Change Maryland DGA Investigation Final Report

Investigation of Alleged Unethical Relationships Between O'Malley-‐Brown Administration and State

Contractors

Investigation into O’Malley – Brown Administration Relationships with DGA Donors Page | 2

Table of Contents / Summary of Contributions Investigative Overview Relationships by Sector

Healthcare • United Health Care Services ($650,000) • Medco / Express Scripts ($302,000) • Comprehensive Health Management, Inc – Wellcare ($265,000) • ValueOptions Healthcare ($154,050)

Energy • Exelon ($545,000) / Constellation ($50,350) • Covanta Energy ($450,297) • Competitive Power Ventures ($100,000) • Energy Answers ($100,000) • Chesapeake Energy ($85,000) • NRG Energy ($85,000) • Beowulf Energy & Subsidiaries($70,000) • Atlantic Grid Operations & Partners ($65,000) • Waste Management ($57,400) • Energy Plus Holdings, LLC ($50,000) • EverPower Wind Holdings ($35,000) • Foresight Energy, LLC ($25,000)

Gambling • Scientific Games Management Corporation & its holding company ($510,000) • Gtech Corporation ($315,950) • Gulfstream Park Racing Association ($200,000) • Caesars Entertainment Corporation ($150,000)

Other Industries • Motorola ($330,600) • HNTB ($300,850) • Hewlett Packard ($300,000) • Motion Picture Association of America ($235,000) • Level 3 Communications ($117,000) • ACS / Xerox ($90,000) • AECOM / AECOM PAC ($36,050)


Investigative Overview From 2011 to 2013, Maryland Governor Martin O’Malley led fundraising efforts at the Democratic Governors Association (DGA). In his role, O’Malley raised millions of dollars from contractors who do business with the state of Maryland. Already, watchdog organizations and media outlets have pointed out the obvious ethical concerns of our governor skirting state election laws by raising unlimited dollars from state contractors for the DGA. Recognizing the inappropriate and unethical nature of these relationships, Maryland law prohibits contractors from making contributions to an elected official's campaign account. The evidence in this report indicates the possibility of a deliberate, coordinated attempt by the O'Malley-‐Brown administration to circumvent the intent of the law by soliciting unlimited donations to a federal, rather than state, account from those wanting state contracts or favorable decisions. In total, companies doing business with Maryland have donated over $5.7 million to the Democratic Governors Association, and received over $4.4 billion in state contracts over the last two years. Most recently, United Healthcare Services – a top donor to the DGA – received the emergency no-‐bid contract to fix problems with Maryland’s troubled healthcare exchange, Maryland Health Connection. United Healthcare Services, a child company of United Health Group, which also owns Optum/QSSI, the company brought in to fix the health exchange, donated $650,000 to the DGA throughout O'Malley's tenure as chair. No explanation was offered as to how the decision was made to award the emergency contract to Optum/QSSI. Change Maryland’s investigation follows the transactional history of the relationship between the O'Malley administration and those who both do business with the state and contribute to the DGA. If the existence of a corrupt “pay-‐to-‐play” system is further substantiated, the O’Malley – Brown Administration will have set Maryland back decades. Job creators looking to establish their business in the mid-‐Atlantic region want a stable and predictable business climate. They want to conduct their business without the heavy hand of politicians shaking them down for hundreds of thousands in ethically questionable political donations. For the sake of transparency and good governance, we believe these allegations seriously warrant further investigation.


Healthcare United Healthcare Services: $650,000

United Healthcare Services is a large multifaceted healthcare services provider and is a major managed care organization in Maryland's Medicaid program. Since 2008, the troubled Department of Health and Mental Hygiene1 has paid the company more than $2 billion in state contracts.2

In addition, recently Optum/QSSI, a subsidiary of UnitedHealth Group which owns United Healthcare Services, was awarded an emergency contract to fix the state's troubled healthcare exchange website.3 No explanation was offered as to why the state awarded the no-‐bid contract to Optum/QSSI.

