The News Journal | by Sarah Gamard
Some members of the Delaware General Assembly are second-guessing their yes votes on a bill that allowed Kent County to tax hotel stays and give the resulting $1 million in revenue to DE Turf, a sports complex near Frederica.
After learning the tax could benefit a proposed development championed by John Paradee – brother to the lawmaker who sponsored the bill – Sen. Cathy Cloutier, R-Heatherbrook, is one of the lawmakers who thinks there is a conflict of interest.
“It doesn’t look good,” Cloutier said.
Bill sponsor Sen. Trey Paradee, D-Dover, said he had “no idea” about his brother’s involvement in the development or that he sat on DE Turf’s board.
But in 2014, when plans for the sports complex began to move forward, The News Journal reported that John Paradee was one of the developers of Asbury Square.
“I would love to see the sports complex be built there,” John Paradee said at the time. “It would obviously benefit a lot of my clients and potentially myself, as well, but that’s not why I’m involved.”
Cloutier said if Sen. Paradee really didn’t know about his brother’s involvement, he “can’t be really held accountable for something he didn’t know.”
The News Journal reached out to all 57 lawmakers, excluding Paradee, who voted in favor of the tax. Cloutier is among 20 who responded.
More than half said they would have reconsidered their yes vote, though some, including Cloutier, said they still probably would have voted in favor.
Four lawmakers said they would have still voted for the bill had they known John Paradee was pushing for a development across a highway from DE Turf and sat on the sports complex’s board. Three did not answer whether their vote had changed.
Many of the respondents also said they would have pressed for more answers about the details of the bill before voting if they had known of the potential conflict.
“It really disturbs me that I wasn’t as fully aware as I should have been,” said Rep. John Kowalko, D-Newark.
In the last days of the legislative year, lawmakers overwhelmingly passed the bill sponsored by Sen. Paradee that gives Kent County the power to tax its hotels and motels up to 3% of room rates.
That revenue, expected to reach nearly $1 million, would then flow directly to DE Turf, a private venture. It would help the facility attract more tournaments and, according to backers of the tax, bring tens of millions of new dollars into the county.
Kowalko wants the General Assembly to consider repealing the legislation. The lawmaker said he did not realize at the time that it allows a countywide hotel tax revenue to go to one nonprofit.
“To me, it’s not a logically proven investment that’s going to make money,” Kowalko said.
The General Assembly scrambled through three versions of the bill in the week before passing it on the final day of the legislative year, June 30. Only Reps. Richard Collins, D-Millsboro, and Ruth Briggs-King, R-Georgetown, voted against it. The governor signed the bill into law in mid-July.
The hotel tax proposal came just as John Paradee moved forward with plans for Asbury Square, a hotel, restaurant and retail development on a 21-acre field adjacent to the rural sports complex.
John Paradee filed an application with the state for the development two days after his brother’s bill passed. On the application, there were three listed owners of the 21-acre property, all limited liability companies.
John Paradee’s name is listed on the LLC’s filings. He has represented at least one of the entities, JMER Properties LLC, at municipal government meetings.
Of the lawmakers who responded for this story, only bill co-sponsors Sen. Colin Bonini, R-Dover, and Rep. Jeffrey Spiegelman, R-Clayton, said they knew that John Paradee sits on DE Turf’s board.
Only Spiegelman, as a commercial realtor, said he knew about John Paradee’s involvement with the adjacent hotel and restaurant development.
The Kent County Levy Court plans to publicly discuss the DE Turf hotel tax during its Nov. 5 meeting, though an agenda is not set in stone. Commissioners will not vote whether to implement the tax during that meeting, and there will be a chance for public comment, according to a county spokesperson.
Lawmakers struggle with new information
Some lawmakers were concerned to learn about John Paradee’s involvement.
“I would have definitely given it some different consideration,” said Sen. David Wilson, R-Cedar Creek Hundred, who helped sponsor the bill. “I do see it as a conflict of interest with someone benefiting out of it.”
Some said they were disappointed.
