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Government and People
VI. Narrative of the Events
1. The Agreement
JONES asserted that Mayor WILLIAMS was elected with the support of Reverend TUCKER, who fulfilled his end of the agreement on all four points. With respect to the last item, JONES admitted that he came up with the idea for CACS to seek HUD funds and personally drafted the initial concept. JONES believed HUD would sell foreclosed Federal Housing Administration (FHA) homes to CACS at a discount, whereupon CACS would rehabilitate the homes, identified within certain zip code areas of the District, and sell them at a price affordable to lower-income residents.
Reverend TUCKER was afforded the opportunity to respond to JONES' assertions but elected not to do so. Mayor WILLIAMS conceded that he made numerous promises to supporters as part of his campaign for mayor, but denied participation in any such agreement as JONES described. The Mayor stated:It's not that people who are in my employ could have absolutely no contact with these entities or work with these entities, but rather that in working with them - let's say now in this instance my expectation was you work with the church association and Pastor TUCKER, you work with Joe YELDELL and the prayer breakfast people and this would get done and managed right. But that when it came to any procurements later on, or contemporaneous with that, that that would have absolutely nothing to do with it. And I have never, ever called the procurement office or the personnel office or anybody for anything, let alone any of this. And that is a fact. (WILLIAMS Tr. at 47).
(Id. at 83-84) JONES claimed that WILLIAMS continued to request his assistance and advice on religious affairs after WILLIAMS was sworn into office as Mayor in January 1999. The Mayor also appointed Reverend TUCKER to be Chairman of his Faith Advisory Council. According to Dr. Abdusalam OMER, former Chief of Staff, EOM, Reverend TUCKER became a frequent visitor to the EOM. Douglas FOSTER, then unemployed, became a volunteer in the Office of Religious Affairs, where he began to work on the CACS proposal to buy HUD houses. Although FOSTER, a political and campaign supporter of the Mayor, lobbied aggressively for the position of Religious Affairs Advisor, the Mayor selected Reverend ROBINSON. The Mayor knew that FOSTER was not a minister and did not have Reverend ROBINSON's experience in religious matters. JONES claimed ROBINSON'S selection and TUCKER'S appointment were part of the campaign agreement.
(JONES Tr. at 84-85).VI-34 Thereafter, according to JONES, Dr. OMER and Henry "Sandy" McCALL, JONES' predecessor as Deputy Chief of Staff for External Affairs, facilitated the appointment of FOSTER to a position in District government with the Department of Consumer and Regulatory Affairs (DCRA), where he is currently employed.
2. The Mayor's Faith Based Economic Conference and Prayer Breakfast
According to JONES, the involvement of CACS in the annual Mayor's Prayer breakfast was part and parcel of the agreement between the Mayor and the Reverend TUCKER whereby CACS would spearhead the Mayor's faith-based initiatives. It was to become the first activity of the EOM-CACS faith-based partnership.
According to Reverend ROBINSON, in approximately March 1999, he and the Mayor discussed the concept of expanding the Economic Conference to include the Mayor's Prayer Breakfast. The Mayor did not want the Prayer Breakfast to just be another meet-and-greet opportunity but to be a substantive activity tied to his economic initiatives. He hoped that a joint Economic Conference and Prayer Breakfast would produce some positive economic results for the city. According to ROBINSON, the Mayor did not know much about the prayer breakfast concept, other than the fact that it was held every year and that prominent District citizens got together, prayed and had breakfast. The Mayor's Prayer Breakfast had been in existence since at least the 1970s and Joseph YELDELL, Founder/Director of the Executive Fellowship Group (EFG), assumed responsibility for organizing the event every year. Reverend ROBINSON described him as the "Prayer Breakfast Czar."
The EFG holds itself out to be a non-profit organization that was incorporated in the District in 1978. It is registered to conduct business in the District but is not licensed to solicit donations. According to the United States Internal Revenue Service (IRS), it is not a recognized 501(c)(3) tax-exempt non-profit organization. EFG does not have a Federal Tax Employee Identification Number (EIN). EFG did apply for an EIN via IRS Form SS-4; however, the application could not be processed due to the fact that the EFG failed to list a designated principal officer and/or Social Security Number. Without such a number, EFG cannot obtain an IRS Letter of Determination of its tax-exempt status. As detailed herein, EFG's legal status becomes significant both for donors who may have responded to solicitations under the erroneous impression that contributions to EFG might be taxdeductible, and for EFG itself, which may have mischaracterized the tax status of its income generated by JONES' fundraising.