Medco/Express Scripts: $302,000

In April 2012, prescription drug plan manager Express Scripts completed a $29 billion merger with Medco.4 In February 2012, the Maryland Board of Public Works (BPW) awarded to Express Scripts a lucrative $2.3 billion contract to manage the state's employee and retiree prescription drug program.5

From 2011-‐2013, Medco and Express Scripts donated $302,000 to the O'Malley led DGA. A timeline of the Express Scripts-‐Medco merger shows that both companies were in negotiations since 2006, and that the deal picked up steam in 2011, the same time Medco made its $100,000 donation to the DGA.6

On March 9, 2011 the BPW deferred awarding the contract to Express Scripts because of concerns raised by State Treasurer Nancy Kopp and Comptroller Peter Franchot. In 2008, Express Scripts paid $9.3 billion to Maryland and 28 other states to settle complaints that it encouraged doctors to switch cholesterol drug brands for their patients.7 According to the Baltimore Sun, Express Scripts offered to handle the five-‐year contract for $50 million less than Rockville-‐based Catalyst Rx, which had the current contract. Governor O'Malley wanted the Express Scripts contract because the savings would have helped his administration, which was dealing with a $1.6 billion budget deficit.

Catalyst Rx filed a protest with the state's contract appeals board, but was ultimately denied, even though the board found several flaws in the procurement process used by O'Malley's

1 Mark Newgent, "Whistleblower at disabilities agency fired by O'Malley-Brown administration, she alleges." Maryland Reporter, October 31, 2013, Accessed December 27, 2013, http://marylandreporter.com/2013/10/31/whistle-blower-at-disabilities-agency-fired-by-omalley-brown-administration-she-alleges/. 2 Maryland Department of Budget and Management. Maryland Funding Accountability and Transparency. Available at: http://www.spending.dbm.maryland.gov/. 3 Meredith Cohn, "Company helping fix Md. health exchange linked to firm selling policies." Baltimore Sun, December 28, 2013, Accessed December 28, 2013, http://www.baltimoresun.com/news/maryland/sun-investigates/bs-md-sun-investigates-qssi-20131227,0,7266301.story. 4 Timothy W. Martin and John Kamp, "Merger to mean more Rx by mail." Wall Street Journal, April 2, 2012, Accessed December 27, 2013, http://online.wsj.com/news/articles/SB10001424052702303816504577319372702722002. 5 Michael Dresser, "State workers to get new pharmacy plan." The Baltimore Sun, February 8, 2012, Accessed December 27, 2013, http://articles.baltimoresun.com/2012-02-08/news/bs-md-pharmacy-contractor-20120208_1_express-scripts-walgreens-pharmacy. 6 "Express Scripts/Medco deal: timeline." St. Louis Post-Dispatch, April 3, 2012, Accessed December 27, 2013, http://www.stltoday.com/express-scripts-medco-deal-timeline/article_518896f0-7cda-11e1-a728-001a4bcf6878.html. 7 Annie Linskey, "Concerns delay state action on $2.3 billion drug contract." The Baltimore Sun, March 9, 2011, Accessed December 27, 2013, http://articles.baltimoresun.com/2011-03-09/news/bs-md-express-scripts-20110309_1_drug-contract-rockville-firm-maryland-contract.


budget department to award the bid to Express Scripts.8 In late January 2012, the BPW once again delayed awarding the contract to Express Scripts. According to the Baltimore Sun, O'Malley complained that the award process had become "the subject of endless delays and high powered lobbying."

On February 8, 2012, the BPW finally voted to award the contract to Express Scripts. O'Malley and Kopp voted yes, while Franchot voted against the contract.9

It is curious that Governor O'Malley ignored Express Scripts past troubles and was so eager to approve the contract given that the company's dubious past involves a case where it allegedly overbilled Baltimore City's employee prescription plan for hundreds of thousands of dollars during O'Malley's tenure as mayor.

In 2005, Baltimore City Councilman Robert Curran, O'Malley's brother-‐in-‐law, led an expansive city audit of Express Scripts' $275 million city employee prescription drug contract. The audit, expanded by Curran after an initial investigation, found that Express Scripts overbilled the city in between $300,000-‐$700,000. Express Scripts eventually repaid the city just $240,000. The Baltimore City Board of Estimates, of which O'Malley was a member at the time, voted to approve $14,000 in funding for the expanded audit.10 11

Comprehensive Health Management Inc. (Wellcare): $265,000

Comprehensive Health Management Inc., a subsidiary of Wellcare, provides managed care services through Medicaid and Medicare. After its $35,000 donation, Wellcare saw a significant jump in state spending. From 2008-‐2010 the Department of Health and Mental Hygiene paid Wellcare an average of $151,000 per year. DHMH spending on Wellcare increased to $725,000 in 2011 and to $1.5 million in 2012.12

