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Executive Sweets

Corporate Cronies Close Ranks Behind the Wyndham

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By Molly Rath and Van Smith | Posted 4/15/1998

On Friday, April 3, a full-page advertisement appeared in The Sun's business section. It was a letter over the signature of Manekin Corp. president and CEO Richard Alter, slamming the Calvert Street crew for criticizing the proposed Inner Harbor East Wyndham Hotel, a city-supported project headed by baker/real-estate developer John Paterakis. The letter is cosigned by 73 other men and one woman.

Ignoring the paper's (and much of the public's) central criticisms of the project--that it costs too much public money and flouts a long-established development plan for Inner Harbor East--Alter wrote that The Sun "has portrayed the Wyndham Hotel story as if there was not any rational basis for the award other than Mr. Paterakis' influence and possible self-dealing."

But more remarkable than the letter itself is the list of signatories, which includes many of the biggest names in the city's corporate elite and speaks volumes to those interested in understanding the details of Paterakis' power network. Many have an obvious stake in the Wyndham's success, such as the Little Italy businesses that will surely benefit from hotel traffic. Many have intertwining business interests and prior business relationships with Paterakis. And since many donate extensively to local political campaigns, their signatures send a tacit message--support Paterakis or risk losing our backing.

Of the 75 signatories, roughly two-thirds have contributed to city election campaigns since 1993. Over this period, these individuals, their families, and their companies have given at least $108,795 to city elected officials' campaigns, of which $83,800 ended up in the coffers of Mayor Kurt Schmoke, according to a City Paper review of campaign-finance records. (Those figures represent contributions CP was able to identify as coming from the signers, their relatives, and companies; they are not a full accounting of donations because several elected officials failed to file their most recent campaign finance reports in Baltimore, as required by law.) Paterakis has given at least $13,700 to elected city officials since 1993, most of it through family members or companies he controls. Even a cursory examination of a sample of the signatories provides a telling picture of the web that wants the Wyndham.

Michael Angelos
Executive vice president, Adcor Industries
A former Maryland Port Administration director, Angelos was nailed by the Securities and Exchange Commission in 1996 for insider trading of Baltimore Bancorp securities. (He was ordered to pay more than $60,000 in fines and restitution and barred from involvement in the securities trade.) He is now with Adcor Industries, an East Baltimore aerospace-parts manufacturer. The president of Adcor, Jim Stavrakis, is also a signatory of Alter's letter. The Schmoke campaign has received contributions from both Adcor ($2,000) and Stavrakis ($500). Michael Angelos is the cousin of Orioles owner/superlawyer Peter Angelos, whose proposed convention-center hotel is in line for public subsidies similar to those granted Paterakis.

Richard Alter
President and CEO, Manekin Corp.
Manekin is the region's fifth-largest commercial-real-estate brokerage and 12th-largest commercial-construction firm. In 1985 the company loaned Michael Silver--then owner of Paterakis' Inner Harbor East parcels--$180,000 to help him fend off banks that had three mortgages on the properties. In return, Manekin received first dibs to buy the land if Silver defaulted or decided to sell. Alter and Manekin have given $4,700 to city pols, including $3,600 to Schmoke.

Michael J. Batza
Chairman and CEO, Heritage Properties
Heritage is the development partner with Cordish Cos. for the $20 million rehab of the vacant Hutzler's property in Towson. Heritage President David Rhodes sits on the Baltimore Development Corp. (BDC) panel that last spring gave the inexperienced team of Otis Warren and Svatos Co. a controversial contract to manage 65 city properties. (The $500,000 contract included first-year commissions of 6 percent--twice the market rate--and 4 percent commissions for four years thereafter.) Batza has given Schmoke $1,000, and Heritage colleague and BDC chairman Roger Lipitz has given the mayor $3,000.

Buzz Berg
Vice president, The Berg Group
A demolition contractor with a decades-long relationship with city government, Berg was slapped in 1977 with a three-year federal prison sentence for his involvement in a city-contract bid-rigging conspiracy. (The investigation also nabbed then-deputy Department of Public Works director Ottavio Grande and four other demolition contractors.) Berg, whose companies have given $3,000 to Schmoke's political coffers in recent years, is currently working on the Power Plant renovation.

Rick Berndt
Managing partner, Gallagher, Evelius & Jones
Attorney Berndt represented Paterakis and Gilbane Properties, Paterakis' former partner in Inner Harbor East, in negotiations with the city over development plans for the property. He is a board member of the Baltimore Development Corp. and, along with BDC chair Roger Lipitz, served as an unofficial campaign adviser to U.S. Rep. Ben Cardin when Cardin was considering a gubernatorial bid last summer. Berndt and his firm have given $1,850 to locals pols, including $500 to Schmoke.