According to YELDELL, he and the late Herb BARKSDALE founded EFG in 1975 as an "ad hoc" organization of volunteer District government employees who convened annually to plan and attend a local prayer breakfast for the Mayor of the District of Columbia. EFG is an adjunct of the National Fellowship Group that sponsors the annual Presidential Prayer Breakfast. District mayors have routinely supported and attended the annual EFG event. According to a number of interviewees, YELDELL only had sporadic personal involvement with the Prayer Breakfast over the years, but political and civic leaders in the District continued to associate the event with him.
According to Reverend ROBINSON, YELDELL was not invited to participate in the early planning process for the year 2000 event. Personal differences developed between YELDELL and the principals who planned the Mayor's January 1999 Inaugural Prayer Breakfast. Apparently several vendors for this event were paid late or never paid at all. As a result, YELDELL became estranged from the WILLIAMS administration, and Reverends TUCKER and ROBINSON, along with JONES, took it upon themselves to begin to plan for the year 2000 Mayor's Prayer Breakfast. However, ROBINSON stated that YELDELL was instrumental in planning the funeral for the late D.C. Council member Harry THOMAS. Thereafter, the relationship between the Mayor and YELDELL improved and the Mayor eventually invited YELDELL to participate in planning for the year 2000 event. According to YELDELL, in August 1999 Mayor WILLIAMS contacted him and asked him to coordinate the Mayor's Prayer Breakfast 2000 and told him that he would like to have an Economic Conference at the same time. The Mayor told YELDELL that he wanted him to continue to be responsible for the Mayor's Prayer Breakfast due to his experience with previous prayer breakfasts and his ability to raise sufficient funds to pay for the event.
The Mayor advised YELDELL that Reverend TUCKER and CACS would be responsible for organizing and funding the new Economic Conference. Together, these events would be officially known as the Mayor's Faith Based Economic Conference and Prayer Breakfast (hereinafter "the Events"). The Economic Conference was to be a part of the Mayor's neighborhood revitalization initiative; it was designed to foster an economic resurgence in the District's impoverished communities. The Conference was expected to provide a forum in which to discuss this initiative and to garner the social and moral support of the faith-based community.
According to Reverend ROBINSON, YELDELL had previously funded the Mayor's Prayer Breakfast solely through EFG ticket sales and made clear that he was in no need of any financial support from the Reverend TUCKER or CACS. JONES understood YELDELL'S possessory interest in the Prayer Breakfast and was concerned that two strong-willed individuals such as
Reverend TUCKER and YELDELL would not get along together nor work cooperatively to plan the Events. JONES' perception proved to be correct.
From September through December 1999, Mayor WILLIAMS, Dr. OMER, JONES, Reverend TUCKER, YELDELL and Sterling TUCKER attended a number of meetings to plan the Events. During the course of these meetings, it became clear to everyone that the rivalry and tension between Reverend TUCKER and YELDELL, particularly concerning funding issues, was making it difficult to move forward. Dr. OMER stated that he reached a point where it became too frustrating and time consuming for him to continuously meet with these individuals and he left it to JONES to attend planning meetings at his behest. Reverends TUCKER and ROBINSON stated that YELDELL became impossible to work with.
According to JONES, it was at this time that Mayor WILLIAMS asked JONES to take a more active role to coordinate and plan the Events, to keep track of the finances and to keep Reverend TUCKER and YELDELL cooperative and organized. Mayor WILLIAMS wanted JONES to resolve any conflicts between these two supporters of the Mayor's economic and faith-based initiatives. By a combination of instructions from the Mayor and the necessity of the circumstances, JONES realized that he would have to become more involved in planning the Events in order to keep Reverend TUCKER and YELDELL in line and to ensure that the Events were properly funded and all expenses covered.
According to JONES, in approximately August 1999, at one of the early planning meetings, the Mayor asked him to be the "treasurer" of the Economic Conference to ensure the proper accounting of all funds. Mayor WILLIAMS and Dr. OMER have no recollection of asking JONES to be the treasurer of the event or any other CACS/EFG activity. Further, both Mayor WILLIAMS and Dr. OMER deny having any knowledge of JONES' direct role in controlling event financing. Dr. OMER claimed to have recognized the conflict of interest this would create for JONES:
[He] was the treasurer of the - of the church fund? I was never aware of that. And he was not supposed to be. And more importantly I never, never, never knew that Mark was part of . . . any of this organization [CACS]. And if he was, it was his responsibility to - to exclude himself from these discussions [fundraising] because you cannot be a member of this and be working for the government of the District of Columbia.
