Baltimore State's Attorney Ivan Bates scraps plans for foundation

Baltimore State’s Attorney Ivan Bates is scrapping plans for a nonprofit foundation that was expected to accept contributions — from donors it would not have to disclose under the law — to pay for events while he served as the city’s top prosecutor.

Building Bridges for a Better Baltimore Foundation, a 501(c)(4) social welfare organization established in late October, sponsored Bates’ week of inauguration festivities and reported that its purpose included “providing financial support to organizations in Baltimore City that serve our residents in need.” Bates’ father, Henry, and the secretary of his transition team, Shonte Eldridge, were among its board of directors.

Since its formation, though, the foundation was mainly a vehicle to fund Bates’ inauguration events, which included a concert at the club level of M&T Bank Stadium.

Previous Baltimore mayors have used such groups to pay for inauguration celebrations in the past. Though state law now requires the governor to disclose donors to inaugural committees, that measure does not cover other public officials, such as state’s attorneys.

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In a previous interview, James Bentley, a spokesperson for the Baltimore State’s Attorney’s Office, said the foundation would continue to run while Bates, a Democrat, served as state’s attorney. His fundraiser, Rachael Rice, said she expected that the nonprofit organization might hold luncheons for older adults or youth job fairs in the future.

Those plans have now changed.

In an email, Rice told The Baltimore Banner that Bates recently met with counsel from the Maryland State Ethics Commission to review public ethics law as it pertains to his office, such as conflicts of interest and financial disclosures.

“Counsel advised closing the Foundation, which we will be doing, likely within the month,” Rice said.

501(c)(4) social welfare organizations are allowed to accept unlimited contributions from people and corporations. Those groups must file a form with the Internal Revenue Service reporting some financial information if they receive a certain level of donations, but are not required to disclose the names of their donors or the amount of their contributions.

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These groups do not have to pay taxes on that money but people cannot claim tax deductions for contributing to them. Notable examples of social welfare organizations include the National Rifle Association and American Civil Liberties Union.

The definition of social welfare, experts said, is broad.

For an elected official, including state’s attorneys, promoting their agenda or issues such as criminal justice reform would probably fit the definition of social welfare, said Brett Kappel, of Harmon Curran in Washington, D.C., and a national authority on campaign finance, lobbying and government ethics laws.

Kappel said 501(c)(4) social welfare organizations can engage in unlimited lobbying. But their primary purpose, he said, cannot be to engage in campaign activity.

It’s common for 501(c)(4) social welfare organizations to pay for inaugural parties and events, said Michael Beckel, research director for Issue One, a nonprofit bipartisan political reform organization in Washington, D.C.

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Beckel said long-standing concerns about these organizations include whether they disclose the names of their donors and cap contributions.

”If a donor or special interest group is able to make a large contribution to a group funding inaugural committees, that’s another way for them to show they’re a good team player and curry access and influence with that politician,” Beckel said. “It further ingratiates them with the politician.”

The reason that transparency laws exist, he said, is to guard against corruption and the appearance of corruption.

”It presents some serious democracy concerns,” said Aaron McKean, legal counsel for state and local reform at the Campaign Legal Center, a nonprofit organization in Washington, D.C., that fights for every American’s right to participate in the democratic process. “Maintaining a nonprofit after you’ve taken office presents serious conflict of interest concerns.”

”And you can imagine that situation, right?” he added. “Someone’s whose business or personal life is impacted by the official, they know they can give money to this charity that is run by that official, they might see that as an opportunity to curry favor with that official and get some benefits or preferential treatment from that official.”

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Then-Baltimore Mayor Sheila Dixon voluntarily disclosed her donors in 2007. Stephanie Rawlings-Blake, who served as the city’s mayor from 2010-2016, did not.

Catherine Pugh, the mayor from 2016-2019, disclosed hers, though years later and amid scrutiny of her financial affairs. The release showed that the committee received $474,000 in contributions — including $20,000 from the University of Maryland Medical System — which was at the center of the “Healthy Holly” children’s book scandal that ultimately sent Pugh to federal prison.

Bates previously suggested that he was not inclined to disclose his donors, saying: “I follow the law. I don’t make the law. I follow it and enforce the law.”

Campaign finance records show Bates’ campaign account transferred $12,500 to the foundation on Dec. 15, an expenditure marked as a “deposit for entertainment.”

Rice later provided The Banner with a slideshow thanking donors that was displayed at an event. The presentation listed those who gave and their sponsorship levels. LifeBridge Health was a “marquis” sponsor, a tier for those who gave $25,000.

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Brown Advisory, Garcia Law , Kelly Benefits , MCB Real Estate, RE Harrington Plumbing, Heating & Utilities, and Whiting-Turner Contracting Company each were listed in the “advocate” tier for those who gave $10,000. The law firms of Murphy, Falcon & Murphy and Alperstein & Diener were among donors in lower tiers.

In addition to the concert on the club level of M&T Bank Stadium, Bates held a Baltimore Ravens tailgate and a luncheon for seniors. A sign with the foundation name welcomed attendees at a public safety forum held at a Huber Memorial Church.

Materials said the foundation worked with the Y in Central Maryland, Meals on Wheels of Central Maryland, and a youth program called CLIA, which stands for Community Law in Action.

Rashad Staton, executive director of CLIA, could not be reached for comment. Meanwhile, Bates’ campaign website has since been scrubbed of mentions of the foundation.

Former Gov. Larry Hogan, a Republican, had multiple fundraising organizations while governor, including a 501(c)(4) called An America United set up to look at bipartisan solutions to public policy questions.

A spokesperson said Hogan used the group to cover the cost of his travel and lodging, depending on the purpose of the trip. “In most cases, the expenses are covered by An America United,” Mike Ricci told The Banner. The group spent $25,000 on digital advertising for two Republican candidates in 2022 election, according to filings with the Federal Election Commission.

Anne Arundel County Executive Steuart Pittman, a Democrat, also was involved with the creation of a 501(c)(4) called Future Matters. William Rowel, chair of the board of directors, said the organization held three issues-based town hall events in 2021 before Rowel had to focus on a medical issue.

justin.fenton@thebaltimorebanner.com

dylan.segelbaum@thebaltimorebanner.com