J.P. Blase Cooke
President, Harkins Builders
The nation's 12th-largest multi-unit residential contractor, Harkins built the Housing Authority of Baltimore City's Pleasant View Gardens, the former Lafayette Courts public-housing project. The company is also general contractor on the $8.4 million restoration of the Marlborough Apartments into subsidized housing for the elderly, a project that is getting more than $1 million in city and state loans and subsidies. Cooke is an original board member of Baltimore Corporation for Housing Partnerships, the publicly funded affordable-housing vehicle founded by former Gov. William Donald Schaefer that was put on state probation last spring after losing nearly 50 properties worth $2.3 million to loan defaults and foreclosures. Harkins has given $1,600 to local politicians of late, including $1,000 to Schmoke.

J. Ronald DeJuliis
Business manager, International Union of Operational Engineers, Local 37
A mayoral appointee on the city Board of Licenses for Construction Equipment Operators, DeJuliis is also husband of former state delegate Connie DeJuliis, once the darling of Eastside Baltimore Democrats who lost a bid for Congress to Rep. Bob Ehrlich in 1996. The union local for which DeJuliis works has donated at least $4,945 to numerous city elected officials' campaigns since 1995.

Pierce J. Flanigan III
President, P. Flanigan & Sons
P. Flanigan & Sons is a longtime city contractor that, as of last October, had $17.5 million in Department of Public Works road-resurfacing jobs. In the years 1994--96, the Board of Estimates approved extra work on Flanigan's city contracts 46 times, resulting in more than $1 million in additional payments, according to city records. Flanigan and his company have donated at least $8,500 to Schmoke and at least another $2,100 to other elected city officials since 1993.

Nick Frank
President, Nick Frank Vending
Frank was convicted on gambling charges in 1986 as part of a statewide crackdown on video-poker machines. Last fall he was convicted on misdemeanor gambling charges in Baltimore County, where police seized 35 of his machines and $43,500 in cash from 12 locations; Frank says he received probation. Since 1994, Frank has helped finance the political campaigns of Schmoke ($1,000) and 1st District council members Lois Garey ($640) and Nicholas D'Adamo ($300).

Steve Geppi
President and CEO, Diamond Comic Distributors
Diamond controls most of the nation's $500 million comics-distribution industry; the industry is currently under federal antitrust investigation by the U.S. Justice Department. He is also publisher of Baltimore magazine, a tenant at the Paterakis-owned Sylvan Learning Systems building at Inner Harbor East. In its October 1997 issue B-mag ran a full-page ad, which was not identified as such, consisting of a letter from Schmoke stating support for the Wyndham. Geppi recently held a $500-a-head fund-raiser for Eileen Rehrman, Gov. Parris Glendening's chief Democratic rival. With Diamond, he has given Schmoke's campaign $4,500.

Louis Grasmick
President and CEO, Louis J. Grasmick Lumber
Grasmick is a longtime friend of former Gov. William Donald Schaefer, husband of state schools superintendent Nancy Grasmick, and a past property owner with Paterakis--in 1990 they paid the state $64,000 for the air rights for a rotting pier they owned in Canton, a one-time payment that paved the way for the development of the Anchorage, a multimillion-dollar condo complex. He introduced Paterakis to executives of Providence, R.I.--based Gilbane Properties, Paterakis' first development partner in Inner Harbor East. Grasmick co-hosts an annual Super Bowl party (with Robert Pascal, former Anne Arundel County executive and former state appointments secretary under Schaefer, who also signed the letter) at which Paterakis is a regular guest.

Sam Gupta
President, E2-CR
Gupta is a minority contractor who does engineering consulting for city contracts, among them the controversial Quarantine Road Sanitary Landfill leachate-pond repairs, which led to an ongoing FBI investigation of Department of Public Works' contracting procedures. Gupta and various companies he's affiliated with have donated $19,350 to Schmoke's campaign and $3,400 to that of 6th District council member Ed Reisinger. He is a former mayoral appointee to the city Contractors Qualification Committee and a former member of the Governor's Economic Development Commission. He filed suit against City Paper in 1996 over the paper's coverage of his involvement in the leachate-pond controversy; the case is scheduled for trial next month (see page 12).

Joseph Haskins
President, CEO, and chairman of the board, Harbor Bank of Maryland and Harbor Bankshares Corp.
Harbor Bank is a first-floor tenant at the Paterakis-owned building at Inner Harbor East. Paterakis is a member of the board of Harbor Bankshares, the bank's holding company, and chairman of the Executive Committee for the bank and the holding company. (Wyndham-letter signatories J.P. Blase Cooke, James DeGraffenreidt, Steve Geppi, Louis Grasmick, Erich March, and Ed St. John also serve as officers of the holding company.) Haskins is vice chair of the Greater Baltimore Committee; cochair (with Donald Manekin, senior vice president of Manekin Corp.) of the Governor's Economic Development Commission; and a board member of Empower Baltimore Management Corp., overseer of the distribution of federal Empowerment Zone funds. With his family he's given $1,175 to local pols, including $1,000 to Schmoke.

Charles Holub
President, Potts & Callahan
Potts & Callahan rankled environmentalists and community leaders in Southwest Baltimore when the city in January issued the company a permit to fill an abandoned quarry along the Gwynns Falls with excavation debris. Last year, the city paid the company to tear down old houses while a new city-owned crane (purchase price: $555,515) sat idle for a year because the city didn't have an operator trained to use it. Potts & Callahan and Holub together have given Schmoke $2,500 since 1993.