(Dr. OMER Tr. at 30, 33-34) In any event, JONES did become treasurer of sorts for both events, as explained below. He became actively involved in coordinating the development of the Events when he left the employ of the DCLB in April 2000 and began working for the Mayor as Deputy Chief of Staff for External Affairs. The more he became involved in the finances of the CACS/EFG events, the more it appeared as if he was running a private enterprise from his position as District government employee. JONES vehemently asserted that he was only following the instructions of the Mayor and Dr. OMER and that he routinely apprised them of his activities, to include fundraising efforts, as well as the identity of donors and the value of donations. The Mayor and Dr. OMER claim to have given JONES general instructions to ensure that the Events were a success, but did not know the details of his efforts, the degree of coordination, or the fact that he was engaged in fundraising.
Numerous past and present EOM employees were interviewed on this point. Some individuals gave credence to the recollections of Dr. OMER and Mayor WILLIAMS; others supported JONES' understanding of his duties. For example, Lydia SERMONS-WARD, former Director of Communications, EOM, from February 2000 through May 2001 advised that she walked into JONES office on numerous occasions and clearly heard him on the telephone soliciting funds from corporations. When she heard the nature of the conversations, she would leave JONES' office. Thomas TUCKER, former Special Assistant to JONES, told her that he made calls to raise funds for the Mayor's Christmas Party and the Clarence VINSON reception. She also recalled seeing corporate checks on JONES' desk. It was her understanding that it was JONES' responsibility to raise funds for events and she was aware that he raised funds for the Mayor's Christmas Party, the Mayor's Prayer Breakfast, the receptions at the Democratic National Convention and for a reception for VINSON, a local boxer.
SERMONS-WARD also indicated that she attended weekly EOM meetings where fundraising was discussed. The Mayor or Dr. OMER would ask JONES how he was doing raising funds for a particular event and who had been contacted. JONES might respond that he believed they were short, say $5,000. Names of potential donors would then be brought up as suggestions for JONES to contact for additional financial support. At other EOM meetings, SERMONS-WARD recalled JONES mentioning vaguely that he had contacted Comcast, Washington Gas, Potomac Electric Power Company (Pepco) and that he was working on them. On a couple of occasions JONES would begin to go into details concerning these contacts and someone would stop him from discussing these details at the meetings. JONES would then comment that he would discuss the results of his contacts later with Dr. OMER.
There is no disagreement over the fact that there were numerous weekly meetings to discuss these events and JONES' other partnership and fundraising activities. Dr. OMER and Mayor WILLIAMS had the means and opportunity to know what JONES was doing if they cared to inquire. JONES asserted that he was authorized to engage in fundraising, coordination and planning for the Events, and that these activities were part of his job as Deputy Chief of Staff for External Affairs. He claimed to have routinely reported his activities to Dr. OMER and Mayor WILLIAMS and to have had his authority confirmed by their instructions and acquiescence to his work. JONES cited one e-mail to support this proposition. (Ex. CACS. 1) This e-mail was recorded in the Red Book, a form of briefing book for the Mayor on agency activities and development. JONES stated there were other communications in the Red Book to support his contention. The Red Book has been reviewed, as have relevant e-mails of certain EOM employees; they contain no additional documentation to shed light on this issue.
In hindsight, Dr. OMER conceded that he should have supervised JONES' activities more closely. Dr. OMER recognized that as Chief of Staff he bore ultimate responsibility for any violations of the Standards of Conduct on the part of his employees. Dr. OMER was cautious in his dealings with JONES. He knew JONES was a friend of the Mayor and had direct access to him. Dr. OMER observed that there was always a line of prominent civic and religious individuals in JONES' office waiting to meet with him. The Mayor, for his part, asserted that he expected Dr. OMER, JONES and other executives in the EOM to perform their duties properly and ethically. He believed they were personally responsible for obtaining the ethics or legal advice they needed to perform their duties. To the extent they did not obtain proper guidance and engaged in violations of the Standards of Conduct or law, they let the Mayor down.