ValueOptions Healthcare: $154,050

ValueOptions Healthcare contracts with state governments to provide mental healthcare services. After making its 2011 donation to the DGA, payments from the Department of Mental Health and Hygiene nearly doubled. In 2011 DHMH paid ValueOptions 8.3 million, up from $4.9 million in 2010. In 2012, DHMH paid the company $9.4 million.13

8 Michael Dresser, "State considers new pharmacy plan without Walgreens." The Baltimore Sun, January 25, 2012, Accessed December 27, 2013, http://articles.baltimoresun.com/2012-01-25/news/bs-md-pharaceutical-contract-20120125_1_express-scripts-walgreens-pharmacy. 9 Michael Dresser, "State workers to get new pharmacy plan." The Baltimore Sun, February 8, 2012, Accessed December 27, 2013, http://articles.baltimoresun.com/2012-02-08/news/bs-md-pharmacy-contractor-20120208_1_express-scripts-walgreens-pharmacy. 10 John Fritze, "City expands audit of company." The Baltimore Sun, December 22, 2005, Accessed December 27, 2013, http://articles.baltimoresun.com/2005-12-22/news/0512220128_1_express-scripts-drug-benefits-audit. 11 John Fritze, "City/County Digest." The Baltimore Sun, December 21, 2006, Accessed December 27, 2013, http://articles.baltimoresun.com/2006-12-21/news/0612210244_1_express-scripts-inspections-and-permits-audit. 12 Maryland Department of Budget and Management. Maryland Funding Accountability and Transparency. Available at: http://www.spending.dbm.maryland.gov/. 13 Maryland Department of Budget and Management. Maryland Funding Accountability and Transparency. Available at: http://www.spending.dbm.maryland.gov/.


Energy Exelon: $545,000/Constellation $50,350

In 2011, Chicago-‐based Exelon sought an $8 billion merger with Constellation Energy. The merger needed PSC approval, and O'Malley initially opposed the deal. However, through a political shakedown, he wrung more than $1 billion in concessions, nearly double what Exelon initially offered.14 The deal doubled the amount Exelon and Constellation would pay into O'Malley's EmPower Maryland scheme, $30 million for offshore wind development, and $2 million to state universities to fund wind energy research. The PSC approved the merger in February 2012.

Covanta Energy: $450,297

Covanta is a Montgomery County-‐based energy company that supported the 2011 waste-‐to-‐energy legislation – adding waste energy to Maryland's renewable portfolio standard – which O'Malley signed into law. Lobbyist disclosures for the 2010, 2011, and 2012 legislative sessions show that Covanta hired several lobbyists from Capitol Strategies.15 Capitol Strategies donated $26,350 to the DGA in 2011.

Competitive Power Ventures: $100,000

Competitive Power Ventures (CPV) is a Silver Spring-‐based energy company that won PSC approval to build a 661-‐megawatt gas fired electric generating plant in Waldorf, MD. The PSC decision also mandates utilities like BGE, PEPCO and Delmarva Power and Light to buy power from the CPV facility, due to a lack of private financing.16 The CPV bid was backed by the O'Malley administration.

In October 2013, a federal court ruled that the PSC plan to set the price CPV would receive for wholesale electricity over 20 years violated the U.S. Constitution by preempting federal supremacy.17

CPV's $100,000 donation was made through five separate $20,000 contributions by CPV subsidiaries.

Energy Answers: $100,000

Energy Answers is a New York-‐based energy company that built a waste-‐to-‐energy facility in Baltimore and supported the same waste-‐to-‐energy law that benefits Covanta. Governor O'Malley signed into law the legislation allowing waste energy to qualify as a renewable energy

14 "Concessions seal deal for O'Malley," Maryland Public Policy Institute, Accessed December 27, 2013, http://www.mdpolicy.org/research/detail/concessions-seal-deal-for-omalley. 15 Maryland State Ethics Commission. Listings of Registered Lobbyists; Employer List No. 6. Available at: http://ethics.gov.state.md.us/listing.htm. Accessed December 27, 2013. 16 "Md. PSC taps CPV to build 661-MW gas fired plant," SNL Financial, Accessed December 27, 2013, http://www.snl.com/Interactivex/article.aspx?CdId=A-14632199-11567. 17 Jamie Smith Hopkins, "Deal for new power plant ruled unconstitutional." The Baltimore Sun, October 1, 2013, Accessed December 27, 2013, http://articles.baltimoresun.com/2013-10-01/business/bs-bz-power-plant-contracts-unconstitutional-20131001_1_power-plant-competitive-power-the-psc.


