Category Archives: Government

Franchot’s Bad News for Brown

By Barry Rascovar

Sept. 29, 2014– OUCH! That’s the sound coming from Anthony Brown’s campaign headquarters after hearing of a $405 million drop in expected state revenue over the next 21 months.

This is bad news for the lieutenant governor’s gubernatorial drive.

The shrinking revenue forecast not only buoys Republican Larry Hogan’s campaign, it powerfully reinforces Hogan’s central theme: Maryland’s budget is out of kilter and in need of serious overhaul.

Republican Larry Hogan Jr.

Republican Larry Hogan Jr.

Hogan received an unexpected boost last week from Democratic Comptroller Peter Franchot’s sharp critique of the state’s liberal Democratic spending policies.

At Wednesday’s Board of Revenue Estimates meeting, Franchot took to task the “What, me worry?” attitude being taken these days by Gov. Martin O’Malley and Brown when it comes to Maryland’s continuing revenue shortfalls.

Indeed, Franchot’s comments could be grist for future Hogan ads.

Ignoring Bad News

For example, the state comptroller took umbrage at the O’Malley-Brown administration’s Scarlett O’Hara approach (“tomorrow is another day”) toward bad economic news:

” . . . we need to accept that sluggish growth and challenging economic conditions have become our new normal. It feels like we sit at these meetings every quarter, hopeful and determined that ‘next year will be the year’ when the recovery takes hold and is felt broadly throughout the economy. Yet, another year has passed, and ordinary families and small businesses haven’t even recovered to where they were before the financial collapse. . . We need to recognize that hope is not an economic strategy.”

That’s a damning criticism aimed squarely at the governor and lieutenant governor.

Comptroller Peter Franchot

Comptroller Peter Franchot

Franchot laid out a few of the bleak economic numbers:

“Maryland’s 6.4 percent unemployment rate is higher than the national rate of 6.1 percent – something we’ve only experienced twice in the past three and a half decades. . . . In terms of wages – the oxygen working families need to survive – Maryland’s average wage growth was just 0.4 percent in the first quarter of 2014. . .

“Essentially, workers perceive that their take-home pay is headed in the wrong direction and the purchasing power for Maryland families is, in reality, diminishing.”

This is exactly what Hogan has been saying.

 Maryland’s economy, Franchot notes, “didn’t grow at all last year – with a 0 percent GDP growth for 2013.”

That is an ominous indicator which the O’Malley-Brown team is blissfully ignoring. Why? Because it is politically unpalatable.

Hesitating to Act

Here’s the hard truth, according to Franchot:

“We simply can’t assume that we’re around the corner from returning to the way it was, and back to the decisions we could afford to make in Maryland as a result.”

Yet no one is rushing to close this new revenue gap in the state’s budget calculations and tighten up on state spending.

Brown doesn’t want to announce unpopular cutbacks during an election campaign; O’Malley would rather delay nasty decisions until he leaves office.

Democratic Lt. Gov. Anthony Brown

Democratic Lt. Gov. Anthony Brown

Brown is ignoring the reality that Maryland could face difficult budget years ahead that won’t allow for the raft of social programs he’s promising voters.

Franchot sagely put it this way:

“As state policymakers, we need to be smart in how we spend taxpayer dollars, recognizing that to invest in the things we need, we have to forego many of the things we simply want. . . “

This is what Larry Hogan has been preaching on the campaign trail, albeit in vague, superficial terms.

It is folly to assume, as Brown does, that there will be hundreds of millions, if not billions, of dollars available for his expensive campaign proposals. That list starts with a statewide pre-kindergarten program and tax breaks for veterans.

Neither may be affordable in the current economy.

Voters and Economics

But are voters listening? Do they understand that what Brown is promising them isn’t deliverable under the present sluggish economy Maryland confronts?

Do they understand that Maryland could face difficult times unless it reins in its borrowing and its overspending?

The public’s grasp of American economics isn’t very deep. Numbers tends to make people’s eyes glaze over. That’s what Brown is counting on.

Meanwhile, the Scarlett O’Hara approach to managing Maryland’s chronic structural deficit continues. Wishing that tomorrow will bring us blue skies and strong economic growth isn’t enough.

Franchot is right. Hope is not a viable economic strategy.

# # #

Brown Goes Negative Big-Time

By Barry Rascovar

Sept.  22, 2014 — So much for a positive, uplifting campaign for Maryland governor. Both candidates already are down in the gutter hurling mud balls at each other.

Anthony Brown is by far the worse offender, which is curious.

Larry Hogan Jr. (left) and Anthony Brown

Larry Hogan Jr. (left) and Anthony Brown

The Democratic nominee and current lieutenant governor should be enjoying the view from the top of the campaign mountain.

He’s got demographics and voter registration numbers heavily in his favor. He’s got a unified Democratic Party behind him. He’s got — or soon will have — money galore to spend on a lavish media campaign.

Brown’s Curious Tactics

In heavily Democratic Maryland, why should this candidate go negative?

Is it insecurity?

Has Brown been persuaded by campaign operatives to launch “scorched earth” attacks?

Or is the race a lot closer than the general perception?

Whatever the reason, it isn’t pretty. It reflects poorly on Brown. Is this the way he intends to govern?

His opponent, Republican Larry Hogan Jr., isn’t helping matters with his ad excoriating Brown for his weak leadership and incompetence during the botched health exchange rollout.

Larry Hogan Jr.

Republican gubernatorial nominee Larry Hogan Jr.

Last Thursday, he held a press conference, refuted Brown’s bombastic charges and called the lieutenant governor “a liar.”

Brown’s napalm bombs are landing but they are way off-target. They amount to a smear campaign combining half-truths and flat-out untruths.

Brown and his cohorts at the Democratic Governors Association want voters to believe Hogan has a “dangerous Republican agenda” and a “dangerous conservative ideology” that will devastate women’s abortion rights and abolish Maryland’s gun laws.

Let’s scare ’em into voting for Brown!

Moderate Conservative

None of this is true.