3. Fundraising for the Events
According to Reverend TUCKER, in September 1999, he and Mayor WILLIAMS met to discuss how these events would be funded. Timothy COUGHLIN, President, RIGGS National Holding Company, Washington, D.C., told the Mayor that he would, through the auspices of RIGGS Bank, lead a corporate fundraising initiative for the Events.
According to Russell SIMMONS, Senior Vice President, RIGGS Bank, the bank became involved with these events in January or February of 2000 when Reverend TUCKER approached COUGHLIN and SIMMONS on behalf of Mayor WILLIAMS and asked them if RIGGS Bank would provide corporate sponsorship for the Events. These RIGGS Bank officials agreed to facilitate fundraising through corporate donations. SIMMONS knew the Reverend TUCKER from his own personal community service activities. SIMMONS stated that he and COUGHLIN, on behalf of RIGGS Bank, had a preexisting business relationship with potential corporate donors and were experienced fundraisers. With respect to helping the Mayor and Reverend TUCKER in this instance, SIMMONS stated, "That's how it works and I saw nothing wrong with it." (SIMMONS MOI at 1)
COUGHLIN stated that donors were selected from RIGGS Bank's internal list of corporate partners and from a directory of corporations that do business in the District that he obtained from the Board of Trade. RIGGS Bank conducted all the corporate soliciting through letters written on RIGGS Bank letterhead stationery sent out to potential donors from RIGGS Bank. SIMMONS asserted that RIGGS Bank had no access to any contact list belonging to the District government or anyone else; he did not know whether JONES or the Reverend TUCKER conducted their own solicitations. COUGHLIN stated that RIGGS Bank circulated approximately 300 to 400 letters to their corporate partners in the District requesting donations or sponsorship of the Events. The letters identified CACS as a non-profit organization in partnership with the District government raising funds for the Mayor's Prayer Breakfast and Economic Conference and stated that donations in the amount of $2,500 through $10,000 would be rewarded with a table for up to ten patrons: The letters requested that all checks be made payable to "CACS-Mayor's Prayer Breakfast." (Ex. CACS. 2)
SIMMONS was aware that a checking account, or Conference Account, was opened for the purpose of depositing donations. SIMMONS knew JONES and the Reverend TUCKER were co-signatories on the account and that they handled all disbursements from the account. SIMMONS communicated almost exclusively with the Reverend TUCKER and had very little contact with JONES. SIMMONS stated that he did not monitor the account because the CPA firm of Thompson, Cobb, Bazilio and Associates was hired to perform this function. SIMMONS further stated that at some point in the planning process YELDELL and other representatives from the EFG came into the picture and assumed the principal role of coordinating the Mayor's Prayer Breakfast event. SIMMONS knew that there was an EFG bank account for this purpose; he believed YELDELL and JONES were the custodians for this account.
With respect to the logistics of planning for the Events, Reverend TUCKER enlisted the consulting services of Sterling TUCKER. Sterling TUCKER arranged for a private firm, Wonder Works Consulting, to help with daily event preparation. Wonder Works Consulting was a company owned by Dorothy "Dottie" WADE, a retired DCLB employee. She then hired four employees to assist with this new contract. Sterling TUCKER made arrangements with Dr. OMER and JONES to have the Wonder Works Consulting staff work directly out of the EOM's Office of Religious Affairs at 441 4th Street, N.W. The staff was provided with District government office space, computers, telephones, supplies and other miscellaneous resources.
There are no records available from which to determine the cost of these services. The services of Wonder Works Consulting might have cost more if it had to incur additional overhead expenses at an offsite location. Sterling TUCKER claimed that if Sterling Tucker Consulting Services, Inc., was hired, planning for these events would have cost a lot more money. However, JONES insisted that Wonder Works Consulting was overpaid. He believed that services performed by this company could have been performed by volunteers, as had been the case in the past.
Both Reverend ROBINSON and Dr. OMER stated that the EOM maintained a long tradition of utilizing volunteers to work on EOM projects and of supporting their work with District government resources. Dr. OMER expressed a concern with this practice, but found it hard to ween the EOM of along-standing tradition. Consequently, no one at the EOM seemed concerned that Sterling TUCKER arranged for Wonder Works Consulting staff to move into EOM office space to work on developing the Events, albeit as paid consultants rather than as volunteers.
