February 4, 2023


Skillful Business Crafters

Dan Rodricks: Financial hardship is Marilyn Mosby’s defense? Good luck with that.

That’s it? That’s Marilyn Mosby’s defense? She tapped into her tax-deferred retirement savings in 2020 because private companies that she established just the year before faced financial hardship due to the pandemic — even though said companies had not conducted any business?

That’s all she’s got?

That’s the story her attorney went with on Monday: The Baltimore State’s attorney, indicted last week by a federal grand jury on perjury charges, did nothing wrong because her startup businesses were eligible for financial relief under an act of Congress.

Let’s go over this.

For starters, a look at chronology might be helpful in understanding why this defense is so shaky.

In 2019, Mosby, whose main job is supposed to be prosecuting crime in Baltimore, formed three companies — Mahogany Elite Consulting, offering legal and consulting services; Mahogany Elite Travel, offering travel and hospitality services; and Mahogany Elite Enterprises LLC, a holding, or umbrella, company for the other two.

We — that is, the press and public — did not know about this until a year later. The Baltimore Brew had a detailed story about it. The Baltimore Sun followed up. It was not illegal, but it seemed pretty odd for a person elected as state’s attorney of Maryland’s largest city, and one experiencing an epoch of gun violence, to be establishing private companies while in office. It raised questions, if not red flags.

But Mosby, through her official spokeswoman, explained that the businesses were not yet operational. In fact, we were told, the companies are not intended to launch until after Mosby leaves office. And didn’t we all breathe a sigh of relief at that?

Furthermore, in July 2020, Mosby asked Baltimore’s inspector general to conduct an investigation to determine if the state’s attorney had done anything wrong. The request was touted as an effort toward transparency.

Now, pay close attention to the quote I’m going to share, because when I came across it, it jumped off the page.

In her letter to Isabel Mercedes Cumming, the inspector general, Mosby asked specifically for a review of the Mahogany businesses. Here’s the key quote from that letter: “I ask that you verify that I have not taken on a single client for these companies, nor have I taken in any money. Any insinuation to the contrary is false, misleading, and unethical.”

That’s Mosby directly stating — with use of the Oxford comma — that her companies had not opened doors, had not accepted clients, had not accepted any money. Essentially, the companies existed, but they had not launched, so how could she claim hardship?

Look at the date of the letter to Cumming: July 20, 2020.

Now consider this date: May 26, 2020. According to the federal indictment, that’s the date Mosby, a city employee earning close to $250,000 a year, applied for a $40,000 withdrawal from the city’s Deferred Compensation Plans. Under provisions of the CARES Act, Americans were allowed to get up to $100,000 in their retirement funds, avoid the typical early-withdrawal penalty and pay back the withdrawn amount over three years without seeing it taxed as income. But they had to have experienced hardship.

So in May 2020, Mosby applied for financial relief for companies that, in July of that year, she reported as having conducted no business.

That’s why this line of defense looks so shaky. If her businesses were not in operation, where’s the hardship? I’m reminded of lyrics from a great Billy Preston song: “Nothin’ from nothin’ leaves nothin’.”

I know, I know: Mosby is innocent until proven guilty. But her lawyer seems determined to defend her in pretrial press appearances, so I could not resist a rebuttal just based on what’s available in the public record.

By the way, Mosby’s attorney, A. Scott Bolden, went to the national media with this explanation last week, a few hours after the indictment was handed down. In one appearance, he said this: “Remember, Marilyn Mosby had businesses, if you will, and so those businesses were in the travel space and they were affected by [the pandemic].”

I can’t help but note the words, “if you will.” Maybe that’s Bolden’s manner of speaking, but when I hear, “if you will,” I hear a hedge. In this case, I heard, “She sort of had business in the travel space.” Maybe, if you will, even her lawyer knows her claims for pandemic-related financial relief, totaling $81,000 in two withdrawals, were thin.

What did Mosby do with all that money? It went to buying houses in Florida.

And the federal indictment claims she lied on documents related to the financing of those deals.

Now, I hear and see people saying this is no big deal, that the U.S. Attorney in Baltimore is going after Mosby because some people — federal prosecutors? — dislike her progressive approach to criminal justice, or because she prosecuted the Freddie Gray cops, or because she’s Black and/or a woman. Mosby’s lawyer has called the federal investigation a “witch hunt,” echoing others who used that term when they came under scrutiny, including former Baltimore Mayor Catherine Pugh and former President Donald Trump.

But, even her supporters have to stand back and, mustering a dose of objectivity, see something wrong with the picture: At best, crime-stricken Baltimore has a top prosecutor who is distracted by financial dealings of one sort or another; at worst, she is someone accused of gaming a system designed to help people and businesses that experienced real hardship. No good either way.