Hogan isn’t a wild-eyed Tea Party radical. He stands to the left of former Gov. Bob Ehrlich on his approach toward Democratic Annapolis.

Yes, he’s conservative, but his statements on social issues have been cautious and moderate.

Abortions? Hogan, a devout Catholic, opposes them. But he stated again Thursday he will not do anything as governor to change the status quo.

Gun laws? Same thing. Hogan doesn’t like the restrictions but he’s not foolish enough to believe he could do anything to change what Democrats and voters approved to rein in illicit gun use.

Dangerous agenda? No, but it is very much a platform crafted by a businessman who believes smaller government works best, that Democrats have been too quick to raise taxes and that Maryland’s anti-business reputation has cost the state tens of thousands of jobs.

Brown repeatedly asserts Hogan wants to give $300 million in tax breaks to wealthy corporations. It’s a little more complicated than that.

Yes, Hogan eventually wants to bring down the state’s high corporate tax rate, which is one reason Virginia has an easy time gaining new businesses at Maryland’s expense.

Hogan’s Priority

But Hogan also has made it clear his top priority is ratcheting down government spending, and then see if certain taxes can be reduced.

Is Hogan against universal pre-kindergarten? Again, it’s not so simple. Hogan’s not anti-education as Brown’s ads intimate.

He just thinks Brown’s plan is unaffordable given Maryland’s continuing structural deficit and uncertain revenue outlook.

That’s not wild-eyed or radical. It even makes sense.

The last thing Maryland needs next year is a raft of new crusades and tax hikes. The state’s and the nation’s high unemployment level and high poverty rate should spur caution, not activist spending programs.

Anthony Brown

Democratic gubernatorial nominee Anthony Brown

Brown’s irresponsible ads pounding away at Hogan’s “$300 million in tax breaks” for rich corporate owners mirrors what Brown pulled on Attorney General Doug Gansler in the Democratic primary.

Brown’s opposition to any reduction in Maryland’s corporate tax rate could have long-term, negative consequences. It sends the wrong signal about the state’s business climate.

Does this mean Governor Brown will say “no” to helping corporations even if this would bring huge numbers of jobs to Maryland?

Nevada just agreed to give Tesla Motors $1.3 billion in long-term incentives to build the world’s largest and most advanced electric-auto battery plant there — a $5 billion project resulting in 6,500 full-time jobs.

Such a deal apparently won’t happen in Maryland under Governor Brown. His campaign’s rhetoric is narrowing his economic development options.

Brown’s smear tactics leave a rank odor. It will linger. It’s a self-inflicted wound that may become a huge — and unnecessary — campaign liability.

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Bob McDonnell’s History Lesson

Shades of Marvin Mandel

By Barry Rascovar

Sept. 15, 2014 — You’ve got to pity Bob McDonnnell, former Virginia governor and recently convicted felon. He never learned from the political-corruption history of Virginia’s neighbor to the north, Maryland.

Had McDonnell familiarized himself with the trials and legal tribulations of Maryland Gov. Marvin Mandel (1969-1978), he might have avoided the ethics lapses and quid pro quo exchanges of gifts and cash that did in McDonnell and his wife, Maureen.

Bob and Maureen McDonnell

Bob and Maureen McDonnell

Indeed, the similarities between the McDonnell and Mandel sagas are stunning:

  • Both men were highly popular, successful governors.
  • Both were dogged by federal prosecutors pursuing complex public corruption and bribery cases.
  • Both prosecutions stemmed in large part from marital discord and payoffs to the spouses.
  • Both cases involved governors whose bank accounts were seriously depleted even as they faced ballooning expenses
  • Both cases led to humiliating, intimate public disclosures about the two governors’ personal lives and weaknesses.
  • Both involved payments of cash, fancy clothing, trips and other luxuries in exchange for government actions that would enrich their friends.
  • Both involved incredibly weak government codes of ethical conduct.
  • Both men maintained to the end their complete innocence.
  • And both cases rested on the fuzzily defined notion that the public is entitled to “loyal and honest services” from its elected leaders.

Improper Gifts

The McDonnells were convicted Sept. 4 of receiving improper gifts and loans from a Virginia businessman peddling a miracle vitamin pill. In return, the businessman gained access to state health officials and other key individuals who could help him, thanks to the McDonnells’ direct efforts.

Mandel was found guilty in 1977 of receiving from friends cash, an expensive wardrobe, jewelry for his wife, valuable waterfront land and interest in an office building in exchange for his help in gaining lucrative thoroughbred racing days.

Mandel “loved beyond his means,” as the late Mary McGrory brilliantly put it.

Marvin Mandel with second wife, Jeanne

Marvin Mandel with second wife, Jeanne

He split from his loyal wife in a highly publicized and messy move (she refused to vacate the governor’s mansion; he lived in a hotel) so he could marry his longtime paramour.

It turned out Marvin Mandel couldn’t afford the divorce settlement or his new wife’s expensive lifestyle without help from his wealthy business friends — who even connived with a Catholic religious order that lent Mandel the divorce money.

The governor’s “thank you”: He dropped his opposition to a doubling of racing days at the Marlboro track (from 16 to 32). Marlboro had just been bought (in secret) by his friends.

Mandel followed up with strenuous arm-twisting to pass legislation giving Marlboro an additional 62 days of racing. A rinky-dink harness track would suddenly morph into a major-league thoroughbred track with 94 racing dates.

‘Serious Mistakes’

To this day, Mandel denies wrongdoing. “I said then, and I say now, that I never did anything illegal as governor of Maryland,” he wrote in a book he penned at age 90.

Mandel’s appellate lawyers cleverly defined his actions as, at worst, “a non-criminal scheme of non-disclosure.”

The trial judge, Robert Taylor, disagreed. “You made some serious mistakes,” Taylor said.

Mandel went to federal prison in Florida, was pardoned by President Ronald Reagan and had his conviction later overturned on a technicality (prosecutors had stretched the legal interpretation of federal racketeering and mail fraud laws too far).

The incriminating evidence — and there was plenty of it — was never disputed.

Cash Poor Governor

This brings us back to Bob McDonnell — politically rich, but cash poor.