The consultants hired by WADE were paid a total of $31,000 through the CACS Conference Account. Curiously, WADE and her employees all received their IRS Miscellaneous Income Form 1099 from CACS, rather than from their direct employer, Wonder Works Consulting. Although it appears as if Wonder Works Consulting was a subcontractor to CACS, there are no contract or subcontract documents to support this possible relationship. This raises a concern as to the propriety of this action and the tax implications to CACS. JONES claimed he voiced this concern about Wonder Works Consulting to Dr. OMER, but that nothing was done about it.
JONES advised that when he received one of the Wonder Works Consulting invoices, he was reluctant to approve it for payment. He states that Sterling TUCKER or Reverend TUCKER then called Dr. OMER, complaining about JONES. Dr. OMER then discussed the complaint with JONES, inquired as to whether there were funds available to pay Wonder Works Consulting and, having confirmed that there were sufficient funds, instructed JONES to just pay the bill. JONES cited this incident as an example of the difficulties and frustrations he experienced coordinating the Events and as an illustration of JONES' assertion that Dr. OMER had detailed knowledge and control of his activities. Dr. OMER denies ever getting such a telephone call or ever telling JONES which bills to pay or not to pay.
In December 1999, Reverend TUCKER and JONES opened the CACS Conference Account checking account at RIGGS Bank for the purpose of depositing the corporate donations being raised by COUGHLIN and SIMMONS and for paying expenses. JONES and Reverend TUCKER had cosignatory authority for this account. The records for this account identify Reverend TUCKER as Chairman and CEO of CACS and JONES as CACS "Treasurer." In fact, JONES was never more than an unofficial finance coordinator for the Events. The title of treasurer did no more than convey to everyone involved that JONES was in charge of finances. The Standard Operations Policies and Procedures for CACS mandated that all checks negotiated from CACS accounts have the signatures of the chairman and treasurer. Consequently, as a matter of form, someone had to be listed as treasurer for the Conference Account because this new account fell within the requirements of CACS policies and procedures.
In late January or early February 2000, YELDELL and members of the EFG began meeting and coordinating the Mayor's Prayer Breakfast as a separate event. They anticipated raising approximately $75,000 from ticket sales, with tickets costing $25 each. These meetings were held bi-weekly, at the office of Craig KIRBY, Deputy Director, Office of Emergency Services (OES), 2002 14th St., N.W. KIRBY made arrangements for EFG to use the OES Conference Room. KIRBY stated that it made sense to have the meetings at this District government location because OES needed to be part of the planning phase of the Events. KIRBY explained that OES is responsible for the Mayor's security and for tracking his activities at such events. KIRBY claimed that the meetings took place during the lunch hour period of the day and that they were used to discuss scheduling, programming, guest lists, and ticket sale proceeds.
There are no records available to identify the District government employees who may have attended these meetings. KIRBY remembered that JONES attended several of the meetings. He also remembered that ticket sale proceeds were collected at the last meeting, a week before the Events. To KIRBY's knowledge, all ticket sale proceeds collected prior to this time were collected elsewhere and went to EFG. Some individuals who wished to attend both events forwarded their nominal $10 registration fee for the Economic Conference and $25 fee for the Prayer Breakfast to their agency representatives or to YELDELL and this money was brought to the weekly meetings.
Witnesses advised that other checks for the registration fee and breakfast were collected by Reverend TUCKER, Reverend ROBINSON, Wonder Works Consulting employees, JONES and FOSTER, and then commingled in the CACS Conference Account. FOSTER stated that he began recording them on a spreadsheet and then either he or JONES would deposit them into the account. JONES, however, denied making any deposits. Checks written to CACS by the corporate donors pursuant to the RIGGS Bank solicitation letters were mailed directlyo CACS at 710 Randolph St., N.W. These funds were deposited by Reverend TUCKER or the Wonder Works Consulting employees.