source under Maryland's renewable portfolio standard, the same day Energy Answers cut its $100,000 check to the DGA.18

Chesapeake Energy: $85,000

Chesapeake Energy is an Oklahoma-‐based oil and gas company that operates across the country. On May 2, 2011, Attorney General Doug Gansler notified Chesapeake Energy that he intended to file suit against the company for violating the federal Resource Conservation and Recovery Act, and the Clean Water Act.19 Chesapeake operates a natural gas well in Pennsylvania that leaked fracking fluid into a creek that feeds into the Susquehanna River, which feeds into the Chesapeake Bay. On June 29, 2011, Chesapeake donated $50,000 to the DGA. A year later on June 14, 2012 Gansler announced he reached an agreement with the company to pay $500,000 to the Susquehanna River Basin Commission for water quality monitoring. Gansler's press release states, "Attorney General Gansler acted with the support of Governor Martin O'Malley and the Maryland Department of the Environment, which provided technical assistance in support of the action."20 Chesapeake Energy gave $35,000 to the DGA in 2012, though it only gave $27,750 in 2010 and did not give in 2009.

NRG Energy: $85,000

NRG Energy of Princeton, NJ is the parent company of NRG Bluewater Wind, a company seeking to build an offshore wind farm off the coast of Maryland. NRG, like Beowulf, benefits from Governor O'Malley's signature Offshore Wind Energy Act of 2013, which guarantees ratepayer subsidized financing for the company that wins the development bid. According to the Department of Legislative Services fiscal policy note, ratepayers will be responsible for subsidizing $1.7 billion.21 The Maryland Public Service Commission will give final approval to the project. Lobbying reports from the Maryland State Ethics Commission show NRG has been lobbying the legislature and executive branch on energy issues since 2010.

Beowulf Energy LLC & its Subsidiaries: $70,000

Colorado Energy LLC is a subsidiary of Beowulf Energy,22 which employs Governor O'Malley's former chief of staff, Michael Enright. Colorado Energy supports Maryland Solar LLC, another Beowulf subsidiary. On July 27, 2011 the Maryland Board of Public Works approved a lease of 250 acres of former state prison land to Maryland Solar to construct a solar farm.23 The Colorado Energy donation was made on June 14, 2011.

An August 7, 2011 article in the Easton Star Democrat noted the "cloudy" affiliations of Maryland Solar and Beowulf. The article reported that when the Associated Press contacted Maryland Solar Vice President, Jon Moore, he was "mostly vague and evasive, communicating

18 Timothy B. Wheeler, "O'Malley to sign waste-to-energy bill." The Baltimore Sun, May 17, 2011, Accessed December 27, 2013, http://articles.baltimoresun.com/2011-05-17/features/bs-gr-governor-waste-energy-20110517_1_renewable-energy-renewable-sources-offshore-wind. 19 Maryland Attorney General. Attorney General Gansler Notifies Chesapeake Energy of State's Intent to Sue for Endangering the Health of Citizens and the Environment. Available at: http://www.oag.state.md.us/Press/2011/050211.html. Accessed December 27, 2013. 20 Maryland Attorney General. AG Gansler Secures Funding to Safeguard Susquehanna Water Quality. Available at: http://www.oag.state.md.us/Press/2012/061412.html. Accessed December 27, 2013. 21 Department of Legislative Services. Fiscal and Policy Note – SB 275 – Maryland Offshore Wind Energy Act of 2013. Available at: http://mgaleg.maryland.gov/2013RS/fnotes/bil_0005/sb0275.pdf. 22 Testimony of Jonathan S. Moore, Maryland Public Service Commission, June 20, 2011 Case 9272. 23 Associated Press, "Board approves solar project on prison land in Western Md." Maryland Daily Record, July 28, 2011, Accessed December 27, 2013, http://thedailyrecord.com/2011/07/27/board-approves-solar-project-on-prison-land-in-western-md/.


only that the company is based in Annapolis with an affiliate office in Easton." Moore was also quoted as he "would rather not say" if Beowulf was the company he was referring to. The Maryland Public Service Commission also granted Maryland Solar a waiver so it could begin construction on the Hagerstown solar farm before federal subsidies expired.24

MidAtlantic Power, another subsidiary of Beowulf Energy, using the same Easton MD address as Beowulf, gave $30,000 to the DGA in 2012.