He couldn’t afford his daughter’s over-the-top wedding and his wife’s outrageously expensive gowns without help from an exceedingly generous businessman who befriended them in exchange for — he hoped — state endorsement of his miracle vitamin pill.

Like the Mandel trial, which exposed backstage maneuverings by friends to extricate Maryland’s governor from a strained marriage and keep him happy, the McDonnells’ courtroom drama in Richmond revolved around their family soap opera.

Maureen McDonnell was portrayed as an out-of-control shrew, demanding more and more largesse from her financially strapped, henpecked hubby. He threw her under the bus, essentially blaming her for the whole mess.

And, of course, he denied all wrongdoing.

Ethics Loopholes

Why not? Virginia’s laughable Ethics Code makes almost any gift to a public official legal as long as you disclose it.

Maryland’s Ethics Code is even more of a Swiss cheese affair. Mandel as governor issued this code of conduct, making it applicable “to all officers and employees of the executive branch.”

It made it unethical to do exactly what Mandel later carried out.

But here’s the catch: Maryland’s Ethics Code doesn’t apply to constitutionally elected officers, i.e., the governor.

So Mandel can say with a straight face he did nothing wrong under the state’s code of conduct. Let’s call it “technical deniability.”

High Public Expectations

Still, neither he nor McDonnell could evade the long arm of federal prosecutors.

In Virginia, a jury convicted McDonnell of conspiracy, bribery and extortion. He could be sent off to prison, but if so his stay almost surely will be brief compared with Mandel’s 19 months behind bars.

Neither man understood what was expected of them as elected public officials.

They were living under an old-fashioned standard of acceptable political behavior: Take whatever you can get as long as you do it quietly and don’t directly harm the public.

That’s not how citizens view public service today, or in the 1970s. They expect their leaders will act ethically. Don’t accept valuable gifts, even from close friends. Don’t do favors for your friends. Don’t grease the wheels for your friends.

It’s not hard to understand. Politicians in high office, though, sometimes forget they’re expected to be above suspicion.

McDonnell now is paying the price for his failure to pay attention. Had he studied Mandel’s political and personal downfall, he might not have ruined his life — and his reputation.

#  #  #

Sparrows Point Gold?

By Barry Rascovar

Sept. 8, 2014 — Today, it’s a forlorn hulk, a remnant of what once was the world’s largest steel-making plant, stretching four miles end-to-end on the Sparrows Point peninsula.

Abandoned Sparrows Point steel plant

Labor Day used to be special for the 30,000 people who worked at the Bethlehem Steel complex at its peak. They churned out cables for the George Washington Bridge, girders for the Golden Gate Bridge and steel for machinery and equipment that helped win World War II.

Then after 124 years of operation, it was over. The blast furnaces closed for good in June 2012, the property sold for a pittance to a liquidator.

Now there is reason for optimism “The Point” once again might be turned into economic gold.

Baltimore County and the Port of Baltimore have come up with pragmatic plans to redevelop this vast acreage — 5.3 square miles — into a major jobs generator.

Sparrows Point plant in good times

Sparrows Point plant in good times

Even better, an investment group with deep pockets and strong local connections is negotiating to buy most of the Bethlehem Steel land in southeastern Baltimore County.

Jim Davis heads Redwood Capital Investment, which wants to become the new property owner. Davis’ name isn’t as familiar to readers as his cousin, Ravens owner Steve Bisciotti.

The two co-founded a job-staffing service in the 1980s, Aerotek, which morphed into the country’s largest privately held international staffing company — a $10 billion giant called Allegis Group with 12,000 employees and 120,000 contract workers. Its headquarters are in Hanover, not far from Arundel Mills.

Davis went on to purchase Erickson Retirement senior living communities and a host of other real estate and financial investments through Redwood. Now he is seeking most of the Sparrows Point acreage.

The Point’s Potential

If Davis follows the path laid out by a county task force and the Port of Baltimore, The Point some day will be humming with maritime crews, manufacturing and assembly workers, energy operators and distribution and freight employees.

It could be the most promising economic development story for Maryland in decades.

Nowhere in the Northeast is there such an enormous chunk of land already zoned for industrial use.

While 600 acres is heavily contaminated after a century of steel-making, some 2,400 acres won’t need much work to be placed on the market.

A good part of it overlooks the Chesapeake Bay — six linear miles of deep-water frontage perfectly suited for the port’s expansion needs.

Sparrows Point redevelopment area

Sparrows Point redevelopment area

If Baltimore is to take full advantage of a widened Panama Canal in 2016, it needs additional berths for the giant “post-Panamax” container ships (more than three football fields long) that require 50-foot channels and extra-long cranes.

Sparrows Point already has a 45-foot iron ore pier that could handle roll-on, roll-off cargo like automobiles and farm equipment; a second pier ideal for barges and smaller vessels; a short-line railroad that links to both CSX and Norfolk Southern tracks, and lots and lots of cargo storage space.

Dredge Deposit Site

There’s also Coke Point, where port officials want to deposit tons of dredged harbor muck over the next decade or two. Once filled in, this “de-watered” land can be prepared for use as a state-of-the-art, deepwater super-cargo berth similar to Seagirt Marine Terminal, built on dredged material from construction of the Fort McHenry Tunnel.

That’s just the start of the good news.

The task force, appointed by Baltimore County Executive Kevin Kamenetz, thinks some of the the peninsula is well suited for an energy park containing a natural gas plant, solar and wind farms, a biomass energy plant and a landfill gas plant.

This makes enormous sense. Central Maryland pays heavily to import electric power from out of state. It lacks sufficient transmission lines, too.

Neat Fit for Clean Energy

But The Point already has heavy-duty transmission lines that fed electricity to Beth Steel’s blast furnaces. Clean-energy production would be a nice fit, especially since the facilities wouldn’t be close to residential neighborhoods.

Other uses pinpointed by the task force include innovative manufacturing and value-added assembly for rail cars, ships, marine vehicles, specialty machinery and electric equipment; distribution and logistics parks, and “freight villages” offering warehouse space and service and equipment support.

