“The Executive shall devote full-time to the duties of the office. The Executive shall not participate in any private occupation for compensation. During the term of office, the Executive shall not hold any other office of profit.”
County Charter; Article 4, Section 405 (b) – Qualifications for the County Executive.
The rules of the Cecil County Charter are very clear in the matter of outside employment for the position of County Executive. After taking the role upon democratic election, an individual must end any employment in the private sector and step away from any business enterprises they may run.
In the case of retired veterinarian Dr. Alan McCarthy, the rules of his office need not apply apparently. His role in land development and real estate continued into his term as Executive.
Baker’s Hill LLC (McCarthy, plus Kenneth Simmons, Jay C. Emery III, and Stephen Baker) acquired a swath of land from Willard E. Megonigal Jr. of New Castle, DE, and developed the land into a townhouse community.
Initially, this was nothing out of the ordinary, just a group of investors looking to make a profit. But when the housing market tanked and sparked the Great Recession in 2008, the investors of Baker’s Hill fell on hard times and were unable to meet their financial obligations.
One by one, Baker, Simmons, and Emery withdrew from the LLC in 2013 and assigned all their interests to Dr. McCarthy (who as of 2012 was sitting on the Cecil County Council), leaving him the last remaining member of Baker’s Hill. In effect, McCarthy had bought out their stakes in Baker’s Hill and indemnified them from any future financial obligations.
Rather than pay the debt to Megonigal when it was due in July of 2016, Councilman McCarthy let it go into default while selling homes and collecting rent from more than thirty tenants; and making his bid for the position of County Executive.
On December 20th, 2016, County Executive Alan McCarthy (newly sworn in and bound to Article 4, Section 405 (b) of the County Charter) received a certified letter from the attorneys of Willard Megonigal stating that if the debt and interest were not paid, legal action would be taken against McCarthy and the other three investors.
On January 26th, 2017 the debt of $250,000.00 and interest of $6472.25 referred to as the Megonigal Note was paid off by Baker’s Hill LLC.
However, a one-member LLC called Ulysses claimed to have paid off the debt soon after and proceeded to sue Kenneth Simmons, Jay C. Emery III, and Stephen Baker to pay debts they were indemnified of when they assigned their interests to McCarthy. Any liability that may still exist vanished the moment the Note was paid off.
Ulysses LLC, which is owned by Dr. Alan McCarthy, and is therefore his proxy, appears on none of the checks written. McCarthy wrote checks from his personal PNC Bank checking account to Baker’s Hill and wrote checks from Baker’s Hill’s Harford Bank account to Willard Megonigal. His other LLC, the plaintiff in the lawsuit, has no role in any transaction.
The entire lawsuit was without merit and amounted little more than a scam by McCarthy to recoup his money.
In his efforts to save political face and commit fraud to shirk his debts, County Executive Alan McCarthy has broken charter laws and violated the Clean Hands doctrine. During his term as County Executive, he continues to collect rent as a landlord.
In February 2019, the lawsuit against Baker, Simmons and Emery by Ulysses LLC was dismissed by Judge Colleen Cavanaugh after proof was established that Ulysses had no role in paying the Megonigal Note.
*Copy of court documents can be found here: cecilcounty.news/downloads/McCarthy-Baker.pdf