Bereano v. State Ethics

CourtCourt of Special Appeals of Maryland
Citation944 A.2d 538,403 Md. 716
Docket NumberNo. 32, September Term, 2007.,32, September Term, 2007.
Decision Date19 March 2008
944 A.2d 538
403 Md. 716
No. 32, September Term, 2007.
Court of Appeals of Maryland.
March 19, 2008.

[944 A.2d 541]

Timothy F. Maloney (Joseph, Greenwald & Laake, P.A. of Greenbelt), on brief, for petitioner.

Steven M. Sullivan, Solicitor General (Douglas F. Gansler, Attorney General of Maryland, of Baltimore), on brief, for respondent.

Argued before HARRELL, GREENE, LAWRENCE F. RODOWSKY (Retired, specially assigned), ROBERT L. KARWACKI (Retired, specially assigned), RAYMOND G. THIEME, JR. (Retired, specially assigned), WILLIAM W. WENNER (Retired, specially assigned), and JAMES S. GETTY (Retired, specially assigned), JJ.


With apologies to the actual dialogue snippet of the character of Captain1 in the movie COOL HAND LUKE, "What we have here is [a] failure to [agree completely as to reasoning]." This case results in three opinions with the members of the Court strewn across that landscape. Nonetheless, the views shared by myself and Judges Greene, Karwacki, and Wenner, joined in part by Judge Rodowsky (as explained in his concurrence), result in a majority opinion and judgment of the Court.

Petitioner, Bruce C. Bereano, raised two questions in his petition for writ of certiorari:

I. Whether the enforcement provisions of the Maryland state ethics laws may be applied retroactively to an agreement that was executed two months before the statute was enacted?

II. Whether the "missing witness rule" should be applicable to administrative agency proceedings in Maryland, and even if it can be, did the Commission commit reversible error by misapplying the rule by violating petitioner's due process rights to notice and an opportunity to be heard, shifting the burden of proof to petitioner, and ignoring the "peculiar control" requirement?

944 A.2d 542

The Court is unanimous in its disposition of the first issue as explicated in Part I of this opinion. We part company, however, as to the disposition of the second issue. Part II of the Court's opinion is joined in its entirety by myself and Judges Greene, Karwacki, and Wenner. In a concurrence, Judge Rodowsky explains what portion of Part II he joins, as well as why he joins the judgment. A dissent by Judge Theime, joined by Judge Getty, reveals why they are unable to subscribe to Part II of the Court's opinion or the judgment.

The result is that the judgment of the Court of Special Appeals shall be reversed and the matter remanded to that Court with directions to reverse the judgment of the Circuit Court for Howard County and further remand the case to the Circuit Court with directions that it reverse the final decision of the State Ethics Commission and remand the case to the Commission for further proceedings not in consistent with this opinion.


Petitioner Bereano failed to convince the State Ethics Commission (the "Commission"),2 the Circuit Court for Howard County, and the Court of Special Appeals that he did not knowingly and willingly violate Maryland Code (1984, 2004 Repl. Vol.), § 15-713(1) of the State Government Article. He now solicits this Court to find error in the determination that he was engaged for lobbying purposes for compensation contingent upon executive or legislative action.3


The material facts in large measure are undisputed, although their consequences are not. In September of 2001, Bereano, an experienced lobbyist of many years, entered into an agreement to provide lobbying and consulting services to Mercer Venture, Inc., d/b/a Social Work Associates (Mercer). The terms of this agreement were set forth in a letter from Bereano to Mike Traina of Mercer, dated 1 September 2001. This was signed by Traina on 13 September 2001. The letter began with a reference to "our discussions," and, in its first paragraph, stated:

I propose to represent Mercer Ventures in the State of Maryland in a lobbying, political consulting, and strategy development capacity relative to the Company's plans to develop and obtain contracts and arrangements with various county, municipal, and State government agencies and departments in order to provide and perform on a privatized basis staffing agencies and case management functions. In addition, I would be willing and able to assist your company with any business development and activities in other states and jurisdictions outside of Maryland.

Paragraph two provided:

I propose commencing the month of September 1, 2001, a monthly retainer fee of $2,000.00 plus reimbursement for any necessary and reasonable expenses such as postage, duplicating costs, long distance telephone calls, mileage, fax expense, and legislative meals and entertainment. Any significant or unusual expenses would have to be approved and authorized by you before being incurred.