Additionally, the task force noted a 400-acre quarry on the property soon will be ending its useful life. This opens the way for another “extraordinary vacant land-mass opportunity.”

Part of Beth Steel property

Part of Beth Steel property

It’s almost too good to be true.

And it may be. Davis has to finalize his group’s land purchase. Then he must negotiate terms with the state for the waterfront property. His company will be juggling many development balls simultaneously.

Of course, there’s the overhanging environmental concerns that first must be resolved.

Eventually, though, The Point might make a surprisingly strong comeback.

You couldn’t ask for a better located 5.3 square miles of land — much of it fronting deep water, practically on top of I-95 and the Baltimore Beltway, already connected to major railroads, a short drive from BWI Marshall Airport and at the mid-point of the East Coast’s massive megalopolis.

The State’s Role

It will take major investments from the state to give the Port of Baltimore these long-lasting advantages over other Atlantic ports of call. It’s not clear if the state’s next administration will be up to the task or if politics will intrude as the Transportation Department tries to find the money for this expensive project in its already stretched budget.

Given the recent debacle in finding a freight transfer site for CSX near the port, the MPA’s Sparrows Point expansion takes on heightened significance.

Environmental cleanups will cost someone a small fortune, though. It’s a key sticking point that must be resolved.

The county will play a role in smoothing the way for interested companies who see the vast potential of Sparrows Point. Baltimore City will have to make accommodations, too, especially in finding space to build a full interstate interchange at Broening Highway.

It’s too great an opportunity to let slip away, though.

For over 100 years, from 1889 until 2012, Sparrows Point was a beacon of jobs and success for the Greater Baltimore region. It can happen again — if there’s the will to make it happen.

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Needed in MD: Truth-in-Campaigning

By Barry Rascovar

Aug. 25, 2014–Do Maryland’s gubernatorial candidates in the November election take voters for fools?

Do they really think they can con the electorate with promises of vast spending programs (Democrat Anthony Brown) eclipsing $1 billion a year or sweeping tax cuts and givebacks (Republican Larry Hogan Jr.) also topping ten figures?

Larry Hogan Jr. (left) and Anthony Brown

Larry Hogan Jr. (left) and Anthony Brown

What’s lacking from each nominee is truth-in-campaigning.

The only thing in doubt is which nominee is being more deceptive with voters.

At the moment, Hogan has the lead, though Brown isn’t far behind.

The Republican nominee for governor pledged at an event at Charlestown Retirement Community in Catonsville to drop all state income taxes on pensions. (He already had said he’d do the same for police pensions and for veterans.)

Cheers from the seniors.

How’s he going to pay for this?

Silence.

Transportation Promises

A few days earlier, Hogan pledged to county officials meeting in Ocean City he would immediately restore $350 million in transportation funding to subdivisions once in office.

Cheers.

Which transportation programs will be stripped of $350 million to make that happen?

Silence.

Brown, of course, felt he had to match – or come close to – Hogan’s outrageousness at the Ocean City meeting. So he told county officials he’d also restore the lost Highway User Revenue – but it would occur gradually.

No Funding Plan

Does Brown have a plan for stripping state transportation programs of $350 million to pay for this fund transfer or for hiking driving fees?

Silence.

Irresponsible might be the kindest way to describe the performance of these two politicians. They keep promising the impossible, as though voters take what they say as gospel.

Any citizen who believes promises of massive tax cuts or giant new spending is living in a fool’s paradise.

Government Spending

It’s not going to happen.

Seniors already receive big tax breaks from Maryland: Their Social Security checks are free of state taxation (but not federal tax).

They also get an extra $1,000 personal exemption on their state income tax return each year.

And if their Social Security amounts to less than $27,800 a year, their other pension income is exempt up to that level.

Lots of bills have been proposed by Republicans and Democrats in recent years to expand these retirement exemptions, but none has gotten out of committee.

Why? The enormous cost involved.

Pulling It Off

With the state of Maryland facing a minimum of $400 million in revenue shortfalls, how is Hogan going to pull off this prestidigitation?

Well, he’ll cut the shreds out of state spending like any good Republican.

But wait a minute – isn’t the vast bulk of state expenses mandated by statute?

Yes, indeed.

So slashing state taxes by a billion or so isn’t realistic – certainly not for a Republican governor in a state where liberal Democrats have a stranglehold on the Maryland legislature.

Tax Cuts

Nor is Brown’s pledge of a countless new program spending any more realistic.

The lieutenant governor, for instance, claims he can pay for $108 million in affordable housing appropriations through budget cuts suggested by state employees.

Is he serious? A hundred million in savings via the suggestion box?

If he’s lucky, these ideas might lead to savings of one-one-hundredth of that amount. Or maybe an optimist might aim for one-tenth of Brown’s wild-guess of what employee-prompted savings would bring in.

Wonderland

It’s all an adventure in fantasy budgeting.

Let’s call it, “Larry and Anthony in Wonderland.”

If a conservative Republican governor like Bob Ehrlich couldn’t rein in state spending by billions of dollars, how is a more moderate Larry Hogan Jr. going to pull that off in a solidly Democratic state?

Bob Ehrlich (left) and Hogan

Bob Ehrlich (left) and Hogan

And if a liberal Democratic governor like Martin O’Malley couldn’t find the means to launch massive new spending initiatives – despite raising taxes over 40 times – how is Anthony Brown going to carry out a far more ambitious agenda?

Neither candidate is leveling with the Maryland public.

The state’s economic recovery remains uneven. State finances are falling short of projections due to federal spending hold-downs and weak job growth.

Unrealistic?

Both Hogan and Brown are setting up supporters for bitter disappointment. Neither candidate can deliver on their sweeping promises.

At best, the November winner will muddle along pretty much the way Ehrlich and O’Malley did in far more difficult economic times.

Ehrlich moderated state spending growth during his term and left a fat surplus,  but he failed to achieve permanent government downsizing.

O’Malley will leave office in January having raised lots of taxes and raided a variety of funding sources to keep social programs intact during the worst recession in 80 years. He failed, though, to dramatically expand government social services affecting working families.