“There were colleagues that had facts and chose to hide them,” Rep. Michael Smith, R-Pike Creek Valley, wrote in a text. “Maybe if we had more balance in Delaware these type of things wouldn’t be pushed in the 11th hour.”
Rep. Bill Carson, D-Smyrna, another co-sponsor, said he didn’t know about John Paradee’s involvement with DE Turf. He didn’t know when pushing the bill why the hotel tax revenue was only for DE Turf, he said.
“I did not talk to the sponsor or the co-sponsors … directly about that,” Carson said. “It should have been where the county only had the ability to put the money where they wanted.”
Others would not have changed their vote
Several who defended their vote stressed that the legislation leaves the final decision up to Kent County officials. Many said they were told it would spur economic development in the county.
“I don’t think it really matters,” said Rep. Sean Lynn, D-Dover, when asked whether John Paradee’s involvement would have influenced his vote. “I didn’t know about it,” said Lynn, who helped sponsor the bill. “How would I?”
Some, such as Spiegelman think the claimed purpose of the proposed hotel tax— to spur economic development in Kent County — outweighs John Paradee’s involvement with DE Turf.
“(John) Paradee is one of the most prominent land use attorneys in Kent county and, in a place this small, there are not many degrees of separation,” Spiegelman wrote in a text.
Sen. Laura Sturgeon, D-Brandywine West, said she would have still voted yes if she knew that the bill was supported by Kent County officials to spur economic development.
“If this bill really were simply a sweetheart deal for the Paradee brothers, I doubt the other co-sponsors would have attached their names to it and I doubt all the other Kent (County) legislators would have voted for it,” Sturgeon wrote in a text.
Sen. Bryan Townsend, D-Newark, said he also probably would have still voted for the bill.
“For me, the concern … is whether or not Delaware Turf itself is in a far more competitive industry than perhaps some of us were led to believe,” Townsend said. “Delaware is too small of a jurisdiction to win bidding wars.”
‘There’s going to be more of these in the future’
John Flaherty, director of the Delaware Coalition for Open Government, thinks more lawmakers should publicly admit whether they did or did not know about John Paradee’s involvement with DE Turf.
“They should be ashamed of themselves,” Flaherty said about the lawmakers who are not speaking out about their vote on the legislation. “They have an obligation to address these kinds of questions.”
When told that he was one of a minority of lawmakers who responded to The News Journal for this story, Rep. Kowalko said he was “disappointed” that some of his colleagues “don’t have the courage to explain why they took a stance.”
“You have to be able to explain why you voted for something,” Kowalko said. “Otherwise, I don’t think you should be casting votes.”
Kowalko thinks that some lawmakers are not speaking out about their vote because they don’t want leadership to accuse them of publicly attacking their own colleagues. He also guessed that some lawmakers are “too willing” to protect “the person they may suspect of having had a special interest in this.”
Some lawmakers said they were not surprised that Sen. Paradee insisted he did not know about John Paradee’s involvement with DE Turf because they don’t pay attention to which entities their own family members are involved.
“My brother doesn’t know what boards I’m on and I don’t know what boards he’s on,” Sen. David Sokola, D-Newark, said.
Flaherty doesn’t buy that explanation.
“These nonprofits, they seek out legislators and their families to sit on their boards,” Flaherty said. “When the legislator says, ‘I didn’t know my brother serves on this board,’ they’re either not doing their homework or it’s just not a believable argument.”
Flaherty said lawmakers should make an effort to know where their family members have a financial stake.
“You have an obligation to at least know who are the people that are going to benefit from this action,” Flaherty said. “Sen. Paradee should have known the close family connection because, at minimum, it’s going to raise suspicion.”
Sokola said the hectic nature of the final month of the legislative year makes it hard for lawmakers to scrutinize every bill. Elected officials would know every time a family member might benefit directly from a bill “in a perfect world,” the lawmaker said.
In Delaware, the House and Senate ethics committees are responsible for investigating laws related to potential conflicts of interest in the General Assembly. Only lawmakers can request these committees investigate other lawmakers.
