'Serious conflict': GOP Senate hopeful accused of funneling money to his firm as governor

A candidate in a high-profile U.S. Senate race is now being accused of corrupt behavior for awarding millions of dollars in development contracts to his real estate firm.

On Thursday, TIME Magazine reported that Larry Hogan — the former two-term Republican governor of Maryland now running for Senate — helped steer almost 40% of all affordable housing contracts to clients of the company he refused to divest from during his eight-year tenure.

The ex-governor's firm, HOGAN, which TIME described as a "multi-purpose real estate brokerage firm based in Annapolis," had no such success during his predecessor's time in office.

In its report, TIME noted that HOGAN clients were awarded 0% and 30% of affordable housing contracts in the Old Line State in 2011 and 2012, respectively. But after he took office, his company became much more successful at winning development deals. In 2020, for example, HOGAN's clientele got $40 million in state funds and federal tax credits on 18 different projects.

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As governor, Hogan sat on the three-member Board of Public Works, which votes on awarding development contracts. The Maryland Republican personally voted in favor of awards between $600,000 and $1.8 million worth of contracts to four different HOGAN clients during his first three years in office. And as Maryland's governor, Hogan signed off on transportation infrastructure projects that were a short distance away from his company's properties in Brandywine and Hyattsville, making them more valuable as a result.

HOGAN's success in securing affordable housing contracts for its clients may have translated to a lucrative payday for Hogan, dwarfing his $165,000 to $180,000 annual salary as governor. Financial disclosure forms filed ahead of his second gubernatorial campaign showed that he made $2.4 million during his first term — notably the first time in Maryland history a governor made millions of dollars. TIME pointed out that in a recent financial disclosure form as a senate candidate, Hogan's net worth ranged from $12.3 million to $35 million.

When he was elected governor, Hogan didn't put his wealth in a blind trust, but rather put his brother in charge of the company and had multiple meetings with both his brother and company trustees during his first three years in the governor's mansion. According to former George W. Bush administration ethics official Richard Painter, Hogan committed "a serious conflict of interest" by participating in the contract award process without fully divesting from his firm.

Bart Harvey, who is a former Fannie Mae director and a former affordable housing developer in Maryland, told TIME that Hogan's hands-on approach to his real estate firm was likely enticing for potential clients doing business with the company, and gave HOGAN an inherent advantage.

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“The state has a large role to play in this because they actually allocate the credits. Hogan, as governor, was in charge of that,” Harvey said. “Developers, knowing that, may on their own go to his entity because they think they get a step up in the very competitive tax credit allocation process.”

Hogan is running against Prince George's County Executive Angela Alsobrooks in Maryland's U.S. Senate race. While he has positioned himself as a more moderate candidate and distanced himself from former President Donald Trump in an attempt to appeal to voters in the deep blue state, that may be more difficult given Trump's endorsement of his candidacy in June.

"Yeah, I'd like to see him win. I think he has a good chance to win," the former president told Fox Business. "We gotta take the majority."

Click here to read TIME's report in its entirety.