Brown (left) and Martin O'Malley

Brown (left) and Martin O’Malley

Neither governor proved a miracle worker.

Brown and Hogan aren’t political magicians, either.

It’s time for them to start speaking the truth to Maryland’s electorate.

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MD GOP Nightmare

By Barry Rascovar

August 18, 2014 — Just what the Maryland Republican Party didn’t need — a theocratic, paleo-conservative candidate who has renounced the General Assembly as ungodly and is deeply involved in a group advocating a white, Christian nation of the South.

Worst of all for the Maryland GOP, this 61-year-old, Bible-spouting secessionist with a bizarre view of government is the favorite to win the November election in Anne Arundel County’s Broadneck Peninsula-Severna Park-Arnold councilmanic district.

His name is Michael Peroutka, a smooth-talking, debt-collector attorney. He ran for president of the United States in 2004 on the Constitution Party ballot line. He got 150,000 votes out of 122,000,000 cast (0.1 percent).

Constitution Party logo

Yet in June, he shocked the GOP establishment by winning Anne Arundel’s District 5 council primary by a razor-thin 38 votes.

The Republican nominee for governor, Larry Hogan Jr., disassociated himself from Peroutka. So did the GOP’s nominee for county executive, Del. Steve Schuh. Annapolis Del. Herb McMillan isn’t supporting Peroutka, either, because his views “are the exact opposite of the Republican Party.”

Like the slick lawyer he is, Peroutka is trying to sweet-talk District 5 voters into believing he’s an ordinary conservative who rails against the misnamed “rain tax,” abhors all taxes and demands drastically limited government.

It’s a con.

Peroutka didn’t even belong to the Republican Party until this year.

Peroutka button 2004

He and a Christian Reconstructionist cohort, David Whitney, tried to hijack the District 5 election by seeking to win both the Republican and Democratic primaries.

That would have guaranteed a seat on the County Council for this oddball alliance, which centers around Peroutka’s extreme Christian Institute on the Constitution, which he runs out of his law office in a strip shopping center along Ritchie Highway.

Peroutka is out to re-create the Anne Arundel Republican Party, and eventually the Maryland GOP, in his image. His pseudo-conservative rhetoric masks a deep hatred for the Republican Party of Lincoln, Ronald Reagan and George W. Bush.

Here’s what he said last October about the GOP:

“Anyone, including those who identify with the ‘Tea Party,’ who loves America and desires real reform, would do well to disengage themselves from the Republican Party and their brand of worthless, Godless, unprincipled conservatism.”

Fifth-Column Action

Peroutka isn’t even following his own advice. Instead, he’s infiltrated the “Godless, unprincipled” GOP.

This fifth-column action is part of his campaign to turn the Republican Party into a Christian party that follows Peroutka’s “biblical view of law and government.”

To him, “the function of civil government is to obey God and to enforce God’s law — PERIOD.”

Any other government actions — what he calls “pretended laws” —  are heretical and should be ignored or resisted. No wonder he spoke at a radical Second American Revolution rally last November in Washington. He’s out to dismantle the entire American system of government.

Peroutka at Second American Revolution rally

Peroutka at Second American Revolution rally

How wacky is Peroutka?

He said last year the Maryland General Assemby is “no longer a valid legislative body” and its actions should be disregarded because they violate God’s law.

Of course, Peroutka is the one who decides what’s legitimate and what is “Godless.”

According to him, “It is not the role of civil government to house, feed, clothe, educate or give health care to . . . ANYBODY.” Government, Peroutka says, has no authority to take any role in education or alleviating poverty. Government must enforce only the word of God spelled out in the Bible.

Misleading Appearance

Peroutka doesn’t come across as a madman. He’s got a distinguished mane of white hair, a grandfatherly look and a soothing voice. How could someone so sincere and seemingly erudite promote such nonsense?

Peroutka is a board member of the League of the South, an Alabama group that openly advocates Southern secession and establishment of a white, Christian Reconstructionist society.

According to its website, the League of the South is “a Southern Nationalist organization whose ultimate goal is a free and independent Southern republic.”

At this group’s meeting last fall, Peroutka called “Dixie” the country’s national anthem.

Should Michael Peroutka win in November, he’s sure to use County Council sessions as a platform for bringing his theocratic notions of government into the proceedings. It will be his launching pad for an internal Republican Party revolution.

Just what the Maryland GOP didn’t need.

It already is struggling for relevancy in the state’s largest jurisdictions. Peroutka’s ravings as an elected Republican leader could be the nail in the coffin for the Republican Party’s hopes of winning over independents and conservative-leaning Democrats.

Can He Lose?

Stopping him will be difficult, but not impossible.

District 5 hasn’t elected a Democratic councilman in 24 years. It’s a wealthy, conservative part of the county stretching from Severna Park to the Broadneck Peninsula that ends at the Chesapeake Bay Bridge.

Yet there’s hope in the voter registration numbers: 25,800 Republicans live in the district against 21,100 Democrats and 11,600 independents. Given the GOP leadership defections already announced, Peroutka’s election isn’t a sure thing.

He’s got millions of his own money he can funnel into his campaign, though.

Democratic Foe

He’s also running against a political youngster, Patrick Armstrong, a 31-year-old retail store manager who entered the Democratic primary to prevent Peroutka’s theocratic collaborator, David Whitney, from furtively gaining the nomination.

Armstrong did better than okay in the primary. He trounced Whitney, gaining nearly two-thirds of the Democratic votes in June.

He’s also not, as he put it, “a liberal boogie man. I’m a reasonable person” who grew up in District 5, graduated from Anne Arundel Community College in the district, and lives with his parents in Cape St. Claire.

He’s smart enough to run in this district with a pledge to never vote for a new tax or fee increase but instead “come up with creative ways to find solutions to our problems.”

Being Responsible

Yet he’s also wise enough to recognize that opposing the “rain tax” isn’t going to win over district voters who care deeply about the well-being of the Chesapeake Bay and its tributaries, including the Magothy and Severn rivers that define District 5’s boundaries.

