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Md. senator Oaks faces federal fraud, bribery charges

Sen. Nathaniel D. Oaks, D-Baltimore City (Bryan P. Sears/The Daily Record)

Sen. Nathaniel D. Oaks, D-Baltimore City (Bryan P. Sears/The Daily Record)

ANNAPOLIS — Sen. Nathaniel Oaks pleaded not guilty Friday afternoon to charges that he accepted more than $15,000 in a phony development scheme.

Oaks, D-Baltimore City, was brought into the federal courtroom in Baltimore in handcuffs and charged with wire fraud and accepting illegal cash payments from an FBI informant who posed as a developer. The senator, who was a delegate during the nearly one-year investigation, is accused of taking cash in exchange for using his legislative position to help the “businessman.”

Oaks, 70, faces up to 20 years in prison if convicted.

Judge J. Mark Coulson released Oaks on his own recognizance. Oaks had court-appointed counsel, represented by Stuart O. Simms and Kobie Flowers, at the pretrial hearing. Oaks submitted a financial affidavit and Coulson appointed counsel with a caveat that Oaks may be asked to pay if the court finds that he has the ability to do so at some point during the case.

Neither Oaks nor his lawyers commented after the brief hearing.

A 21-page criminal complaint filed in U.S. District Court on Friday court lays out the investigation which dates back to September 2015, when Oaks was introduced to an FBI confidential informant already assisting in an unrelated investigation.

Oaks was in Annapolis on Friday morning for a voting session in the Senate Finance Committee. He later met with Senate President Thomas V. Mike Miller Jr. to inform him that he was about to be charged. Miller, in an interview Friday afternoon, said Oaks asked what he should do and Senate leader told him to turn himself in.

Miller, earlier in the morning, offered an amendment to a public ethics law that stiffens the penalties for ethics violations.

“People who hold public office have to be held up to a higher standard than everybody else,” Miller told reporters. “They’re the ones that are making the laws and they can’t be the law breakers. And if they are charged and are convicted they should pay the highest penalty possible.”

It is not clear if Oaks will return to the Senate before the 90-day session ends Monday. He has not resigned, and Miller has made no immediate decisions on whether to strip Oaks of his committee assignment.

“I think it’s more important that he not be here, quite frankly, with these charges hanging over his head,” Miller said. “It’s more about integrity than anything else, than any vote.”

Miller declined to comment when asked if Oaks should resign, saying it was a decision left for the senator and his lawyer.

“This is not a finding of guilt,” Miller said. “It’s a charge and we have to let the judicial process play out.”

A spokesman Gov. Larry Hogan declined to comment on the pending charges against Oaks. Hogan made ethics reform a key component of his legislative agenda after another federal investigation resulted in the indictment of a number of Prince George’s County liquor board officials and two state delegates. Hogan also said he was troubled by a candidate proposed for a House of Delegates vacancy in Baltimore city who was charged with violating state campaign law just as he was about to be sworn in this year.

Hogan also noted the ethics charges against Del. Dan Morhaim, D-Baltimore County, that resulted in the delegate being stripped of his leadership positions and a public reprimand on the House floor.

The ongoing ethics and legal issues this session have all involved Democrats just as the campaign for the 2018 election is about to begin.

Sen. Steven Hershey, R-Upper Shore and minority whip, said the charges against Oaks are “nothing to get happy about” but said the year has been a rough one for Democrats.

“We started the year this way and it looks like we’re going to end the year this way,” Hershey said.

Past conviction

Oaks served in the House of Delegates from 1983-1989 and again from 1994 until this year when he was appointed to fill the Senate seat Sen. Lisa Gladden vacated due to declining health.

In 1988, Oaks was convicted of theft and misconduct in office charges in Baltimore City Circuit Court related to stealing thousands of dollars from his campaign finance account.

He received a five-year suspended sentence and was ordered to perform 500 hours of community service. He was also fined $1,000 and placed on three years of probation.

As a result, he lost his seat in 1989 but was re-elected in the same district in 1994.

‘Lollipop’

The charges revealed Friday are related to a series of cash payments made in 2016 to the senator. Oaks and the informant established the code word “lollipop,” referring to the Tootsie Roll candy he would eat, to mean $1,000, according to the federal affidavit.

The informant portrayed himself as an out-of-town businessman interested in minority business contracts with Baltimore city, including a project that would involve the U.S. Department of Housing and Urban Development.

“I might need to be the one in the background to help… with my foot… not necessarily on their neck, but around their head in some kind of way,” Oaks allegedly told the informant in one phone discussion about getting financial support for the project, including tax credits from the city.

Ultimately, Oaks sent the informant in November the draft of legislation entitled “Creation of State Debt — Baltimore City — Multifamily Housing Development at Druid Lake Park,” according to the complaint. The bill “authorized the creation of a State Debt not to exceed $250,000 with the proceeds to be used for the Project.”

The bond bill was meant to help finance the phony development project of a vacant lot on Druid Lake Park Drive, outside Oaks’ district.

The legislation does not appear to have been introduced in the current General Assembly session, according to the legislature’s online records.

‘I ain’t got no money’ 

By December 2015, Oaks was recorded in phone calls discussing his personal finances, and when the informant joked that he must have pots of money for retirement Oaks responded, “I can always use some improvement,” according to the complaint.

The informant responded Oaks should see some of the legislator’s friends who could make him rich, according to the affidavit.

“You gotta have money to get money and I ain’t got no money,” Oaks replied.

The informant then joked that he should never tell a developer that he needs money.

“I ain’t got no money, man,” Oaks replied in that recorded call, according to the complaint.

The informant told Oaks in February he had pre-approval from HUD under the Choice Neighborhood program to do housing development in the greater Baltimore area. A month later, the informant told Oaks he was making regular $5,000 payments to a third party. Two fake payments in large white envelopes made to appear as if they were stuffed with cash were given to the third-party cooperator in the presence of Oaks, the complaint states.

During a March 16 conversation, the informant asked Oaks how much he would want, but each time Oaks was evasive or non-responsive. Oaks did express concerns about being recorded and not wanting to discuss financial arrangements over the phone, according to the complaint.

“Can’t nobody say I got you on tape,” Oaks tells the informant, according to the affidavit. “You ain’t got me on tape saying a mother f—— thing but mother f—.”

The informant then told Oaks he would need the lawmaker to write a letter to a HUD on behalf of the project. Oaks agreed and asked the informant for the language, which he would then put on his House of Delegates letterhead.

Oaks verified the information in the letter and that he signed it in a subsequent conversation with an undercover FBI employee posing as a HUD employee.

In late April, during a discussion about compensation, Oaks placed a Tootsie Roll lollipop in his mouth and the informant held up five fingers representing a $5,000 payment. Oaks responded by shaking his head and “making an upward motion with his thumb” signifying he wanted a higher amount, according to the affidavit.

Cash payments

Oaks received his first cash payment of $5,000 in an undisclosed hotel room on May 11, according to the affidavit. The informant warned Oaks not to put the cash into his bank account.

“Oh, no,” Oaks said, according to the affidavit.

Prior to that meeting Oaks, continued to express concerns that the FBI was monitoring his calls and was reluctant to talk on the phone about their arrangement.

A month later, the informant took Oaks to an AT&T store in the city and purchased him a pre-paid cell phone, according to the affidavit.

Oaks later took two more cash payments of $5,000 each, most recently in September.

Daily Record Legal Affairs Writer Anamika Roy contributed to this report.

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