What Gov. Hogan’s Ethics Disclosures Tell Us — And What They Don’t

By Edward Ericson Jr.

Three years into his administration, a trust representing Gov. Lawrence J. Hogan (R) continues to invest in real estate projects, including at least 16 new land deals since taking office.

Hogan’s investments are perfectly legal, approved by the State Ethics Commission and listed on his annual disclosure form. But because the disclosure process for state officials is so opaque, it leaves many questions unanswered about the extent of Hogan’s holdings, how much he knows about them, and what potential conflicts of interest, if any, may exist.

Hogan’s assets are controlled by a trust—but it’s not a blind trust. He and the State Ethics Commission opted instead for a “trust agreement” that set guidelines for Hogan’s investments, how much he was required to disclose publicly, and ethics commission oversight.


This empty lot near the West Hyattsville Metro station is part of a proposed mixed-use development that the Hogan Companies is helping develop. Photo by Josh Kurtz

One national ethics expert questioned the effectiveness of such oversight.

“That does not address in any way the potential conflicts of interest,” says Kathleen Clark, a lawyer and law professor at Washington University, St. Louis, who has written extensively on ethics in government.

The ethics commission has kept Hogan’s trust arrangement, and all correspondence associated with it, confidential. Two months after Maryland Matters requested information for this story, Hogan’s spokesman, Douglass V. Mayer, voluntarily released the trust agreement along with three letters between Hogan, the governor’s general counsel, Robert F. Scholz, and Ethics Commission Executive Director Michael W. Lord.

Mayer said no other news outlet has ever asked to see the documents.

The trust agreement and letters indicate that Hogan was in office for more than a year before the trust agreement was executed — though Hogan, his counsel and the commission had been in touch since his election. In the letters and the trust itself, Hogan pledges not to direct his eponymous business empire in any way, and to respect the state’s “prestige of office” regulations, which forbid an official from using his government position to improve his business prospects. But the governor does state that he expects to be updated on its profitability and its holdings.

Hogan’s immediate predecessors became governor after long careers in elective office. They may have had investments that the ethics commission needed to monitor, but they did not leave a flourishing business to take office, as Hogan did.

In Hogan’s case the ethics process appears to have been set up so that he can be briefed in the broadest sense on the economic health of his business holdings and return to the company after he leaves office.

“In our discussions, we have had to deal with the fact that I have continuing interests in active and ongoing businesses which cannot be placed into a blind trust pursuant to the Commission’s regulations,” Hogan wrote to Lord, in a letter dated April 10, 2016. “The Commission approved the trust document which includes some of the provisions generally found in blind trusts.”

He goes on to name the trustees: Victor White, Jacob Ermer and David Weiss. White is chief operating officer of The Hogan Companies, Ermer is vice president, and Weiss is a former executive, employed by Hogan for 14 years. According to his Linked-In account, Ermer has been a Realtor since 2012 with Coldwell Banker.

Damon Effingham, executive of the nonprofit government watchdog Common Cause Maryland, said that “short of complete divestiture,” the arrangement would not sufficiently erase doubts about whether the governor can avoid all conflicts of interest.


Damon Effingham of Common Cause Maryland

“There is a lot of differences between Donald Trump and Larry Hogan,” Effingham said. But Hogan’s trust agreement, he added, is similar to Trump’s in that it’s not a blind trust and it leaves his businesses in the hands of relatives and employees.

Effingham says this is becoming increasingly common: “In a lot of cases, they’re really just a sort of show of ethical behavior: ‘Hey, I’m taking myself out of this but I’m still getting the profits.”

Nine Active Land Deals

Two projects in Hogan’s portfolio are close to a state highway improvement project that Hogan announced, along with several others, in 2015.

There is no indication that the governor deliberately took an official action to benefit himself financially, considering the road improvement project was on state transportation planners’ since 1984 and the first funding was first provided under Hogan’s predecessor, former Gov. Martin J. O’Malley (D). The plan was developed over the years in consultation with state and local leaders.