He calls the stormwater-runoff fee “the responsible thing to do.”

With strong backing from state Democratic leaders, Armstrong might give Peroutka all he can handle. But he’s got to get the word out about Peroutka’s dangerous views of government and the U.S. Constitution.

After all, Peroutka is advocating the dismemberment of the United States and turning what’s left into a society ruled by Biblical law.

The problem is that even if Peroutka’s Republican charade is unmasked in time and he loses in November, he will remain the Maryland GOP’s nightmare: In June, he also won for himself a seat on the Anne Arundel Republican Central Committee.

That gives him an opportunity to use the county’s GOP Central Committee as a launching pad for converting Republican governing bodies into advocates for Christian government.

As a central committee member, Peroutka also will attend statewide GOP meetings, where he can poison the well with radical resolutions and speeches meant to Christianize the state party. He’s leading God’s crusade against the Republican infidels.

Ignoring Godless Laws

On top of that, another Peroutka theocratic soulmate, Joe Delimater, was the lone GOP candidate to file for county sheriff.

Delimater will be on the November ballot against the incumbent sheriff, Democrat Ron Bateman, hoping to win the right to wreak havoc on Anne Arundel’s court and criminal justice system by ignoring laws and government orders he believes are Godless.

What a mess for the GOP.

Peroutka & Co. pose a serious challenge to the viability and future of the Maryland Republican Party.

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Sharfstein’s Scarlet Letter

By Barry Rascovar

August 11, 2014 — For a 44-year-old, Josh Sharfstein has accomplished much: Baltimore City health commissioner, Maryland health secretary and chief deputy commissioner at the Federal Drug Administration.

Josh Sharfstein

MD Health Chief Joshua Sharfstein

Yet when Sharfstein leaves his state post at year’s end, his many achievements will be eclipsed by one giant failure: Maryland’s terribly botched health insurance exchange rollout.

This glitch-plagued rollout — the costliest debacle in Maryland state history — was a monumental disaster that should have been foreseen.

There were plenty of warning signs in the year leading up to the Oct. 1, 2013 enrollment opening. The exchange’s computer software immediately crashed — and remained dysfunctional for months.

Standing Tall

To his credit, Sharfstein shouldered the public blame for this immense fiasco. The other chief culprits, Gov. Martin O’Malley and Lt. Gov. Anthony Brown, deflected criticism to protect their political futures.

Even worse, they connived with legislative leaders to cover up the true story by avoiding an in-depth accounting of what went wrong until mid-2015. This intentional lack of transparency and accountability will remain an indelible blot on the O’Malley-Brown administration. It will haunt both of them in the years ahead.

Sharfstein took the fall at legislative hearings. He was the only one connected with this ill-fated project to apologize and take responsibility for a truly screwed-up rollout.

It is ironic this happened on Sharfstein’s watch because he’s known as a hands-on micro-manager who drives underlings crazy with his detail-oriented obsessions.

Loss of Control

This time, though, Sharfstein ran afoul of a bone-headed decision by O’Malley and Brown to set up the new Maryland health exchange as a separate, independent agency — instead of wrapping it neatly into Sharfstein’s health department.

That twist meant huge additional expenses — a separate set of backroom jobs had to be created and filled that could easily have been tacked onto existing services within the health department.

The biggest problem in giving the exchange its independence was loss of control.

MD Healthcare Connection

Sharfstein never gained direct authority over the health exchange because O’Malley set up the new agency outside the health secretary’s purview.

Yes, he co-chaired the oversight board with Brown, but that group served as a rubber-stamp for whatever Rebecca Pearce, the insurance executive hired to run the exchange, suggested. The panel didn’t challenge her assessments — a serious mistake.

Even worse, there were no traditional checks and balances to make sure the pivotal choice of technology contractors didn’t veer off-course (sadly, it did).

Nor were the health department’s seasoned computer experts in position to monitor the exchange’s faltering software development.

The department was left on the outside with no authority to intercede or blow the whistle on the prime contractor’s inept performance and failure to meet deadlines.

Righting the Ship

Sharfstein, a pediatrician whose entire career has been in government and public health, was ill-prepared to act as overseer of a highly complex information-technology project.

But as an experienced manager, and with a wealth of IT expertise available in his department, he probably could have avoided the computer crash that proved so costly.

To his credit, Sharfstein accepted responsibility for the disaster. He worked tirelessly to find a work-around and a fix (the first succeeded, the second didn’t). Now the old exchange system is being junked and a new one that is functioning well in Connecticut is being superimposed — at an enormous cost.

The health secretary will stay on to see if this latest stab at building a health insurance exchange works. He wants to walk away without leaving a health exchange headache on his successor’s desk.

That determination says a lot about Sharfstein’s commitment to righting the ship.

He can take pride in the fact that despite horrendous obstacles, over 400,000 people (mostly Medicaid recipients) signed up for health insurance through the exchange. If the Connecticut software system works in Maryland, that number should grow in Year Two.

Moving to Hopkins

We haven’t heard the last of Josh Sharfstein.

He’ll take up residency at Johns’ Hopkins’ Bloomberg School of Public Health as an associate dean with a full workload, but the urge to serve the public could lure him back, especially during a Hillary Clinton presidency.

If that’s the case, he’ll still have to explain what went wrong that led to Maryland’s costly health exchange snafu. It’s a scarlet letter he will wear, whether deserved or not.

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Uber and Out in MD

By Barry Rascovar

August 14, 2014 — Maryland’s Public Service Commission struck a blow for the rule of law this week when it declared the popular app-based, ride-sharing company Uber Technologies isn’t exempt from regulations other companies must follow if they want to transport paying customers.

It is “clear and unambiguous” that Uber is a passenger-carrying, for-profit, public transportation service, according to the PSC.

Uber logo

As such, Uber is not free to make its own rules and ignore Maryland law.

Just because Uber is using innovative Internet technologies to reinvent the taxicab industry doesn’t mean it can arrogantly write its own dictum and thumb its nose at statutes that govern the way other common carriers operate.

