Bracing for a post-election shakeup

PSC, DBED officials could be gone following O’Malley victory

Friday, Nov. 10, 2006

Gov.-elect Martin O’Malley plans to fire members of the state Public Service Commission, and analysts say he will also likely clean house of current cabinet members, including the head of the Department of Business and Economic Development.

Observers also said they expect O’Malley to work closely with the business community on key economic development issues such as transportation, workforce development and medical insurance for small-business employees.

“Consistent with what we said during the campaign, we will have a new public service commission, and we will very shortly, I hope, have one that’s more professional,“ said O’Malley, who ousted Gov. Robert L. Ehrlich Jr. (R) in Tuesday’s elections.

“But it is consistent with our drive to find more professional people,” O’Malley said. ‘‘There were few public agencies that failed quite so badly as the Public Service Commission.“

The commission, which regulates utilities, telecommunications companies, taxicab businesses and other businesses, has been embroiled in a controversy this year over a 72 percent residential rate hike requested by utility Baltimore Gas & Electric Co.

O’Malley takes over in January. ‘‘He’s focusing on putting together his transition team,” said spokeswoman Raquel Guillory.

Firing the PSC members would not necessarily be a negative move, said Anirban Basu, chairman and CEO of the Sage Policy Group, a Baltimore economic and policy consulting firm. The current commissioners do not have ‘‘credibility with a large portion of Maryland’s populace,” he said.

Bethany Gill, a PSC spokeswoman, said she had not heard about any plans for the four current commissioners. Former commissioner Karen Smith resigned earlier this year, so O’Malley would be making at least one appointment even if he retains the others.

As far as a new cabinet, it’s a tradition for new governors to choose their own members, especially when someone from a different political party takes over, Basu said.

‘‘Governor Ehrlich brought many talented people here. I hope they will get a close look,” said Basu, also an executive committee member of the Maryland Business Council of Baltimore.

Some officials with DBED and other departments have already done a lot of work to prepare for the thousands of jobs expected in Maryland in the near future through the Pentagon’s base realignment process, Basu said. It’s important not to ‘‘skip a beat” in that planning, he said.

During a news conference this week at Baltimore City Hall, O’Malley said he would reach out across party lines as he fills out his administration.

‘‘We are going to do our very best ... to recruit the most professional and committed people we can,” O’Malley said. ‘‘We’re going to do this regardless of party, but conscious of the fact that we also want a cabinet and a government that reflects our greatest strength as a people, which is our diversity.”

O’Malley said there will be no wholesale firing of political appointees from the Ehrlich administration. Ehrlich drew criticism for allegedly seeking to identify and fire Democrats.

‘‘I am going to go after professionalism, and we’re going to recruit the most professional people we can find,” O’Malley said.

In a brief statement outside the governor’s mansion in Annapolis this week, Ehrlich did not address his plans for the future or field questions from reporters. ‘‘One thing for sure, the next administration will inherit a state in very good shape,” he said.

Past cabinets often leave

Old cabinet members typically submit their resignations to give the new governor the opportunity to choose their own members, said Jim Brady, a former DBED secretary.

‘‘I would be surprised if any [present cabinet members] stay,” Brady said. ‘‘I would characterize [a cabinet housecleaning] as the normal state of affairs, especially when you have a party change like this one.”

DBED Secretary Aris Melissaratos, whom Ehrlich appointed in 2003, said he hasn’t really thought about what he would say if asked to remain in the position. ‘‘We’re working hard to make it a smooth transition,” Melissaratos said.

He cited the creation of thousands of jobs, work on biotechnology, nanotechnology and other high-tech development, and programs to expand Maryland exports as some of the highlights under his leadership.

‘‘I would hope the one-Maryland economic development vision we’ve put in place and the successful programs we have would be continued and accelerated,” said Melissaratos, who formerly was an executive for Westinghouse Electronics Systems.

James D. Fielder Jr., secretary of the Department of Labor, Licensing and Regulation, also served under former governors Parris N. Glendening and William Donald Schaefer, both Democrats, said Linda Sherman, a spokeswoman for the department. Fielder’s previous positions included acting, deputy and assistant DBED secretary.

‘‘It’s too early to say what will happen or what [Fielder] will do,” Sherman said.

Benjamin H. Wu, assistant secretary of business development for the capital region, which includes Montgomery, Prince George’s and Frederick counties, declined to comment on his plans. He works in DBED’s Rockville office.

‘‘The challenge ... is to continue the success [of DBED’s programs] in order for Maryland to remain on the forefront of technology and biotech,” said Wu, also the senior adviser for technology policy statewide.

Melissaratos said it was important to have a ‘‘balanced approach” between businesses and regulations, and that taxes be held in check.

During the campaign, O’Malley pledged to create new economic opportunities in biotechnology, homeland security and defense industries, plus help small businesses pay for medical insurance and reduce paperwork. He also said he would expand opportunities for minority- and woman-owned businesses, fully fund the Thornton education plan, reduce college tuition and increase the tax credit for companies that manufacture renewable fuels.

Slots on the table?

In his campaign, O’Malley voiced limited support of slot machines at Maryland racetracks. Ehrlich promoted slots relentlessly, but to no avail in the Democratic-controlled legislature.

The governor-elect might have more success on slots than his Republican predecessor, Basu said. ‘‘The legislature now has a greater interest in making this governor look effective,” he said.

House Speaker Michael E. Busch (D-Dist. 30) of Annapolis, a slots opponent, said he hoped the legislature wouldn’t ‘‘waste any great energy on [slots] like we did the [last] four years.”

Cricket Goodall, executive director of the Maryland Horse Breeders Association of Timonium, said she was hopeful that lawmakers would adopt slots. But she said that, like O’Malley, Ehrlich also talked about limiting slots to racetracks early in his administration. Then some lawmakers wanted to expand slots to other venues, while others wanted no part of them, and the matter died in the General Assembly.

‘‘It’s not a new idea” to limit slots to the state’s four racetracks, Goodall said.

‘He’s not anti-business’

While some have questioned O’Malley’s interest and commitment to business issues, Basu said O’Malley did have the support of many business leaders and had worked with the business community in Baltimore on economic development and other matters.

‘‘He’s not anti-business,” Basu said. ‘‘O’Malley understands how important the business community is. He understands the business community’s role in attracting jobs.”

O’Malley developed a close relationship with the Greater Baltimore Committee, a Baltimore organization of business and civic leaders, said Gene Bracken, a spokesman for the committee.

While most chambers of commerce and business organizations endorsed Ehrlich, some sent out statements following Tuesday’s election congratulating O’Malley and pledging to work with him. Those included the Montgomery County Chamber of Commerce and the Greater Washington Board of Trade’s Maryland Political Action Committee.

The latter noted it had previously praised O’Malley for supporting the Intercounty Connector, the Purple Line and increased funding for higher education.

Divided federal government

While Maryland moved from divided government back to one-party rule, the federal government went the other way, Basu noted, as Democrats wrested control of the U.S. House and likely the Senate from Republicans.

Rep. Benjamin L. Cardin (D-Dist. 3) of Pikesville, who defeated Lt. Gov. Michael S. Steele (R) in the U.S. Senate race, doesn’t have a real strong following in the business community, Basu said. But that might not matter as long as Democrats don’t take positions that could hurt many companies, he said.

On the federal level, business leaders will likely be concerned about issues such as regulating industries and raising the minimum wage, Basu said.

Staff Writers Steve Monroe and Douglas Tallman, and Chris Yakaitis and David J. Silverman of Capital News Service contributed to this report.