The $55.7 million overpass on Maryland Route 5, complete with a roundabout, sidewalks and a 247-space rideshare parking lot, is a stone’s throw from a proposed 310-apartment residential development the governor partially owns on 12.5 acres behind the Xscape Theater complex at Brandywine Crossing, near the border of Prince George’s and Charles counties.

Hogan’s company subsequently established a second, 75-acre development, proposing town houses, garden apartments, medical office space and an assisted living center, less than a mile up the road from the planned new overpass project, expected to be completed by the summer of 2019.

They are two of at least nine active land deals the governor has taken a financial interest in since he took office, according to his financial disclosure form.

In his latest ethics filing, submitted in April of 2017, the governor disclosed substantial ownership—between 11 and 33.3 percent—in 16 limited liability corporations that have been chartered since his January 2015 inauguration.

The form lists only the names of the LLCs, with no information about what the businesses do or own.

Using public documents, Maryland Matters was able to map nine of these projects. The rest do not yet appear to have recorded deeds or requested planning or zoning approvals that would detail their holdings.

Mayer, the governor’s spokesman, said Hogan cleared all this with the State Ethics Commission.

“Upon taking office, Governor Hogan and the Ethics Commission worked to make sure that all parties are protected from conflicts of interest,” he said in a December email, before releasing the trust agreement to Maryland Matters. “The Ethics Commission approved a financial interest exception and as part of that approval the governor placed his interests in an Ethics Commission approved trust, under which the Hogan Companies are overseen by trustees without any consultation with or any involvement of the governor.

“Additionally, the governor made specific commitments as to non-participation, in any Hogan Companies matters,” Mayer said, adding that the new companies are listed in the latest report “because the Hogan Companies have continued to invest in real estate, although without any involvement of the governor whatsoever.”

Under state ethics law, a public official seeking to place his or her assets in a certified blind trust would have to turn all assets over to a trustee who had full control of them.

“An interested party may not have the ability to learn of the assets of the trust or the actions of the trustee,” according to the law – which is why the ethics law also says that assets held in a blind trust need not be disclosed on the state financial disclosure form: the ethics form itself, which is a public record, would unblind the trust.

But Hogan’s trust agreement appears to give contradictory statements about the degree to which the governor can learn what his companies are investing in. At Schedule B, Hogan waives any right to information about the administration of the trust.

But item C on page 2 of the trust agreement states that “Neither this Trust nor the agreement to refrain from all participation in management and direction of the assets in the Trust limits the information regarding the Trust assets which the Interested Parties may receive from the Trustees. The intent of the Parties is that they not participate in business decisions made by the Trustees.”

But if the agreement does not limit the information Hogan can receive from the trustees, what assurances do Marylanders have that the governor couldn’t put himself in a position to improve his own prospects through his official actions?

 “The governor is not updated on the status of the business,” Mayer said in an email earlier this month. “The trustees have periodically updated the governor on the status of the trust over the past three years as provided for by the agreement. “Article 2(A), (B) and (C) of the Trust work together to prohibit advance consultation or solicitation of advice with respect to the business activities of the Trust. Very simply, the Trust goes further than current Maryland law.”

To prevent a politician from being able to guess whether any official actions might benefit his personal holdings, Maryland ethics law directs that a blind trust may not have any single holding that exceeds 20 percent of the trust’s assets. The law also limits the assets so that no single “economic sector” can comprise more than 30 percent of an official’s blind trust.

Designed mainly for public stock, blind trusts simply don’t work well for companies, like Hogan’s, that deal in speculative land purchases, real estate development and brokerage in the state he governs. Hogan’s trust is filled with Hogan’s companies.

An exception to this rule is possible if the trust were created prior to 1995. Hogan’s was not.

The other exception is if, in the ethics commission’s judgment, “the particular holdings present no conflict of interest under General Provisions Article, Title 5, Annotated Code of Maryland.”

That appears to be the case here.

Lord, the state ethics commission director who took the job in 2011, when O’Malley was governor, says the state’s ethics law requires that its agreement with the governor be secret.