944 A.2d 543

These fees and expenses would be paid and continue on a regular basis once your company attains a financial cash flow, and ability to do so.

(Emphasis supplied.)

Paragraphs three and four amplified the services to be provided:

The nature and scope of my services for the monthly retainer would include and encompass performing lobbying services, giving advice, consultation, strategy and be a resource concerning legislative and political and government matters at both the State and local levels, attending and participating in all necessary and required meetings, monitoring and watchdogging on behalf of the Company, and providing information to your companies as to matters of concern and importance with its work and relationships with the State of Maryland, as well as any political subdivision in the State and generally performing any and all other such similar and related services and activities as you may request of me. In this regard, I also would register as a lobbyist and fully comply and conform with the State's applicable law.

It is further understood and agreed that in addition to and separate and apart from payment of the aforementioned monthly fee retainer fee and any further increase thereof, Mercer Ventures will compensate and further pay me one percent (1%) of the first year receivable for continuing representation and services be performed, provided, and made available when and after each separate facility and/or site or location that is opened in which I was involved in securing and participated in obtaining, and/or any contract and performance of services which is entered into by your company with any government entity, unit or agency in the State of Maryland or any other state or jurisdiction in which I worked on the matter.

Next, Bereano addressed the subject of relationships with non-governmental entities:

As to and concerning any private contracts and business which I assist and help on obtaining for your company it is understood and agreed upon that separate from and in addition to any monthly fee arrangement as set forth herein I also will receive and be paid a monthly agreed upon bonus and reward for each such private contract or business.

As summarized by the Court of Special Appeals in its reported opinion in this case, the following resulted from the signing of this document:

On November 13, 2001, Bereano filed a lobbying registration form with the Commission, declaring, under oath, his intention to perform executive and legislative action lobbying on behalf of Social Work Associates, a subsidiary of Mercer. Bereano indicated that the effective date for lobbying on behalf of Social Work Associates for "any and all legislative and executive matters concerning staffing and case management foster care, children and social services issues" was November 1, 2001 to October 31, 2002.

Later, on December 1, 2001, Bereano sent an invoice to Mercer requesting a $2,000 retainer for the months of September, October, November, and December. He also requested payment for expenses that included long distance phone calls, mileage, duplicating, and $393.34 in "Legislative Meals [and] Expenses." Again, in an invoice dated January 16, 2002, Bereano requested payment in the amount of $24,000 for "professional [s]ervices [r]endered," and a $2,000 retainer for January. He also sought reimbursement for expenses, including

944 A.2d 544

$454.39 in "legislative meals and expenses." Bereano sent similar invoices to Mercer billing for his monthly retainer fee and seeking reimbursement of "legislative expenses," meals and entertainment, mileage, duplicating, and long distance telephone calls on February 6, 2002, March 1, 2002, April 1, 2002, May 1, 2002, and June 1, 2002.

Traina sent Bereano a letter dated May 17, 2002, detailing Mercer's recent projects. The letter was accompanied by an "Organizational Capability" statement, listing among Mercer's "major clients" the following State Agencies: the Department of Public Safety and Correctional Services; the Department of Assessments and Taxation; the Department of Health and Mental Hygiene; the Department of Business and Economic Development; and the Department of Human Resources.

Bereano v. State Ethics Commission, 174 Md.App. 146, 156, 920 A.2d 1137, 1143 (2007).4

On 12 June 2002, Traina wrote to Bereano that he had learned of an investigation by the press into whether paragraph 4 of their agreement was a prohibited contingency fee. Although Traina told Bereano he considered this a "misinterpretation," he requested that their contract be amended to delete that language. Bereano agreed.

In addition, Bereano filed with the Commission an amended report on his lobbying activities on behalf of Mercer. In his initial report, dated 31 May 2002, he listed compensation for lobbying activities during the period of 1 November 2001 through 30 April 2002 as $139,379.46. On 13 June 2002, he changed that figure to $17,579.46. In a later report, filed on 2 December 2002, Bereano stated that he had performed lobbying activities on behalf of Traina's business from 1 May 2002 through 31 October 2002, for which he had received a total...

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