On March 3, 2000, the first corporate donations were credited to the Conference Account. The attached table identifies all corporate donors, who are listed as sponsors, many of whom do business with or are regulated by the District government. (Ex. CACS. 3)
As the date of the Events approached, proceeds raised from ticket sales were not sufficient to pay for the Events. YELDELL complained that CACS donors were being allotted a number of preferred tables in excess of the donors' apportioned contribution to the Events. When interviewed, YELDELL claimed that he was unaware that checks payable to EFG for the Prayer Breakfast were being deposited into the CACS Conference Account. Thereafter, he confronted JONES and told him that there was no reason why Reverend TUCKER should have any of his money. JONES claimed he mediated several hostile meetings and explained to YELDELL that EFG did not have a Conference Account to deposit checks made out to EFG. JONES recollected that they eventually reached an agreement whereby some of the donations coming into CACS, approximately forty percent, would be reassigned, or transferred, to EFG.
On April 6, 2000, YELDELL and JONES opened an EFG checking account with the Industrial Bank of Washington (IBW). This account was intended solely for the purpose of depositing funds raised and collected from the sale of tickets for the Mayor's Prayer Breakfast. JONES is designated as EFG "Treasurer" and the account's tax number bears JONES' Social SecurityNumber. JONES and YELDELL are co-signatories on the account. JONES also opened a For The Kids Foundation (FTK) checking account at this same time at IBW. Shortly thereafter, he deposited four $250 checks drafted to EFG from corporate donors to the Events into the FTK account. As detailed elsewhere in this report, JONES intended FTK to be a 501(c)(3) non-profit entity; however, as with EFG, he never followed up on the legal requirements and never obtained the proper IRS tax-exempt status. As was the case with CACS, JONES was never an official treasurer of any organization affiliated with EFG.
At this point, JONES became financially responsible for three accounts; EFG, CACS and FTK, and was able to move money among them such that they were, in JONES' words, "seamless." At least with respect to these four donations of $250, not only were the donors deceived but these funds, intended for a 501(c)(3) non-profit organizational activity (CACS), were made payable to an organization that was not a 501(c)(3) (EFG), and diverted to yet another non-profit (FTK) that was also not a 501(c)(3) tax-exempt organization. JONES' conduct in this regard may have created tax implications for both the donors and the organizations. YELDELL and Reverend TUCKER abdicated any responsibility they may have had over the two event accounts because of their belief that Mayor WILLIAMS assigned funding responsibility to JONES.
On April 13, 2000, JONES transferred $22,000 from the CACS Conference Account to the EFG Conference Account. JONES explained that he purposely moved money between accounts to ensure the availability of funds to pay expenses and to apportion receipts and expenditures per the agreement with YELDELL and Reverend TUCKER. YELDELL claimed that he did not confront JONES about this transaction because he had no idea what JONES was doing with the account.
FOSTER also attended EFG Prayer Breakfast meetings at the OES. At this time he was' Special Assistant to the Administrator, Building and Land Regulations Administration, DCRA. FOSTER claimed that he had been involved with promoting the Prayer Breakfast since 1995 through his affiliation with EFG. According to FOSTER, each District government agency has a representative whose responsibility is to help promote the event. FOSTER claimed that he never conducted EFG business during business hours.
FOSTER met JONES through his affiliation with YELDELL and EFG. He stated that at one of the OES meetings, JONES asked him if he would assist with the bookkeeping for donations and ticket sales for the Events. JONES led him to believe he (JONES) was treasurer for both the CACS and EFG bank accounts. FOSTER claimed he only recorded the checks and had no check writing authority or other fiduciary responsibility with respect to the CACS Conference Account. JONES would periodically provide him with checks to be deposited into the account. He would then record the checks before returning them to JONES for deposit. JONES claimed he never made any deposits or handled any of the deposits. JONES asserted that FOSTER took the donations from the employees of Wonder Works Consulting and deposited them into either the EFG or CACS Conference Accounts. This is one of the many points where JONES and FOSTER disagree as to responsibility for CACS Conference Account finances.
On April 10, 2000, Mayor WILLIAMS appointed JONES Deputy Chief of Staff for External Affairs. Mayor WILLIAMS stated that JONES' responsibilities included communication with the private sector in order to promote shared aims of the District government, business community and non-profit organizations. The Mayor expected JONES to use the discretion associated with his executive position, but that, "[I]n certain situations to seek dollars from nonprofits and businesses to help further . . . public purpose objectives." (WILLIAMS Tr. at 27) JONES believed it was his responsibility to handle all the external business of the EOM, to include liaison with all non-profits, corporations, minority businesses and the faith community. He believed this responsibility included coordinating partnership events. JONES' official position description did not mention such duties.