“The Commission does not disclose advice it provides concerning the application of the ethics law,” Lord wrote in an email, “nor does it disclose whether advice has been requested.”

He said he prefers the word “confidential” to “secret,” and that the governor’s ethics disclosures speak for themselves.

Hogan’s brother runs the company

According to the governor’s ethics filing, The Lawrence J. Hogan Jr. Trust is the 100 percent owner of The Hogan Group, LLC, which in turn owns varying stakes in six other Hogan companies. Those six companies own or control dozens more, including the 16 detailed in this story, which are subsidiaries of Hogan Development, LLC.

Hogan Companies, LLC, whose website details various Hogan companies’ involvement in commercial and residential real estate, land brokerage, consulting and investment, is helmed by the governor’s younger brother, Timothy.


Timothy Hogan

Timothy Hogan joined the family business while he was still in college. A 2014 profile on the Bisnow web page of business publications said he was “running 39 projects across nine jurisdictions” then, “each one with co-investors. . . . Many of its deals also are off market.”

Founded by Larry Hogan in 1985, “The Hogan Companies have completed $2 billion in real estate transactions by bringing sellers and buyers together to create win-win scenarios,” according to its website. “We have been involved in the acquisition, entitlement, development and disposition of more than 35,000 acres of land. Commercial real estate brokerage, including marketing, sales and leasing of commercial and industrial properties, has always been a primary focus for the firm.”

In addition, the company “offers a streamlined process of acquisition, sales and marketing services for builders. We have a lot and custom home division and we can even assist select home buyers in the purchasing of a home,” the website says, and “may also be willing to directly invest in or identify equity funds or other investors who would participate in your real estate opportunity. If you want to maximize your return on a property, figure out the best strategy to achieve the optimum results and highest value, we are the only ones to turn to.”

When the Hogan companies “directly invest,” the governor has to disclose his ownership. If the holdings were in a blind trust, this would not be required under Maryland law.

Larry Hogan’s ethics disclosure from 2014, when he was a candidate for governor, lists ownership in a total of 20 companies, 16 fewer than he listed two years later. It is unclear if Timothy Hogan, who did not respond to phone messages and an email from Maryland Matters, holds ownership of projects that his brother does not.

Hogan was asked about his land holdings after his election in 2014. He declined to divulge the names of the private companies under which he did business, and he was tight-lipped about his public plans as well, saying he would address policy concerns after he took office. “I’m going to be governor on Jan. 21, and we’ll start talking about policy then,” Hogan told a reporter for The Baltimore Sun. “In the meantime, we’re going to put our transition team together.”

At the time, the Capital Gazette reported, the Hogan Group’s “largest current project is a 51-townhouse development planned at 7836 Telegraph Road” in Severn, Md.

Public records and the Hogan Companies’ website indicate that the governor owns interests in at least six larger projects underway now [see map and list below]. According to the Bisnow profile, The Hogan Group took a contrarian strategy during the Great Recession, partnering with “high net-worth individuals” to buy land it considered undervalued and awaiting the recovery.

As with most real estate deals, the names of its partners are not typically disclosed.

Hogan has never publicly spoken about his ownership of private developments while in office. In a letter to Lord, dated April 11, 2016, the governor pledged to “delegate” any official act he would be required to take in which his companies had a “specific interest.”



Robert F. Scholz, Gov. Hogan’s general counsel 

In his email this month, Mayer said the governor has never yet delegated a decision, but if there were an opportunity to do so, Scholz, his general counsel, who was chairman of the Ethics Commission for three years during the O’Malley administration, when Lord was appointed executive director, would handle it.

A blanket ruling

Hogan served as governor for eight months before the Ethics Commission granted him an “extraordinary exemption” from the law, though he and his counsel had been in communication with the panel since before Hogan took office.

In its Feb. 12, 2015 meeting, Lord “briefed the Commission on a request he anticipates will be received soon from the Governor’s Office for an extraordinary exemption on behalf of a public official,” according to the minutes — which suggests Hogan was in office for at least three weeks before the Ethics Commission could act.

