O'Malley's Gubernatorial Spoils...

from the Baltimore Sun

An assistant attorney general asked Friday for a state ethics commission ruling on whether former Gov. Martin O'Malley's purchase of furniture from the governor's mansion violated rules regarding state-owned property.

When O'Malley and his family moved out of the mansion in January, they left with most of its taxpayer-purchased furnishings — 54 items that he bought at steep discounts because every piece had been declared "junk" by his administration.

O'Malley and his wife, Baltimore District Judge Catherine Curran O'Malley, paid $9,638 for armoires, beds, chairs, desks, lamps, mirrors, ottomans, tables and other items that originally cost taxpayers $62,000, according to documents obtained by The Baltimore Sun.

The Department of General Services sold the furniture to the O'Malleys, who together earned $270,000 in state salaries last year, without seeking bids or notifying the public that the items were available for sale.

An agency rule prohibits preferential sales of state-owned property to government officials. On Friday, the assistant attorney general at the department asked the state ethics commission to determine whether the sale violated the prohibition.

O'Malley, who is seeking the Democratic nomination for president, declined to comment, but his representatives said that he followed proper procedures and that state officials had authorized the furniture to be thrown away.

The furniture was used in the residential sections of the mansion, not the public areas, which are dotted with antiques. When Gov. Larry Hogan moved into the mansion in January from his Anne Arundel County home, the Republican found a starkly less furnished house than the one he had toured with O'Malley two weeks earlier. He ended up moving in nearly all of his furniture from his Edgewater house.

"The governor was certainly surprised to find Government House largely unfurnished," said Hogan spokesman Douglass Mayer.

The Department of General Services' inventory control manual states that "the preferential sale or gratuitous disposition of property to a state official or employee is prohibited in accordance with Board of Public Works policy." The prohibition against preferential sales — transactions made without publicly soliciting other bids — applies to all surplus state property, even items declared junk, a department spokeswoman said.

State ethics rules and the standards of conduct for executive branch employees forbid state officials from making transactions that involve information unavailable to the public.

Therese Yewell, spokeswoman for the Department of General Services, said the agency prohibition appears to apply to the transaction because O'Malley was still governor when he bought the furniture. But she deferred to the department's counsel, Assistant Attorney General Turhan E. Robinson, for a formal answer, and Robinson then sent the request to the ethics commission.

"DGS is requesting a determination on the propriety of sales of excess/used furniture to an outgoing public elected official," Robinson wrote Friday. The request also asks for an examination of a similar, though smaller, sale to former Gov. Robert L. Ehrlich Jr. eight years ago.

Sheila C. McDonald, executive secretary for the Maryland Board of Public Works, said the prohibition on preferential sales corresponds with the procurement policies of the three-person spending board, which O'Malley chaired for eight years.

"It's just common sense," said McDonald, an attorney who has managed the board since 1999. "You have to make sure the public knows so that no state employee gets something that a member of the public doesn't get."

The policy governing the sale of excess state-owned property gives the general services department four options: transfer items to other state agencies, donate them to charities, sell them at auction or throw them out. When selling, the agency "shall seek to gain maximum value" for all property, according to state regulations.

"Excess property sales will be executed by competitive sealed bids or public auction," state regulations say.

Property can be sold or given to other government entities or charities without seeking competitive bids. Robinson asked the ethics commission whether that exemption could also apply to preferential sales to government officials.

O'Malley's former chief of staff, John Griffin, who spoke on behalf of the former governor, said he believes proper procedure was followed.

Griffin said O'Malley expressed an interest in buying the furniture only after general services officials declared the furniture to be junk.

The state's inventory standards division "found that the furniture was beyond or close to the end of its useful life and authorized it to be thrown out — junked," Griffin wrote in an email response to questions. "Enter [Martin O'Malley] who asked that the furniture not be junked but to have DGS put a value on it and the family would buy it."

But Yewell said it was O'Malley's wife who got the process moving when the first lady asked to have the furniture declared surplus, a necessary step that must come before the items are declared junk and can be sold as excess property.

Samuel L. Cook, the former director of the Annapolis Capital Complex, devised the depreciation formula that was used to determine the prices the O'Malleys paid for the furniture. Cook, who worked for state government for four decades, said the process of declaring property as excess and ordering its disposal typically takes several days or weeks.

For the O'Malleys it took one day. Records show that the process to declare the furniture as surplus, judge its condition and issue a separate disposal order took place on Jan. 15 — the day the O'Malleys moved out of the mansion.

All 54 items were formally declared "unserviceable," according to the "excess property declaration" forms filed that day by the Department of General Services. Other options included "good, fair and poor." The declaration resulted in excess-property disposal orders on the same day, stating that all the items could be disposed of "as junk."

Each item featured some defect that rendered it unserviceable, according to the state records. Five mirrors were described as having "distorted, cracked edges," four chairs had "material stained, wicker torn and frayed," and two other chairs had "material stained & worn, scratches."

Cook then put together an inventory labeled "Personal items and inventory the first family wants to purchase" that detailed the original cost of each item and the depreciated value O'Malley would pay.

The state's inventory control manual does not provide a process for valuing property declared junk. Cook said that is why he consulted furniture experts and the Internet to devise his formula.

"Sam consulted with furniture experts and determined that 10 years was the outside useful life," Griffin wrote in an email. The majority of the furniture — 65 percent — was eight years old.

According to Cook's inventory, the O'Malleys paid $449 for a leather couch that the state bought in 2007 for $2,247; $739 for a Maitland Smith armoire that the state paid $3,695 for in 2007; and $764 for a second armoire that the state paid $3,822 for in 2007.

The first lady signed the $9,638 check from the O'Malleys' joint bank account on Jan. 17, when her husband was still governor. He left office Jan. 20.

It's unlikely that every item O'Malley wanted to buy was "truly junk," said Jennifer Bevan-Dangel, executive director of Common Cause Maryland, a government watchdog group. "I find it deeply disturbing."

Cook defended the deal, saying it benefited Maryland taxpayers.

"It's not historical furniture. he said. "It's furniture used by the family over eight years. It gets pretty roughed up. ... The state was fortunate to get some money for this junk that we were able to utilize to buy new furniture. In my mind, as a taxpayer, it's a win-win for the state."

Brian R. Greenstein, an accounting professor at the University of Delaware's business school, said Maryland would have gotten the most money for the furniture if it had hired an appraiser.

"That's standard business practice," Greenstein said. "Appraisals are always the true measure."

Auctioning the property would have also revealed the fair-market value, according to Greenstein and three furniture experts.

O'Malley is not the first governor to get such treatment.

Ehrlich also purchased furniture when he left office — but much less. The Republican paid the state $992 for 21 furnishings that had cost the state $9,904. Unlike O'Malley, Ehrlich purchased mostly low-cost linens, mattresses, pillows, lamps and bunk beds used by his two sons.

Those items were also purchased at prices set by a depreciation formula.

Ehrlich and his wife, Kendel, said when they moved into the mansion after Parris N. Glendening, the residence was nearly fully furnished. The couple brought some of their own furniture and acquired other items from state inventories, Kendel Ehrlich said.

"We brought our own bed," she said. "I do remember the private residence was furnished."

When Glendening moved out in 2002 his Government House Foundation donated hundreds of furnishings to the house, according to state records obtained by The Sun.

"I know I didn't buy anything" when leaving office, Glendening said. "I didn't even know you could do that."