Futhermore, Beowulf is interested in building an offshore wind farm off the coast of Maryland, and according to the Washington Post Enright was a proponent of O'Malley's signature offshore wind legislation.25 Beowulf donated $10,000 to the DGA in 2011.

Atlantic Grid Operations & its Partners: $65,000

Atlantic Grid Operations is a subsidiary of the Chevy Chase-‐based Atlantic Wind Connection. Atlantic Wind Connection is an offshore undersea electric transmission line project stretching from New Jersey to Virginia, which seeks to connect offshore wind farms built off the east coast.26 Atlantic Wind Connection will benefit greatly from O'Malley's Offshore Wind Energy Act, as the company's transmission line will bring power produced by Maryland offshore wind farms onshore. In 2013, Atlantic Wind Connection hired former O'Malley communications director Rick Abbruzzese to lobby to preserve and protect Atlantic Wind Connection's interests before the executive and legislative branches with respect to energy, wind power and similar matters.27 In addition, Google is a partner in the Atlantic Wind Connection project and has a 38 percent stake in the $5 billion project.28 29 Google gave the DGA $55,000 between 2011-‐2013.

Waste Management: $57,400

Like Covanta and Energy Answers, Waste Management is in the waste-‐to-‐energy business and is reliant on allowing waste energy to qualify for the state's renewable portfolio standard. A subsidiary of Waste Management is developing the Frederick/Carroll County Renewable Waste-‐to-‐Energy Facility with the Northeast Maryland Waste Disposal Authority.30 Waste Management doubled its previous contribution in 2011 and tripled it in 2012.

Energy Plus Holdings LLC: $50,000

Energy Plus Holdings LLC filed an application to the PSC for a license to sell natural gas in Maryland on March 23, 2011. The company donated $50,000 to the DGA on May 31, 2011. The PSC approved the company's license later that year on October 26, 2011.31

24 Carolyn Swift, "Maryland Solar cloudy on affiliations; Comptroller thinks public could have better deal." Easton Star Democrat, August 7, 2011, Accessed December 27, 2013, http://www.stardem.com/business/article_0ef7ed35-0b8e-5de4-b181-f7ff3c4b8fe2.html. 25 Aaron C. Davis, "For O'Malley and friend interests align in offshore wind bill." Washington Post, March 17, 2011, Accessed December 27, 2013, http://www.washingtonpost.com/wp-dyn/content/article/2011/03/15/AR2011031502520.html. 26 "Atlantic Wind Connection," Atlantic Wind Connection, Accessed December 27, 2013, http://atlanticwindconnection.com/awc-projects/atlantic-wind-connection. 27 Rick Abbruzzese lobbying registration form, January 1, 2013. 28 "About Us," Atlantic Wind Connection, Accessed December 27, 2013, http://atlanticwindconnection.com/about-us/team. 29 Hanah Cho and Frank D. Roylance, "Md.-based company leads Google-backed wind project." The Baltimore Sun, October 12, 2010, Accessed December 27, 2013, http://articles.baltimoresun.com/2010-10-12/business/bs-bz-google-wind-farm-20101012_1_wind-farms-offshore-wind-wind-energy-industry. 30 "Frederick/Carroll County renewable waste-to-energy facility," Northeast Maryland Waste Disposal Authority, Accessed December 27, 2013, http://www.nmwda.org/projects_and_services/frederick_carroll_wte.shtml. 31 Maryland Public Service Commission. Letter order from Maryland PSC to Energy Plus, LLC, October 26, 2011. Available at: http://webapp.psc.state.md.us/Intranet/home.cfm.


EverPower Wind Holdings: $35,000

EverPower Wind Holdings is the parent company of Big Savage LLC. Big Savage sought PSC approval for the Maryland portion of a power line it wanted to construct in Allegany County for its wind farm just over the border in Pennsylvania. Big Savage filed its application on April 20, 2011 and EverPower made its donation to the DGA on May 24, 2011. Big Savage's application was approved on September 22, 2011.32

Foresight Energy LLC: $25,000

Riverstone Holdings LLC is a minority owner of Foresight LLC.33 As part of its agreement with the Maryland Public Service Commission and the Federal Energy Regulatory Commission to acquire Constellation Energy, Exelon was required to sell three coal-‐fired plants it owned in Maryland. Exelon sold the three plants to Riverstone Holdings LLC for $400 million.34 Foresight made a $25,000 donation on to the DGA on June 6, 2012. The agreement was announced in August and completed in December. The Foresight donation appears to be another unexamined part of O'Malley's shakedown of Exelon.

