State looking into Prince George's County bribery complaints, source says
American Hospitality owner, staff member to testify before grand jury on lawmakers' alleged dealings
Developer Arun Luthra and an employee for his real estate company, American Hospitality Management, have been subpoenaed by the state prosecutor's office to testify July 1 about county dealings with his property at 8500 Annapolis Road, the source said.
The state prosecutor's office would not confirm or deny last week whether an investigation is under way, citing confidentiality policies.
Reached twice last week, Deputy State Prosecutor Thomas M. McDonough, who the source said issued the subpoenas, also declined to confirm or deny whether an investigation is under way.
"This office will not breach the public trust by trying our cases or conducting investigations in the press," McDonough said.
The Office of the Maryland State Prosecutor investigates and pursues complaints of bribery, election infractions and unethical conduct by public officials.
County Attorney Stephanie Anderson, who is in charge of defending the county in all legal actions, said her office has received no contact from the state prosecutor's office on the matter.
"I am not aware of their activity at all," Anderson said. "There has been no contact made to my office."
Luthra's company filed a lawsuit Jan. 19 against the county alleging Johnson and Prince George's council members collectively pushed Luthra during a year-long period to spend more than $900,000 preparing the Four Points building so the housing department could lease space. Johnson allegedly assured Luthra the lease was "a done deal" and allegedly used his personal attorney to conduct negotiations outside of the public process, according to the lawsuit.
American Hospitality Management also alleges that council members Marilynn M. Bland (D-Dist. 9) of Clinton, Camille Exum (D-Dist. 7) of Capitol Heights, Tony Knotts (D-Dist. 8) of Temple Hills and Ingrid Turner (D-Dist. 4) of Bowie pushed the company to hire former councilman Michael Arrington as a lobbyist to handle the negotiations to move the county housing department to Four Points, a mixed-use development that includes office space, a Sheraton hotel and commercial spaces.
Sources speculated that the lawsuit, which is pending in county circuit court, is the cause of the alleged state investigation.
The lawsuit also states that several council members worked through Arrington to push Luthra and associates to buy tickets for political events in exchange for consideration of the lease. In another claim, Luthra said in court papers that the council wanted him to give commissions from the lease to their political allies, including Arrington and Charles Dukes, a real estate broker with W.F. Chesley Real Estate of Crofton.
Luthra's lawyers say the developer was caught in a "power struggle" between Johnson and the council over who gets to collect favors from business contracts in the county.
"This system of corruption and graft has, upon information and belief, been in place for many years," lawyers for the company wrote in a new complaint filed June 1.
In court papers, Luthra and his staff said the developer refused to pay Prince George's lawmakers' requests on the Four Points lease as it was pending in 2008 and 2009, and then the council declined to approve the lease twice in 2009, killing the deal. Lawyers for the company claim in court papers that Arrington and Dukes were working on behalf of council members when they solicited money to move the deal forward.
"It is clear in hindsight that defendant Dukes had some form of financial arrangement," according to the complaint. "Monies paid pursuant to spurious and bogus commission agreements' would be funneled back to council members and others, either directly or in the form of political contributions."
Dukes did not return repeated calls for comment left on his work phone. Calls to Arrington's lobbying office in Annapolis were also not returned.
Working through Arrington, Bland, Exum, Knotts and Turner each allegedly solicited donations and favors from American Hospitality Management, according to court papers. Knotts is currently running for county executive, and Bland has filed to run for Clerk of Circuit Court in the fall primary elections.
According to court papers, Knotts allegedly told an employee that Luthra's company needed to buy $40,000 worth of tickets to a fundraiser he was having in September 2009 to have the lease considered. Luthra refused the request, according to court papers.
"Talk to my lawyer," Knotts said repeatedly when asked about the allegations last week.
Calls to Bland's council office were transferred to the council's press office, which did not return a request for comment on the pending litigation. Exum and Turner have deferred requests for comment to their attorneys since the case was first filed in January.
Baltimore Attorney Daniel Karp, who is representing the county and the elected leaders named in the lawsuit, also did not return several calls for comment at his office last week. Anderson said she was speaking on his behalf.
"The defendants will vigorously defend against the plaintiff's meritless allegations," Karp wrote in a June 7 letter to The Gazette.
Karp and others accused in the case have said repeatedly that the allegations lack specifics and are "speculative."
Jonathan Shurberg, the attorney representing Luthra and American Hospitality Management, said more specific evidence will be presented as the case proceeds and lawmakers must submit to interviews. He said Luthra lost $900,000 outfitting his building for the lease and that he has been unable to rent out space.
"The bottom line is, we're just getting started," Shurberg said.
E-mail Daniel Valentine at firstname.lastname@example.org.