Companies like Uber seem to believe that because they are Internet-based, they can run their kingdoms according to their edicts and decrees.

Isn’t the Internet all about unfettered communication and freedom?

Brave, New World

Doesn’t a business based on Internet technologies have the right to do what it pleases, regardless of the consequences or existing statutes?

To follow that logic is to abandon all governance in favor of a libertarian society stripped of legal restraints.

Thankfully, the PSC wasn’t buying Uber’s scary vision of a brave, new fee-for-transport world. If we live in a country ruled by laws, then the laws must be applied across the board.

There’s no doubt Uber offers customers a good deal.

Uber smart phone app

Uber Smart Phone App

But huge dangers lurk as well.

Because Uber doesn’t want to play by the PSC’s rules, it sets its own customer charges. Unlike other cab companies, it applies higher “surge pricing” during busy times. It hasn’t bothered to apply for a common carrier license from the PSC, either.

Uber’s drivers don’t have Maryland passenger-for-hire licenses, which means its drivers haven’t undergone state criminal background checks or driver record checks.

Uber drivers don’t have passenger-for-hire vehicle insurance: If there’s an accident, the driver’s personal auto insurance won’t pay the passenger’s medical bills, or for damages.

No Safety Net?

(Uber claims on its website it has a “commercial insurance policy for rideshare drivers.” But it also claims “all UberBLACK, UberSUV, or uberTAXI rides are provided by commercially licensed and insured partners and drivers. Those transportation providers are covered by commercial insurance policies, in accordance with local and state requirements” — a statement that isn’t true in Maryland.)

Without a government-imposed safety net, passengers take their lives in their hands when they travel with Uber.

“Technology is not a substitute for regulatory oversight,” says Paula Carmody, the Maryland People’s Council, who usually is critical of PSC actions. This time, the official whose job is to look out for consumers applauded the regulatory commissioners. They “got it right.”

Paula Carmody, People's Counsel

Paula Carmody, People’s Counsel

The commissioners also recognized that the Internet riding-sharing revolution is transforming the passenger-for-hire industry. They directed their staff to come up with new regulations within 90 days reflecting evolutionary changes in transport services.

The staff will propose ways to make sure Uber-type companies and drivers have sufficient insurance; that their vehicles are safe and inspected; that drivers are qualified, and that new technologies affecting rates and pick-ups can be applied to all of the state’s taxi-style companies.

Uber, though, continues to act like a spoiled child caught trying to empty the cookie jar.

PSC logo

It railed against the “PSC’s attempt to take choice and competition away from Maryland residents.”

Uber said it will “continue to defend the rights of riders and drivers to have access to the safest, most reliable transportation alternatives on the road.”

“Safest”? Hardly.

The notion that Uber cannot compete if it plays by the state’s rules is buncombe.

What Uber really wants is a built-in advantage over traditional cab and sedan companies. That can only be accomplished by operating outside Maryland law that governs the cab industry.

Level Playing Field

Uber has opened the door for other companies to benefit from technology innovations it has brought to passenger-for-hire car service. That’s what the PSC wants to see in its new regulations.

In other states, Uber is getting its way. It can continue its outlaw-status with minimal state interference.

Not in Maryland, where Uber is being asked to recognize the importance of regulatory laws designed to ensure public safety.

That’s what government is supposed to do — even in an anarchic Internet Age.

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No MD Pension Panic This Year

By Barry Rascovar

August 4, 2014–Good news from the Maryland state retirement agency: investment earnings over the past year ending June 30 rose a strong 14.37 percent.

Maryland retirement agency logo

Don’t get too excited: The agency is still digging out of a deep financial hole caused by the Great Recession, poor decisions by former governors and legislators and poor advice from the agency’s consultant.

The retirement fund’s health, though, is showing solid improvement.

Positive Signs

Since the depths of the Great Recession, the value of its assets have risen over one-third, now topping $45.4 billion — a boost of over $5 billion in the past year alone.

Equally important, reforms to the system have kicked in: Increased employee payments, tighter eligibility rules, contributions from counties for teacher pensions and phasing out the ill-conceived Corridor Funding Methodology that let politicians reduce state payments while ignoring the retirement fund’s deterioration.

Combined, all this has kept the retirement fund on track to return to 80 percent of full funding by 2025 as planned. The corner may have been turned.

Index Fund Debate

Critics, especially conservatives and Republicans, continue to complain about fees paid to money managers — $273.8 million in fiscal year 2013 — rather than dumping all the state’s stock and bond investments into passive, low-fee index funds.

But the state agency recouped its payments to professional financial advisers many times over during the past two years with total gains of nearly 25 percent.

Moreover, fund managers already have shifted more of their assets into index funds: 63 percent of domestic equity investments are in these passive accounts; 47 percent of international equities are held in index funds, too.

Recent strong returns could well persist in upcoming annual reports as the nation’s economy finally starts to gain steam and enters a robust growth phase. It’s a good time to be a pension fund manager.

Two-Way Economic Cycle

But there will be dips and plunges along the way. There always are. Economic cycles flow in two directions — up some years, down in others.

To prepare for the down years and slower long-term growth, the state’s pension fund managers continue to re-channel investments into safer, less volatile financial instruments. The goal is long-term, stable growth, not flashy, short-term gains (or losses).

Some states get a bigger annual investment return than Maryland by placing riskier bets. But they are using retirement fund money for these gambles, which in some cases have backfired quite badly.

Long-Term Results Count

Still, we shouldn’t place too much importance in these annual profit-or-loss statements from government pension funds.

Everyone with stock portfolios knows the short-term picture can look terribly bleak (for example, last Thursday’s and Friday’s steep plunge in the Dow-Jones Average). But over the long haul — a decade or more — historic patterns are quite positive.

That’s what counts — the long-range results for pension funds. Harsh critiques of a fund’s 12-month performance can be misleading.

False Assumptions

Placing too much emphasis on the unfunded actuarial liability also can lead to false conclusions.

Yes, Maryland’s unfunded IOUs topped $19 billion as of last year. But there’s plenty of money in the retirement plan to write pension checks to 132,000 retirees and beneficiaries for years and decades to come.