There was no further indication of any such request until the Sept. 10, 2015 meeting, by which time no fewer than seven new LLCs had been created in which Hogan holds an interest, including Brandywine Crossing Realty Partners—the 12.5-acre site behind the movie theater and shopping center.

In that meeting, Item 54 on the agenda read: “Informal Matter – Financial Interest of Elected Official (15-0361) Discussion: Ms. [Jennifer] Allgair [the panel’s general counsel] briefed the Commission on a financial interest exception request from an elected official who wants to retain ownership interests in several private businesses,” the minutes report.

“Decision: The Commission granted an exception to allow the financial interest and approved the proposed nonparticipation plan outlined by the elected official.”

The very next matter on that agenda involved a University of Maryland employee who wanted to “retain a financial interest in a private LLC where he serves as one of three managing members and holds approximately 30% of the outstanding equity.”

The commission denied that request.

It has not been previously reported that the governor’s eponymous development company was buying new parcels and planning new developments in the months after the governor took office but before he came to a “non-participation” agreement with the ethics commission.

Lord told Maryland Matters that, generally, the ethics law requires the commission to issue an advisory opinion not more than 60 days after receiving a request—and sooner if circumstances require it.

However, he wrote in an e-mail: “On rare occasions, generally due to the complexity of an issue and/or the need for additional information from the requester, it takes the Commission more than 60 days to render the requested advice. In such cases the requester is apprised of the need for additional time (and may actually be the reason for the delay as the requester is gathering information to address the Commission’s questions).”

The governor’s office released to Maryland Matters the April 22, 2016 letter from Lord to Scholz, Hogan’s chief counsel, which refers to the financial interest exception granted on Sept. 10, 2015.

“The commission reviewed this matter as an informal advice request and, therefore, the matter is confidential pursuant to the Commission’s statute and regulations,” Lord wrote. “The Trust Agreement is not part of the Governor’s financial disclosure file and is not available for public inspection pursuant to . . . the Public Ethics Law.”

Clark says Maryland law is unusual. “There is a place for, in my view, certain types of [ethics] advice to be confidential,” she said. “But I am surprised that advice from an ethics commission to a sitting governor would be confidential.”

It is not known who, if anyone, monitors the trustees or the governor to assure compliance with his “non-participation arrangement.” There is no public indication of any process by which anyone could check, or sanction, the governor if he violates the agreement.

The governor disclosed new ownership in the following 16 LLCs in his April 2017 filing [see map]:


Chartered by David Katz, the longtime chief legal officer of the Hogan Group, on June 12, 2015, the company took control of 11 acres on East Joyce Lane in Arnold for $3.2 million. The governor’s ethics form disclosed a 12.5 percent stake, and the company sold the development for $4.9 million to Hovnanian Homes in August 2017.


Chartered by Bryan Hyre—a partner at Lessans, Praley & McCormick and the Hogan Group’s other go-to real estate lawyer—on Aug. 5, 2016, this company spent $2.2 million for 75 acres near Branch Avenue and Brandywine Road in Brandywine, less than a mile from a $55.7 million road project the governor announced the year before. Proposed is a mixed-use development with townhouses, garden apartments, medical office space and an assisted living center. The governor divulged that the Hogan Cos. had an ownership stake of 13 percent.


Hyre chartered this company on March 3, 2015, less than eight weeks after Hogan’s inauguration. The company bought 12.5 acres on Matapeake Business Drive, behind the Brandywine Crossing shopping center, just down Route 5 from the Black-Eyed Susan project. The land sale has not yet been recorded in public records. A real estate newsletter reported that the proposal is for 310 garden apartments in partnership with Fairfield Companies of Copley, Ohio. Hogan disclosed 25 percent ownership for his company.


Chartered by Hyre on March 9, 2015, Diamondback controls seven acres near the intersection of Crain Highway and Crawford Boulevard in Crofton. It has proposed a multi-family residential development, and requested a zoning variance to eliminate a requirement for a commercial use on the parcel. County zoning officials recommended the change. The governor disclosed a 25 percent stake in the project; the land sales price has yet to be recorded.