32 Maryland Public Service Commission. Public Utility Law Judge Order Case # 9268, Before the Maryland Public Service Commission September 22, 2011. Available at: http://webapp.psc.state.md.us/Intranet/home.cfm. 33 Matthew Hibbard, "Foresight Energy Company Completes $1.55 billion financing." St. Louis Business Journal, August 26, 2013, Accessed December 27, 2013, http://www.bizjournals.com/stlouis/blog/2013/08/foresight-energy-completes-155.html. 34 Lorraine Mirabella, "Exelon agress to sell 3 Md. Coal plants for $400 million." The Baltimore Sun, August 9, 2012, Accessed December 27, 2013, http://articles.baltimoresun.com/2012-08-09/news/bs-bz-exelon-sells-coal-plants-20120809_1_exelon-spokesman-coal-plants-brandon-shores/.


Gambling Scientific Games Management Corp & its Holding Company: $510,000

Scientific Games is a gaming company that provides services to state lotteries. In 2006, Maryland approved a five-‐year $81 million contract with Scientific Games that contained a single five-‐year renewal clause.35 On May 21, 2011 Governor O'Malley and the Board of Public Works approved the contract extension with Scientific Games.36 Three months later, Scientific Games made their $50,000 contribution to the DGA. As the contract's renewal approached Scientific Games doubled their previous contributions to the DGA: in 2009, they donated just $25,000 but doubled that to $50,370 in 2010, and $50,000 in 2011. The company doubled their donation again in 2012, giving $110,000 to the DGA.

In addition, MacAndrews Forbes, the holding company for Scientific Games, donated $150,000 in 2011, and $200,000 in 2012.

Gtech Corporation: $315,950

In January 2010, the Maryland Board of Public Works voted to award the state's $21.5 million slots monitoring contract to international gaming firm Gtech.37 The contract contains a five-‐year renewal option worth $17.5 million. Martin O'Malley and Treasurer Nancy Kopp voted yes, with Comptroller Peter Franchot casting a dissenting vote. Gtech repaid O'Malley's largesse with a $105,000 donation to the DGA the next year.

The Baltimore Sun noted that despite several allegations of bribery and kickbacks dating back to the 1990s, the Board of Public Works did not disqualify Gtech from consideration.38

In August 2013, the Maryland Lottery awarded Gtech a four-‐year instant ticketing contract,39 and in 2008 the lottery awarded Gtech a $12 million contract to provide and service lottery printing machines.40 Since 2008, Maryland has paid Gtech $9.3 million.

Gulfstream Park Racing Association: $200,000

In 2011 MI Developments, the majority owner of the Maryland Jockey Club, transferred racing assets including Laurel Park, Pimlico and Gulfstream Park in Florida to its chairman and CEO, Canadian businessman Frank Stronach.41 In 2010, O'Malley brokered a deal that guaranteed live racing to Laurel Park and Pimlico. During the 2011 legislative session, the General Assembly passed and O'Malley signed into law HB 1039, which extended the deal O'Malley brokered and

35 "Scientific Games awarded new Maryland Lottery contract," Scientific Games Corporation, Accessed December 27, 2013, http://phx.corporate-ir.net/phoenix.zhtml?c=64574&p=irol-newsArticle&ID=777196&highlight=. 36 "Scientific Games announces Norsk Tipping Lottery systems contract, and additional contract extensions," Bloomberg, Accessed December 27, 2013, http://www.bloomberg.com/apps/news?pid=conewsstory&tkr=SGMS:US&sid=aFJxlg_wfZcw. 37 Associated Press, "State Oks slots monitoring contract." LA Times, January 7, 2010, Accessed December 27, 2013, http://www.latimes.com/news/opinion/commentary/bal-md.slots07jan07,0,3026542.story. 38 Laura Smitherman, "Slots Firm's Md. Past." The Baltimore Sun, December 16, 2009, Accessed December 27, 2013, http://articles.baltimoresun.com/2009-12-16/news/0912150064_1_contract-with-gtech-corp-lottery-staff-slots-program. 39 "Gtech is awarded a secondary contract for instant ticketing printing services with the Maryland Lottery," Gtech Lottery, Accessed December 27, 2013, http://gtechlottery.com/gtech-is-awarded-a-secondary-contract-for-instant-ticket-printing-services-with-the-maryland-lottery/. 40 "Gtech to provide Maryland Lottery with 1,000 new instant ticket vending machines," Gtech Lottery, Accessed December 27, 2013, http://www.gtech.com/eng/investor/documents/cs/8589_awLottomatica.html. 41 Hanah Cho, "MID shareholders approve race track transfer." The Baltimore Sun, March 29, 2011, Accessed December 27, 2013, http://www.gtech.com/eng/investor/documents/cs/8589_awLottomatica.html.


