign runs out of money, or the treasurer doesn't know about it, but I would be very surprised if it was done for fraud."

On the other hand, former state senator Barbara Hoffman says she has seen a lot in politics over the years, but not this. "Yes, it's true the candidate can't be held accountable for false filings," Hoffman says. "But for a candidate to go out and take on campaign expenses and not tell the campaign? Something can be legal and also be dishonest. Why wouldn't you just pay for it through the campaign? If you don't have the money, take it as an outstanding obligation and pay it off. It doesn't make any sense."

Kendrick's is not the only lawsuit filed against McCarthy that arose from his '06 campaign. The caterer for McCarthy's campaign kickoff event last January, Whitney Conneally, sued in June for $643.68, after sending a series of exasperated letters to McCarthy, asking for payment. Once the lawsuit was filed, the campaign committee paid the caterer.

McCarthy, reached by phone Feb. 1, declines to comment on this article. "I'm going to have to just not comment about this story," he says. Other than to explain his lawsuit dismissal and how it came about since Dixon's inauguration, Kendrick says he too is "not prepared to comment for your story." Taylor could not be reached for comment, but Young, asked whether he believed McCarthy intentionally withheld from him information about the campaign expenses, says simply, "I don't know." Young adds that Kendrick's allegation of an unreported campaign expense is "quite a problem"-and in the same breath calls it a "baseless and frivolous claim."

With few details being offered on the record by the parties involved, the case file has to speak for itself. The documented expenditures were incurred by Kendrick just prior to-or, in one case, the day after-the Sept. 12 primary. They paid for the design, printing, and mailing services of a McCarthy campaign flier that, the invoices indicate, bore a message from 7th District U.S. Rep. Elijah Cummings and were sent to 11,574 voters of Baltimore City's 44th Legislative District, where McCarthy was running for delegate.

Kendrick's complaint states that he billed McCarthy when the services were delivered but was never paid. The campaign committee, Friends of Anthony McCarthy, raised and spent $27,502.15 before closing down Oct. 26 with a zero balance and no outstanding obligations reported. So, faced with a campaign no longer open for business, Kendrick went to court to get the candidate and his campaign officers to repay him instead. McCarthy did not file a statement in response to the allegations, but Young and Taylor did, asserting they had no knowledge of the transactions.

Hoffman wonders why Kendrick paid for the campaign expenses himself, rather than having the committee remit payments directly to the service providers. "I've never known vendors that front for a campaign, especially toward the end," she says. "You have to get paid-it's business, and sometimes campaigns run out of money." With Kendrick keeping mum, it's anyone's guess why he paid for McCarthy's campaign expenses.

Kendrick's lawsuit underscores the track record of money problems that often pursue McCarthy in the courts. A minister, journalist, occasional political candidate, and chief of staff for Dixon when she first became City Council president in 1999, McCarthy has had to juggle a whole host of court judgments filed against him, often over personal loans. As a result, his wages have been garnished from every known employer he's had in Baltimore since he arrived here from Washington, D.C., in the mid-1990s and took a job as a reporter at the Afro-American.

McCarthy has been charged criminally twice for money-related crimes-for cutting a bad check in Baltimore County in 1999, and for failing to return rented living-room furniture and a television to a city rental company in 2003. Prosecutors declined to pursue either case. The '03 case ended after an attempt to serve McCarthy with court papers at his address listed on the rental agreement failed, and it was discovered he had moved out 10 months earlier. Since Baltimore County only retains summary information about district court cases that are more than three years old, what the 1999 case was about and why it was dropped could not be learned in time for this article.

Making rent has been a problem for McCarthy at times as well. In a 2002 civil case, his former landlord on Mount Royal Avenue won a $1,945 judgment against McCarthy after he "skipped out owing the landlord rent," the case file states. Dudley Clendenin, a book author and former New York Times national correspondent and editorial writer who says McCarthy was his housemate at a Clendenin-owned residence in Bolton Hill, called City Paper after the plaintiff in one of the personal-loan judgments against McCarthy told him an article was in the works that touched on McCarthy's money problems. Clendenin says he had to take extraordinary measures to get repaid for rent money McCarthy owed him.

"He would tell fantastical stories when he was late with the rent," Clendenin recalls. "I took them at face value, but he owed about $1,000, and after he moved out he didn't return phone calls and didn't pay me back. Then, last year he was running for office and was coming to Bolton Hill to appear at a meeting. I told him I would be there and bring up this issue, and so I received a series of money orders that repaid the debt.

"I've been a recovering alcoholic for 18 years," Clendenin continues. "And I understand compulsive behavior. I've known Anthony for years, and loved him as a friend and household companion, and I learned from him. He's a smart, talented, gifted, and valuable person who has a tremendous amount to offer the political and cultural life of this city. But he has this one big flaw, and you can get help for it, and I hope he does. The piece you're doing was inevitable, and it is probably the only way he'll get help."

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