Legal spending from Mosby campaign accounts did not violate Maryland law, election board finds

BALTIMORE — The use of campaign funds for the legal defense of both Baltimore State’s Attorney Marilyn Mosby and City Council President Nick Mosby did not violate state election law, according to a decision from the Maryland State Board of Elections.

Jared DeMarinis, director of the candidacy and campaign finance division for the board, said he notified attorneys for both officials Monday of his decision.

“The documentation was sufficient regarding the expenses in question,” DeMarinis told The Sun on Tuesday.

The state board launched an inquiry into the couple’s spending in early February after both filed reports with the state claiming legal costs paid out to multiple law firms as campaign expenses.

State law prohibits any candidate or political committee from using campaign funds for legal expenses related to investigations or court proceedings that “do not have a direct connection with the candidacy.”

Marilyn Mosby was indicted in January on federal charges of perjury and making false statements following a nearly year-long probe into her personal finances and campaign spending. Nick Mosby has not been charged, but was also a subject of the investigation, which subpoenaed him as well as two campaign treasurers.

Marilyn Mosby, who is facing reelection but has yet to officially file as a candidate, filed a report in January showing her campaign spent nearly $48,000 on legal expenses in 2021 — $37,500 to Reed Smith LLP in Washington, D.C. where her criminal defense attorney A. Scott Bolden practices, and $10,200 to Templeton Law Firm, owned by Granville Templeton, in downtown Baltimore.

Nick Mosby, council president since late 2020, spent $52,500 in campaign funds on attorneys — $12,500 to Reed Smith and $40,000 to Kostelanetz & Fink, a Washington, D.C.-based firm.

In letters to each candidate dated Feb. 2, DeMarinis noted recent news coverage of the pair’s spending and requested a letter of explanation from each candidate clarifying the nature and scope of the legal services provided. The letters additionally asked the candidates to explain the differences between legal spending from their joint legal defense fund and spending from their campaigns.

Attorney James J. Temple responded on behalf of both Nick and Marilyn Mosby. In a letter dated March 18, Temple argued the investigation into the Mosbys had “inserted itself into almost every aspect of their lives — including their respective campaign committees.”

“To use the language of your inquiry there was clearly ‘a direct nexus between the expenditure and the candidacy,’” Temple wrote.

Included in the submissions were letters from Temple and Bolden, representing Marilyn Mosby, and Caroline Ciraolo, representing Nick Mosby, detailing how their work was related to the pair’s campaigns.

Bolden said he reviewed campaign finance reports in conjunction with the case as well as subpoenas issued to Marilyn Mosby’s campaign treasurer, bank ledgers and internal communications. Bolden said his firm spent 25-30 hours working for the campaign committee of each Mosby. A “potential conflict” arose in the representation of both officials, Bolden wrote. He currently represents only Marilyn Mosby.

In her letter, Ciraolo said that Nick Mosby was interviewed by federal investigators in March 2021. His campaign treasurer, Carlton Saunders, and former campaign treasurer were also subpoenaed related to the case.

“Based on our collective experience with federal criminal investigations, we know that the government interviews the most critical witnesses to their case in close proximity to the date that the subject is interviewed,” Ciraolo wrote. “The fact that Messrs. Mosby and Saunders were interviewed on the same day, by the same agents, was confirmation of the government’s interest in Mr. Mosby’s campaign.”

Spokespeople or both Nick and Marilyn Mosby did not respond to requests for comment.

In two letters dated March 1, Temple said there was no need to differentiate between spending by the couple’s legal defense fund and their campaigns. The Mosby 2021 Trust launched in the summer of 2021 to collect donations for the couple’s legal defense.

“To date there have been no payments to any law firm hired by the candidate or the committee by any legal defense fund,” he wrote. “Therefore, there is no difference to be explained.”

Prosecutors claim Marilyn Mosby lied in 2020 about experiencing financial hardship during the pandemic so she could withdraw $81,000 without penalty from her City of Baltimore retirement savings account to make down payments on two Florida homes: an eight-bedroom rental near Disney World and a condo on the state’s Gulf Coast.

The state’s attorney also faces two counts of making false statements on loan applications in order to purchase the homes. Federal prosecutors said she lied on the loan applications by failing to disclose a tax lien and claiming a house near Orlando was going to be a second home when she’d already lined up a company to run it as a rental, a maneuver to secure a lower interest rate.

A trial for Marilyn Mosby is set for May, although her attorney has argued in pretrial motions that problems with the exchange of information between the prosecution and defense could impact that date.

The Democratic primary in the race for state’s attorney is slated for July 19.

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