allowed the Maryland Jockey Club to use slots revenue to pay for operational expenses instead of track upgrades.42 Caesars Entertainment Corporation: $150,000 Caesars Entertainment Corporation donated $50,000 to the DGA in 2011 and doubled their donation to $100,000 in March 2012. In July of 2012, Caesars was awarded a state contract to build a $310 million casino in Baltimore near M&T Bank Stadium.43

42 HB1039, Session of 2011 (Md. 2011), http://mgaleg.maryland.gov/webmga/frmMain.aspx?ys=2011rs/billfile/hb1039.htm. 43 James Bach, "Caesars group awarded Baltimore casino license." Baltimore Business Journal, July 31, 2013, Accessed December 27, 2013, http://www.bizjournals.com/baltimore/blog/real-estate/2012/07/caesars-led-bid-baltimore.html?page=all.


Other Industries Motorola: $330,600

Motorola, a communications company, donated $100,250 to the DGA in 2011, $220,350 in 2012, and $10,000 in 2013. Between 2008-‐2010 Motorola averaged $1.7 million in state contracts according the Maryland Funding Accountability and Transparency website. After 2011, the amount of money Maryland paid Motorola increased exponentially. In 2011 various Maryland agencies paid Motorola $7.8 million, and in 2012 the amount more than doubled to $18 million.44

HNTB: $300,850

HNTB is an engineering and architectural firm that has received millions of dollars from the Maryland State Highway Administration and Maryland Aviation Administration since 2008. However, the amount the company received between 2008-‐2011 decreased significantly from $2.2 million. After the company's $100,500 donation in June of 2011, the amount of money the state paid to HNTB jumped to $3.3 million.

Hewlett Packard: $300,000

Hewlett Packard donated to the DGA $100,000 in 2011 and $200,000 in 2012. According to the Maryland Funding Accountability and Transparency website, Hewlett Packard averaged $201,000 in state contracts between 2008-‐2010. In 2011 and 2012, state payments to Hewlett Packard increased substantially – averaging $1.4 million.45

Motion Picture Association of America: $235,000

On May 19, 2011, Governor O'Malley signed SB672 – the Maryland Film Employment Act of 2011 – into law.46 The act created a $7.5 million subsidy for television and film productions in Maryland. In 2013, O'Malley championed and the legislature approved an expansion of the subsidy, which tripled it to $25 million.47 O'Malley is using the film tax credit to burnish his presidential credentials with Hollywood. O'Malley recently visited the set of the Netflix series House of Cards to tout the credit48 as well as the set of the HBO series VEEP, both of which are filmed in Maryland.49 Level 3 Communications: $117,000

Level 3 Communications is a firm that offers information technology and communications services to state governments. Level 3 donated $25,000 to the DGA in 2010 and 2011. In 2012, 44 Maryland Department of Budget and Management. Maryland Funding Accountability and Transparency. Available at: http://www.spending.dbm.maryland.gov/. 45 Maryland Department of Budget and Management. Maryland Funding Accountability and Transparency. Available at: http://www.spending.dbm.maryland.gov/. 46 SB672, Session of 2011 (Md. 2011), http://mgaleg.maryland.gov/webmga/frmMain.aspx?ys=2011rs/billfile/sb0672.htm. 47 Gina Hall, "Maryland triples film tax incentive to woo Hollywood production." LA Business Journal, April 8, 2013, Accessed December 27, 2013, http://www.bizjournals.com/losangeles/news/2013/04/08/maryland-triples-film-tax-incentive-to.html. 48 David Zurawik, "Martin O'Malley makes it to the Oval Office, but it's not the one in Washington." The Baltimore Sun, May 14, 2013, Accessed December 27, 2013, http://articles.baltimoresun.com/2013-05-14/entertainment/bal-martin-omalley-house-of-cards-kevin-spacey-incentives-20130514_1_martin-o-malley-willimon-francis-underwood. 49 "Governor O'Malley, local officials to visit set of Veep and highlight Md. film tax credit." Baltimore News Journal, November 15, 2013, Accessed December 27, 2013, http://www.baltimorenewsjournal.com/2013/11/15/governor-omalley-local-officials-to-visit-set-of-veep-and-highlight-success-of-md-film-tax-credit/.


the company more than doubled its DGA donations to $67,000. Also in 2012, Level 3 Communications received contract payments from the Maryland Department of Information Technology, Maryland Public Television, and the Comptroller's office totaling $192,000.50

ACS/Xerox: $90,000

Xerox acquired Affiliated Computer Services (ACS) in February 2010 for $6.4 billion. ACS/Xerox is a major recipient of state funding under the O'Malley administration. Since 2008, Maryland has paid the two companies $355 million combined.