Tom Koch
President and owner, Curtis Engine & Equipment
Koch is a former lobbyist for Trigen Baltimore Energy Corp., the utility contractor for Inner Harbor East, and last year he was cochairman (with Schmoke campaign manager Larry Gibson) of Baltimore Bicentennial Celebration, a nonprofit charged with fund-raising and planning for the city's 200th birthday bash. Koch is a former treasurer of the state Democratic Party; he, Curtis Engine, and the real-estate company HKH Partnership (in which Koch owns a minority interest) have given a combined $6,400 to Schmoke's campaign and another $2,600 to council members' campaigns since 1993.

Henry J. Knott III and Henry J. Knott Jr.
President, Henry J. Knott Masonry, and president, Marion I. and Henry J. Knott Foundation, respectively.
The Knott family are longtime Baltimore-area developers and philanthropists (the family foundation is a $35.6 million charity dedicated to furthering Catholic and private education and culture). Henry Knott Jr., his brother Martin Knott, and Paterakis once owned the Omni Inner Harbor Hotel; they sold to Westinghouse which, in turn, sold to Patriot American in 1993. Patriot American is Paterakis' partner in the Wyndham deal. Henry Knott Jr. and Paterakis were also prospective investors with Louis Grasmick in the group headed by Tom Clancy that tried to lure an NFL franchise to Baltimore in 1993.

Ira J. Miller
Principal, Miller Corporate Real Estate Services
Miller represented Sylvan Learning Systems in the lease deal for the company's Inner Harbor East digs. Miller Corporate Real Estate Services coprincipal Mickey Miller Jr.'s father is a member of the Maryland Port Commission, and his grandfather, J. Jefferson Miller, was one of the founding fathers of the Charles Center-Inner Harbor redevelopment effort. (Mickey Miller and Ira Miller are not related). The firm has given $500 to Schmoke.

Konstantine J. Prevas
Attorney, Prevas & Prevas
The father of Baltimore City Circuit Court Judge John Prevas, Konstantine Prevas has been Paterakis' attorney for years. The elder Prevas represented Paterakis in the deal in which Paterakis loaned former Inner Harbor East property owner Michael Silver $11 million. A mere dabbler in the political fund-raising game--his only contribution is $100 to former council member Anthony Ambridge's campaign in 1995.

George L. Russell Jr.
Partner, Piper & Marbury
A partner in Baltimore's largest law firm, Russell is a former city solicitor and Baltimore City Circuit Court judge, a past Baltimore City Bar Association president, and chairman of the Governor's Salary Commission. Russell represents Willie Runyon, of American Ambulance & Oxygen, who made news in 1994 for exceeding campaign-contribution limits and is a fringe figure in the ongoing probe into the political and business dealings of former state Sen. Larry Young. (Among the matters being investigated is Runyon's purchase for Young of a Lincoln Town Car.) Russell has given $660 to local pols in recent years, including $100 to Schmoke.

Frank Serio
Frank A. Serio & Sons
Serio & Sons is a Jessup-based wholesale distributor of baking ingredients to regional retail bakeries and to distributors of baked goods. The firm was mired in litigation this past winter when Serio's son, Francis X. Serio, claimed he was fired after blowing the whistle on the company's alleged violations of federal labor regulations and the submission of false insurance claims. Francis Serio sued his parents and the company and won a $15.3 million judgment. Frank Serio has given $1,000 to local political campaigns.

Ron Shapiro
President, Shapiro, Robinson, & Associates
Shapiro is Schmoke's campaign treasurer and a longtime friend of the mayor's campaign manager, Larry Gibson. He is a counsel to the law firm of Shapiro & Olander (which employs Gibson); the firm's clients include Manekin Corp., and it drew fire in 1995 for receiving $2.4 million for four years of city legal work. As paid counsel to the Empower Baltimore Management Corp., Shapiro & Olander solicited business from companies that were seeking tax credits in the Empowerment Zone, a practice that was stopped once brought to public attention. Shapiro is also the agent for several Orioles, including Cal Ripken Jr.

Maurice Wyatt
Lobbyist, real-estate developer, and a longtime Maryland political operative, Wyatt has been a close Paterakis adviser for decades. According to former City Council President Walter Orlinsky, Wyatt advised Orlinsky, former U.S. Sen. Daniel Brewster, former Gov. Marvin Mandel, and former council member and Baltimore District Court Judge Allen Spector before each of them faced legal scandals that ended their political careers. He and Spector (the late husband of current 5th District City Council member Rochelle "Rikki" Spector) were disbarred in 1982 as a result of bribery convictions. Wyatt was pardoned by Gov. William Donald Schaefer in 1991, and his right to practice law was reinstated in 1996 with the help of Henry Knott Sr., George Russell Jr.and Paterakis, who all wrote to the Maryland Court of Appeals on his behalf.

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