Hyre chartered this one on Jan. 6, 2017. The company paid $1.4 million for 20 acres at the intersection of Route 301 and Route 725 in Upper Marlboro, and plans an unspecified mixed-use development to be called “The Preserve at Upper Marlboro.” Hogan disclosed a 16.25 percent ownership stake for his company.


Hyre formed this LLC on Aug. 12, 2016; it bought “The Bean Property”—63.6 acres at 11100 Westphalia Road in Upper Marlboro—for $2.2 million. The proposal includes some 300 dwelling units in a mix of townhomes and single-family units. The governor disclosed 13 percent ownership for his company.


Katz serves as resident agent for this one, established Feb. 1, 2017, controlling 4.5 acres on the 600 block of Brightview Drive in Millersville for an as-yet undisclosed sum. The company—32.5 percent owned by the governor’s business, according to his ethics disclosure—has proposed townhomes and requested a rezoning from the current R2 (two houses per acre) to R10. The zoning change is pending approval by the Anne Arundel County Council. Zoning officials did not oppose.


This is another Katz company, formed on Nov. 7, 2014, three days after Hogan was elected governor. Hogan claims his company has a 25 percent stake. The Villas controls a 20-acre parcel at 1070 Minnetonka Road, Severn, but has not recorded the deed with the price of purchase. It proposed an assisted living community with 49 attached and detached units, and requested a special exception from the county zoning board for the assisted living project in an R1/R2 zoning district and to eliminate an open space zoning designation on part of the property. The zoning board recommended approval.


This is the second company Hyre chartered on Hogan’s behalf on March 9, 2015. The 18.5-acre development at 5620 Ager Rd. in Hyattsville has been dubbed “The Riverfront at West Hyattsville Metro,” and plans 183 townhouses and 300 apartments along with 9,000 square feet of retail floor space near the West Hyattsville Green line station. A community park will occupy 4.5 acres. Construction and marketing by Gilbane Construction is ongoing. The governor disclosed an 11.5 percent ownership stake in this project.

In addition to the above nine companies, Hogan also disclosed ownership interests in the following seven LLCs that had not appeared on his first financial disclosure form. Maryland Matters could find no public records on them beyond the corporate charter.

This is not unusual, as developers routinely option land privately months or even years before closing a deal. LLCs are a fairly secretive way to do business, requiring only the disclosure of a resident agent and nothing about the company’s shareholders, partners, lenders or activities.

BLUE CRAB REALTY COMPANY, LLC, established May 27, 2017, by David Katz. The Hogan Cos. own one-third of this company, according to his ethics disclosure.

BLUE RIDGE REALTY PARTNERS, LLC, established Feb. 24, 2016, by David Katz. Hogan claims 13 percent ownership.

FREE STATE LAND COMPANY, LLC, established July 17, 2015, by Katz, with Bryan Hyre taking over as the registered agent in January 2017. Hogan lists 21.25 percent ownership for his company.

FREE STATE REALTY PARTNERS, LLC, established with Katz as registered agent on December 2, 2015, and switched to Hyre in January 2017. Hogan’s company owns 27 percent.

HOLOMATZ DEVELOPMENT, LLC, established by Katz on May 5, 2016. Unlike all the other corporations, which are domiciled at one of two Hogan Group offices, this one lists its address as 1931 Pendennis Drive, Annapolis, which Katz owns and claims as his principal residence. Hogan lists 32.5 percent ownership.

IRON WILL REALTY COMPANY, LLC, established May 20, 2016, by Bryan Hyre. Hogan’s business owns one-third.

LEGACY INVESTMENTS, LLC, established Aug. 16, 2012, by Timothy Hogan. The governor owns 25 percent of this company, according to his 2017 disclosure with the state ethics commission. He did not list ownership of the company on his 2015 filing.

STAR-SPANGLED INVESTMENTS, LLC, chartered on June 12, 2016 by Katz. A company with the same name was chartered in Utah about three weeks before this one, but it appears unrelated.


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