Cecil County Finance Chief Rakes in Annapolis Political Consulting $ as Taxpayers Pay Six-Figure Salary; Council Pleads for Budget Numbers, Gets Limited Answers

January 23, 2022


James Appel, the Cecil County Director of Finance who is paid more than $124,000 a year by local taxpayers, is also operating an Annapolis political campaign finances consulting business, earning at least $42,000 in 2021. At the same time, he has been working in Elkton just four days a week even as County Council members pleaded for many months for information on county expenditures and uses of millions in state and federal aid for COVID and economic relief.

Council concerns and questions about fiscal transparency have grown especially since the resignation of Rebecca Anderson, the longtime deputy finance director and budget manager, about two months ago. She took a fiscal position with the County’s public schools, which operate independently from the county executive’s administration. Anderson was much admired by Council members for her diligence and straight-forward responses to Councilors’ questions.

Appel, a longtime state Republican political operative in Annapolis where he continues to live, was hired by County Executive Danielle Hornberger (R), along with another Annapolis political operative, Lawrence Scott, who was hired as County Attorney despite the fact that he had never appeared in any state court or even entered a written “appearance” on behalf of a client, according to the state courts database. Both Appel and Scott have political ties to Dirk Haire, the chairman of the state Republican party, who supported Hornberger’s local political campaign in 2020 and also represented Hornberger in a court case that challenged the legality of her candidacy filings.

Appel’s ties to Haire paid off financially in 2021, providing a steady stream of $3,000 per month income for his services to the state Republican Party, according to state campaign finance reports of expenditures and recipients of payments from registered political committees. Appel is also listed as the “comptroller” of the state GOP, which also has a separate “treasurer,” according to the state party’s website.

Appel created a business, GOP Compliance, LLC registered with the Secretary of State in 2013, and listed its business address as a residence in Annapolis. State property records show the address is listed as his “principal residence” and claims a homestead property tax credit which is only allowed for a primary residence, not a business. GOP Compliance had its registration revoked by the state for failure to file required tax documents in 2019, according to state records, but the registration was reinstated at the end of December, 2020, shortly after Appel was appointed by Hornberger as her county Director of Finance.

During 2021, while Appel was holding the full-time job of Cecil County finance director, he also did substantial paid political/financial consulting work for the state Republican party and multiple GOP candidates’ campaigns, according to State Board of Elections records. Appel earned at least $42,000 in 2021, from the state GOP as well as individual state Republican candidates such as Harford County Del. Kathy Szeliga, who paid $1,400 to GOP Compliance, state records show.

Appel wears other political hats in state GOP circles, including longtime chair of the Anne Arundel County Republican Central Committee, that are of interest to Haire. Haire’s wife, Jessica, is an Anne Arundel County Council member who has filed to run for the GOP nomination for Anne Arundel County Executive in 2022. Jessica Haire, who is a lawyer, was co-counsel to her husband to represent Danielle Hornberger in the Cecil County Circuit Court case that challenged the legitimacy of Hornberger’s candidacy.

Hornberger’s campaign finance reports to the state did not list payments for the legal services she received from the Haires nor do they list the legal work as an “in kind” contribution. But Hornberger has found other ways to show her appreciation: her newest campaign finance report to the state this month shows that Danielle Hornberger recently transferred a $6,000 contribution—the maximum permitted amount under state law– from her own campaign account to Jessica Haire’s political fund. Hornberger also used her official county executive social media page to declare her endorsement of Mrs. Haire’s candidacy.

Meanwhile, the Cecil County Council has been pleading for months for a full accounting of the county’s fiscal status and how federal funds from the Trump-era 2020 “Cares Act” grants of about $16 million, had been used as well as any spending or plans for use of the first $9.9 million in Biden administration American Rescue Plan funds received by the county. (Another installment of about $9 million in “Rescue” funds to the county is expected to be received in the next two months.)

The answers have been belated, incomplete or non-existent, even as other counties in the state have provided full public transparency of COVID-related aid and economic recovery spending as well as initiatives to aid local residents to cope with the hardships of the pandemic. It was not until this month that the Council finally got some answers, but by no means a full accounting.

Despite federal rules for the Rescue plan aid requiring “non-entitlement” counties like Cecil who receive their aid via the state to have filed “informational” reports to the Treasury by 8/30/2021, Appel shrugged off Council inquiries recently by saying with a laugh that he just received the final regulations and there were as yet no plans on how to spend the money.

Appel’s belated accounting (with commentary by Scott) of the 2020 “CARES” aid finally disclosed to the Council that some of the money that was supposed to help local residents cope with the impact of the pandemic had instead been used to remodel Hornberger’s executive office. It was unclear precisely how much money was spent or the nature of the renovations or how they related to the pandemic. Several Council members have said privately that while construction work was being conducted for several months, they were physically barred by Scott from seeing or inquiring about the construction work.

One thing that is clear: the Cecil County government is awash with cash that the Hornberger administration is putting aside for as yet unknown uses. As several Council members noted during recent worksessions, the previous administration of Alan McCarthy (R) took a very cautious approach to budgeting in Fiscal 2021 at the start of the COVID epidemic and downplayed revenue forecasts due to uncertainties of the pandemic’s impact on the economy. But the economic growth, spurred by new businesses lured to the county during that administration, held up and revenues grew, rather than declined.

Coupled with the infusion of state and federal pandemic-related aid, much of which has not been spent, the county is sitting on substantial cash reserves as Hornberger prepares to draft her Fiscal 2023 budget that must be presented to the Council by 4/1/2022.

A recent analysis by Pam Howard, the former independently-elected county Treasurer and a respected self-described “numbers person” who appeared before the Council on another matter, offered an eye-opening analysis of the cash pile Hornberger (and Appel) are sitting on.

For the Fiscal Year 2021 that ended on 6/30/2021, the county’s General Fund revenues exceeded budget by $21 million. Howard also told the Council that the county has a $21 million “rainy day” emergency fund, while there is $6 million in a “budget stabilization fund”—which was created during the McCarthy administration to cushion against possible mid-year expenses and unexpected needs, such as snow removal costs after a blizzard.

In addition, the county had $11.5 million in its “Unassigned Fund Balance” account, Howard said.

Hornberger claimed that her Fiscal 2022 budget did not rely on tapping the “fund balance” reserve account to balance her budget. But in fact, one day after her budget took effect, she sent an “emergency” demand to tap that account for $2.1 million to provide state-required “maintenance of effort” funds to county schools or risk the loss of millions in state aid. That fiscal mismanagement means that the Fiscal 2022 budget was not actually balanced as Hornberger had claimed.

Meanwhile, Appel has been spending more time in Elkton since the departure of Anderson as the chief budget expert, sources said, but still not a full five-day office workweek. A caller to his office mid-day Friday was advised that he is “not in the office on Fridays” and any concerns about COVID are unlikely to be the cause, since the Finance Department’s phone system advises that visitors to the county building do not need to wear masks.

Appel had sufficient off-duty hours to travel to California last summer to transport a new large boat he purchased and sail it to Annapolis, and has posted photos on social media of extensive renovation work he is doing on the boat.

CECIL TIMES called and left voicemail messages, as well as an email message, at his office and personal cell phone number, with no response or comment. If he responds, CECIL TIMES will update this report.

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