The executive director of the Maryland Democratic Party asked the state Board of Elections on Monday to investigate possible campaign finance violations by Gov. Larry Hogan’s 2018 campaign, alleging that nearly 100 individuals and businesses exceeded the $6,000 legal limit for an election cycle.
State Sen. Clarence Lam (D-Howard County) noticed the apparent violations by the board members in late May, after Hogan (R) vetoed a bill Lam sponsored that Lam said would have strengthened transparency in the governor’s office of appointments. Lam alerted the Democratic Party, which said it then found the other possible violations.
“If I caught this, why didn’t the appointments office? It calls into question what vetting they are doing,” Lam said.
Former UMMS board member Francis X. Kelly Jr., whom Hogan reappointed in 2016 ; current board members Leonard Stoler and Louis Pope; and Bonnie Phipps, one of Hogan’s new appointees, donated more than $6,000 — either as individuals or through their businesses, according to campaign finance records. Kelly, Stoler, Pope and Phipps did not respond to requests for comment.
Hogan spokesman Mike Ricci said all of Hogan’s appointees are “highly-qualified leaders who are devoted to public service and will bring much-needed accountability to the UMMS board.”
“There’s no need to play politics with this,” Ricci said in a statement.
In a letter submitted Monday to the Maryland Board of Elections, Ben Smith, executive director of the state Democratic Party, said the value of donations in excess of the legal limit appears to be $210,749.
“I am formally requesting that you please open an investigation into these possible campaign finance violations,” Smith wrote to Jared DeMarinis, the state board’s director of candidacy and campaign finance.
Chris Ashby, Hogan’s attorney, described the complaint as a “shoddy political hit job,” pointing out that in at least five of the cases the Democratic Party cited, the campaign refunded donations that exceeded the limit.
“Our campaign always has been and will remain committed to operating within the limits established by Maryland law, to making full and timely campaign finance disclosures as the law requires, and to correcting any bookkeeping errors promptly as we have done in the past,” Ashby said.
During the most recent reporting period — which ran from Jan. 1, 2015, to Dec. 31, 2018 — a company owned by Kelly, called Kelly Integral Solutions, donated $11,000 to Hogan’s reelection campaign, according to campaign finance records. Kelly, who helped privatize the medical system when he was a state senator in the 1980s, was the only board member who held a contract with the system and donated in excess of $6,000 to Hogan.
He was also a strong supporter of former governor Martin O’Malley (D) and has given to both Republicans and Democrats over the years. Kelly announced this month that he would resign, ending his more than 30-year tenure on the board.
Hogan has decried the business deals made by board members, promising to clean house with new nominees — including 11 recent appointments. But he and his predecessors allowed members to stay well past the 10-year term limit specified in state law — which Lam said points to a need to improve the appointment process.
Other recent board members who held contracts with the system and donated to Hogan but did not exceed the legal limit were Robert Pevenstein and Walter Tilley Jr.
Pevenstein, who chaired both the financial and audit committees, reported making more than $100,000 annually from a software company that did business with the hospital system. Tilley’s pest control company had a contract with the system worth $160,00 last year.
Lam said it is unsurprising that Hogan and his predecessors have appointed top donors to serve on boards, bringing with them fundraising capital and experience as leaders in a variety of industries.
“But there is a lot of gray area,” he said. “That’s why it’s important that we have strong oversight.”
Lam’s legislation would have required the Governor’s Appointments Office to submit an annual report to the legislature about how it vets appointees. In his veto letter, Hogan called it the latest example of “legislative overreach and blatant usurpations of executive privilege.” Lam said he hopes the legislature will override Hogan’s veto.