Meanwhile, reforms taken over the past three years will continue narrowing the gap between what goes into the fund and what is drawn out to pay pensioners each year.

Eliminating the Deficit

The saving grace is that Maryland only pays out a fraction of the pension fund’s assets each year. Most of the 192,000 active participants in the program won’t start collecting retirement checks for another 20 or 30 years.

There’s plenty of time to gradually eliminate the unfunded liability.

That’s the stated objective of the retirement agency’s trustees.

They’ve made substantial progress in the last few years. If the nation’s economy continues on an upward trend, the agency’s financial picture could brighten faster than expected.

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Barry Rascovar’s blog is www.politcalmaryland.com. He can be reached via brascovar@hotmail.com

Child Immigration and MD — II

Sometimes an opinion article hits a nerve.

In this case, my column on Maryland Republican officials, child immigration from Central America, and what to do locally about these children, sent a number of the GOP faithful into conniptions.Contemplated immigration site in Westminster

Dan Bongino, the GOP candidate for Congress in the Montgomery County-Western Maryland district, called the column a “hate-filled, ignorant, one-sided piece. . .. so full of vitriol and emotion. . . . [it] should have never been published. There is already a movement growing, among a large group of grassroots activists, to respond.”

They did – along with many others.

Len Lazarick, who publishes MarylandReporter.com, an essential aggregator of news and commentary on Maryland politics and government, ran my column and later ran responses from Republican Congressman Andy Harris and Republican Del. Pat McDonough, among others.

MarylandReporter.com

Len also ran a lengthy defense of Republican immigration policy and a frontal attack on the Democrats’ immigration policy (and my “slanderous, outrageous” column) signed by Diana Waterman, chair of the state GOP.

Another former elected official sent me this response:

“Barry,

“This has got to be the most outrageously partisan[,] myopic, and uninformed column you have ever spewed out. I might try to respond but it would not be worth my time.

“Disgusted,

“Ellen Sauerbrey”

What follows are some of the other reactions.

From Billy Earl:

“Brilliant piece, spot on. . .”

From Jeff:

“[Y]ou were right when you said this: ‘The best way to stop this unwanted influx is to become involved in helping Honduras, El Salvador and Guatemala crack down on criminal activity, to bolster health and education opportunities and to encourage business development.’

“How could anyone disagree with this? It is shameful that Mr. Bongino called for your firing for an opinion piece. I am a life-long Republican and I have never found his presence comfortable. . . .

“I do not support the Governor’s actions or those who have spoken up on this issue because I find that both sides are just reading polls and trying to get attention. I find it classless all the way around.”

From Diane:

“Personally, I think [Rascovar is] full of s**t on this issue, but I am glad you posted it, and hope you keep it online, so people can form their own judgments on the issue and on Rascovar’s opinions. . . .”

“If the column reduces Rascovar’s readership or influence, or lowers public opinion of his value, so be it–he’s entitled to say what he thinks and we are entitled to draw whatever conclusions we wish about him. My personal opinion of him has taken a major hit.”

From Sarah:

“Yeah, I know you and Len took a lot of flak for it, and maybe you did paint with a broad brush, but I appreciated your opinion piece. . . . Someone had to say it.”

From AB:

“I’m a registered Republican and I thank you for this column.  Your courage and insight are appreciated always, at least by [my] family.”

 From Margaret:

“I’m not familiar with you or your column. . . . [P]eople want something for nothing and there are politicians in this country who are spreading the rumor in [C]entral and [S]outh American countries that they can get it here. Unfortunately WE Americans are sick to death of paying for the problems of non-residents. . .  It is not the American way.”

From Pete:

“That piece is really beneath you, filled with ad hominem vitriol. You have to ask yourself why nothing has been done on Immigration reform, and why these children are causing such a ruckus. For years, the ‘gentlemen’s agreement’ between the two sides of the aisle has been that the Democrats don’t do anything substantive about halting the flood of illegals since they generally partake of Democrat social programs, and so vote Democrat. Since they’re illegal, they get paid under the table, so Republican business interests can pay them as little as they like. So far, so good. Now, kids are coming in, whom the Democrats like, but who won’t be working for Republicans anytime soon. Oops.”

From Jack:

“I appreciate you trying to be a reporter of sorts but I would get your facts straight before posting. People will appreciate your views much better.”

“I didn’t bother reading all of your article because nothing seemed factual . . .

“Keep reporting Barry but at least research. Most of what I read isn’t true.”

From Mark:

“Usually your columns are very insightful. Not today. I suppose everyone deserves a vacation once in a while.

“First and foremost, you conflate legal and illegal immigration. . . .

“Second, since when is appropriate [to] use graffiti to characterize a political party’s position? . . .

“Third, you mischaracterize the historic position of the Republican Party on immigration. . .

“Finally, is there a more eloquent articulation of pro-immigration position than in Ronald Reagan’s Farewell Address? . . .”

 Jeff’s response:

“I suggest you pull this article immediately. It is so full of lies and misinformation and fabrications, that you better hope that you don’t get sued by the GOP.

“Pull it immediately until you have factual information.  And you know I can call you out on it being a blogger myself.  It’s horse**** ”

Finally, from Jerry:

“Wow!  What do you really think about the child immigrants? And our neo-Know Nothings in the Republican Party?  Well said!!”

*     *     *     *     *

One of the goals of column-writing is to stimulate discourse and discussion.

The column I wrote focused almost exclusively on how certain state Republican officials have reacted to the recent wave of child immigration. I avoided getting into the broader immigration issue that has tied national Republicans and Democrats in knots.

The central point of the column was this:

As Americans, we have an obligation to humanely care and shelter these children until their cases are resolved. Maryland Republican officials mentioned in the column opposed the “helping hand” approach proposed by local religious and government leaders.

I found that misguided, and that’s what it wrote.

Little, if any, of the responses from Maryland Republicans have offered sensible suggestions on how to humanely care for these children locally while they await their fate.

That’s unfortunate.

Maybe the next round of missives will return to that pivotal question and give us some thoughtful answers.

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