In 2009, Maryland adopted the use of speed cameras and ACS was selected as the vendor for the state program. Lobbying disclosure reports show that in 2008 and 2009, ACS employed high-‐priced and politically connected lobbyists to push for adoption of speed cameras and spent $240,000 on lobbying over those two years.51 52 Those lobbyists included former Speaker of the Maryland House of Delegates Casper Taylor, and Sean Malone, a former top aide to O'Malley as both Mayor of Baltimore and governor.

Since the adoption, Maryland's speed camera program, as well as programs implemented by many municipalities, has come under increased scrutiny for issuing tickets in error and other failings.

A November 2012 legislative audit found a serious lack of accountability for ACS/Xerox in the Maryland Safe Zone pilot program.53

The audit found:

• ACS was the sole bidder for the contract, and ACS' proposal did not meet Request for Proposal requirements. The speed detection equipment used by ACS did not conform to the International Association of Chiefs of Police guidelines as required by the RFP.

• No benchmarks set for reliability and readability of photographed violations; • Only 44 percent of violations were issued citations because SHA deemed them

unreadable; • The program did not undergo a calibration test – as required by law – until nine months

after speed cameras were operational.

In November 2012, Baltimore City dumped ACS/Xerox and awarded its speed camera contract to another vendor. Over the previous two legislative sessions, Xerox spent at least $182,000 lobbying the legislature and administration regarding speed cameras.54 Xerox, like ACS in 2008-‐2009, also hired many of the same lobbyists, including Taylor, on behalf of its speed camera interests.

50 Maryland Department of Budget and Management. Maryland Funding Accountability and Transparency. Available at: http://www.spending.dbm.maryland.gov/. 51 Maryland State Ethics Commission. Lobbying Employer Report 11/1/07-10/31/08. Available at: http://ethics.gov.state.md.us/Nov-Emp08.pdf, Maryland State Ethics Commission, Lobbying Employer Report 11/1/08-10/31/09. Available at: http://ethics.gov.state.md.us/Nov-Emp10.pdf. 52 Maryland State Ethics Commission. 30th Annual Report. Available at: http://ethics.gov.state.md.us/Annual%20Reports/2008%20Annual%20Report.pdf, Maryland State Ethics Commission, 31st Annual Report. Available at: http://ethics.gov.state.md.us/Annual%20Reports/2009%20Annual%20Report.pdf. 53 Department of Legislative Services. Audit Report – Department of Transportation, State Highway Administration. Available at: http://www.ola.state.md.us/Reports/Fiscal%20Compliance/SHA12.pdf. 54 Maryland State Ethics Commission. 34th Annual Report. Available at: http://ethics.gov.state.md.us/2012%20Annual%20Report.pdf.


More than 14 bills were filed during the 2012 and 2013 sessions to either repeal or reform Maryland's speed camera program. None of them passed.55

AECOM/AECOM PAC: $36,050

AECOM is an international engineering, architectural, and consulting firm. AECOM has made more than $36 million in state contract spending from Maryland, mostly from the State Highway Administration and Maryland Transportation Administration. Between 2008-‐2009, AECOM averaged less than $1 million in state spending. Since 2010, state contracts with AECOM have averaged over $11.5 million. AECOM contributed $11,050 and its PAC donated $25,000.

55 Maryland General Assembly. Vehicle Laws – Rules of the Road – 2012. Available at: http://mgaleg.maryland.gov/webmga/frmMain.aspx?tab=subject3&ys=2012rs%2ffilecode%2fR5.htm, Maryland General Assembly, Vehicle Laws – Rules of the Road – 2013. Available at: http://mgaleg.maryland.gov/webmga/frmMain.aspx?id=R5&stab=01&pid=broadsubjpage&tab=subject3&ys=2013RS.

Change Maryland DGA Investigation Final Report

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