- The Washington Times - Friday, July 4, 2003

During last year’s gubernatorial campaign, Republican Robert Ehrlich sharply criticized what he called a “culture of corruption” that flourished during the eight years in which Gov. Parris Glendening and Lt. Gov. Kathleen Kennedy Townsend ran the state.

Mr. Ehrlich pointed to the juvenile justice boot camp fiasco — where guards beat up juvenile delinquents, forcing taxpayers to pay $4 million as part of a legal settlement. There was the mess at the state crime-control office, where $500,000 in questionable federal grants were awarded to a series of nonprofit organizations. There was the refusal of the state last year to cooperate with the FBI in carrying out criminal background checks on gun purchasers. And that’s just part of the picture.

Now comes the latest troubling twist: the federal indictment of Nathan Chapman, an investment banker with close ties to Mr. Glendening. Mr. Chapman, who is black, managed millions of dollars in pension funds as part of an equity trust in which he supervised a group of minority investment advisers. He has been charged with fraudulently investing more than $5 million in state pension funds in his own company. In announcing the 39-count indictment of Mr. Chapman on charges including mail fraud, wire fraud and securities fraud, U.S. Attorney Thomas DiBiagio said that the defendant (who is married) also “looted” $437,000 from three companies he owned in order to buy things for women he had intimate relations with.

Mr. Chapman forged a business-political alliance with Mr. Glendening in the early 1990s, when the latter was Prince George’s County executive, handling a bond issue for the county and later hosting a Glendening gubernatorial fund-raiser at an Orioles game at Camden Yards. But early efforts by Mr. Chapman to win state business were repeatedly unsuccessful, in part because he kept running into trouble with federal securities regulators. At one point, Mr. Chapman was suspended for 10 days and fined $30,000 for failing to maintain an adequate level of capital in his company. “This guy has been operating under a cloud of suspicion for 10 years now,” former SEC regulator Edward Siedle told the Baltimore Sun. “There were plenty of reasons…for a fiduciary to question whether to do business with him.”



Unfortunately, not enough people raised questions about Mr. Chapman. Upon taking office in 1995 — due in no small part to Mr. Chapman’s work in shoring up Mr. Glendening’s base among black voters, enabling him to win the governorship by a razor-thin margin — Mr. Glendening appointed him to the University of Maryland’s governing board. At the governor’s urging, his fellow regents elected Mr. Chapman to be their chairman, a position he left last fall, although he is slated to remain a member until 2005. He handled state pension money until January 2002, when pension board trustees fired Mr. Chapman after learning that the SEC was investigating him.

Mr. Chapman’s attorney — Lanny Davis, an attorney with Patton Boggs LLP (a prominent Washington law firm with close ties to the national Democratic Party — predicts that his client will be cleared. But, if Mr. Chapman is found guilty, it will be another reminder of the culture of corruption that pervaded Maryland politics during the Glendening-Townsend years.

Sign up for Daily Newsletters

Manage Newsletters

Copyright © 2020 The Washington Times, LLC. Click here for reprint permission.

Please read our comment policy before commenting.

 

Click to Read More and View Comments

Click to Hide