Flaherty called the system a “double standard” because lawmakers “don’t have those kinds of checks and balances that the rest of the state has.” Few lawmakers ever speak out against one another, likely because they want to have the votes to get their own bills passed, he said.
Senate Majority Leader Nicole Poore, D-New Castle, who sits on one of the legislative ethics committees, defended Sen. Paradee. She did not say whether the new information would have changed her vote.
“If Trey thought that there was an issue, Trey would have absolutely said something,” Poore said.
Flaherty thinks lawmakers should pass a bill to make their actions subject to an independent oversight board, such as the Public Integrity Commission, that can investigate their actions with an “arms length relationship.”
Until then, Flaherty said, “There’s going to be more of these in the future.”
Of those who said they did not know about the conflict when they voted, three lawmakers would have changed their vote
- Sen. Bryant Richardson
- Sen. Dave Lawson
- Rep. John Kowalko
Four would have still voted for the bill
- Rep. Steve Smyk
- Sen. Colin Bonini
- Rep. Jeffrey Spiegelman
- Rep. Sean Lynn
Ten would have reconsidered their vote
- Sen. David Sokola – Unsure if he would have changed his vote
- Sen. Brian Pettyjohn – Unsure if he would have changed his vote
- Rep. Kim Williams – Unsure if she would have changed her vote
- Rep. Michael Smith – May have changed his vote
- Rep. Michael Ramone – May have changed his vote
- Sen. David Wilson – May have changed his vote
- Sen. Laura Sturgeon – Probably would have still voted for it
- Sen. Stephanie Hansen – Probably would have still voted for it
- Sen. Bryan Townsend – Probably would have still voted for it
- Sen. Cathy Cloutier – Probably would have still voted for it
Three said they didn’t know about the conflict, but didn’t answer whether knowing would have changed their vote
- Sen. Nicole Poore
- Rep. Bill Carson
- Rep. Tim Dukes
Most lawmakers still mum after voting for the hotel tax
The News Journal did not hear from the following lawmakers who also voted for the bill after numerous requests for comment: bill co-sponsor Sen. Bruce Ennis, D-Smryna; R-Marydel; bill co-sponsor Rep. Andra Bennett, D-Dover East; bill co-sponsor Rep. Bill Bush, D-Dover; Rep. Jesse Vanderwende, R-Bridgeville; Rep. Kendra Johnson, D-Bear; Rep. Franklin Cooke, D-New Castle; Rep. John Viola, D-Newark; Sen. Jack Walsh, D-Stanton; Rep. Debra Heffernan, D-Bellefonte; Rep. Ray Seigfried, D-Brandywine Hundred; Rep. Ron Gray, R-Selbyville; Rep. Shannon Morris, R-Farmington; Sen. Gerald Hocker, R-Ocean View; Rep. Kevin Hensley, R-Townsend; Rep. David Bentz, D-Christiana; Rep. Sean Matthews, D-Talleyville; House Speaker Pete Schwartzkopf, D-Rehoboth Beach; Rep. Nnamdi Chukwuocha, D-Wilmington; Rep. Sherry Dorsey Walker, D-Wilmington; Rep. Bryan Shupe, R-Milford; House Majority Whip Larry Mitchell, D-Elsmere; Rep. Melissa Minor-Brown, D-New Castle; Rep. Stephanie Bolden, D-Wilmington East; Sen. Elizabeth Lockman, D-Wilmington West; Senate President Pro Tempore David McBride, D-New Castle; House Majority Leader Valerie Longhurst, D-Bear; Rep. Quinton Johnson, D-Middletown; Rep. Paul Baumbach, D-Newark; House Minority Leader Danny Short, R-Seaford; Sen. Darius Brown, D-Wilmington; Rep. Krista Griffith, D-Fairfax; Rep. Ed Osienski, D-Newark; Sen. Harris McDowell, D-Wilmington North; Rep. Gerald Brady, D-Wilmington West; Sen. Ernie Lopez, R-Lewes; Rep. Earl Jaques, D-Glasgow; Sen. Anthony Delcollo, R-Elsmere.