JONES explained that he had learned from the Millennium Washington events and from other EOM activities that delegated work would not always be completed correctly or in a timely manner. He would then have to become personally involved in order to straighten things out. Consequently, and of necessity, he found himself involved in the details of coordinating partnership events, to include financing, in order to ensure that the expectations of the Mayor and the instructions of Dr. OMER were carried out. In any event, no one in the EOM carefully monitored JONES to ensure that his activities were in accordance with the Standards of Conduct. At this time, no one in the EOM was receiving any ethics training.
However, JONES asserted that Dr. OMER and McCALL did provide him with the information he needed to manage partnerships and engage in fundraising. Specifically, JONES claims that McCALL gave him the fundraising "template" (see Millennium Washington narrative) and silent mission of the EOM for the person in his position to set up and fund all the Mayor's civic initiatives. Consequently, he believed that his work on behalf of the Events was part of his official responsibilities. As the Millennium Washington narrative evidences, McCALL believed this template involved McCALL actively raising funds himself. Curiously, JONES claimed not to have personally solicited, nor to have collected or taken possession of any funds that were solicited, although these were activities inimical to the template. The investigation has proven, however, that JONES did solicit funds, did take possession of donations and did control the use of donated funds.
The OIG's analysis of the CACS and EFG conference accounts determined that the CACS account received $130,580 in donations. The EFG account received $31,625 in donated funds, which included $22,000 transferred from the CACS account to the EFG account. Twenty-nine corporate sponsors donated a total of $100,000, entitling them to 29 complimentary tables.
4. The EventsOn April 14, 2000, approximately 1,850 individuals attended the Events at the Washington Hilton and Towers. The total bill for the Events was $79,000. The Mayor's Prayer Breakfast and Economic Conference were apportioned approximately $61,000 and $18,000, respectively, as their share of the costs. This left approximately $50,000 in additional income to pay for expenses associated with the Events, such as $31,000 for Wonder Works Consulting services, travel expenses for distinguished guests, such as the Reverend Floyd FLAKE of New York City, and overnight hotel accommodations for the Mayor at the Washington Hilton and Towers. According to the agreement between YELDELL and Reverend TUCKER, they were each responsible for the costs associated with their events but they relinquished total financial responsibility to JONES.
By April 2001, the EFG and CACS Conference Accounts had a balance of $1,400 and $200 respectively. The Washington Hilton and Towers was never fully paid, and there remains an outstanding bill of approximately $7,500. The accounting firm originally hired to provide accounting services only kept a ledger sheet and was never requested to provide a final accounting, audit, or report. As with the case of Millennium Washington, JONES ignored these event expenses, seemingly without a concern that there was no money left to pay vendors.
The Mayor's Prayer Breakfast event itself was extremely disorganized. It began an hour late, much to the chagrin of the Mayor and other attendees. Although many donors had reserved tables, individuals began sitting in any available seat. The guests of the sponsors who had paid thousands of dollars to purchase seats at reserved tables were upset when they could not find a seat. YELDELL and his staff arrived late and EFG was of no help getting guests seated. Eventually, EOM staff on site to help organize the event allowed individuals free admittance. Some individuals attended and claimed to have paid in cash. No one claimed to have received any cash and there was only one small deposit ($1,000) made to either account that could possibly have accounted for tickets sold at the door.
Based on an analysis of available records, it appears as if 1,168 individual seats to the Prayer Breakfast were accounted for via personal check or corporate donation. However, according to the records of the Washington Hilton and Towers, they served 1,850 breakfasts and billed EFG accordingly in the amount of $41,625 (1,850 meals @ $22.50 per meal). Assuming these figures to be correct, a total of 682 patrons would have paid at the door with cash or personal check, for a total of $17,050. However, there is no corresponding record of this possible income and no equivalent deposit into either the CACS or EFG Conference Accounts.
A number of individuals were interviewed in an effort to determine whether $17,050 was collected at the door and, if so, what happened to the money. JONES, YELDELL and ROBINSON have no knowledge of any cash or checks being collected at the door. Thomas TUCKER, JONES' assistant, claims that he witnessed WADE counting money and checks in a room at the hotel and that she gave all the money collected at the door to JONES. WADE denied having anything to do with money at the hotel. Both JONES and Reverend ROBINSON said it is conceivable that 682 guests were comprised of senior citizens who received complimentary tickets or those who just entered free during all the confusion. Reverend ROBINSON described the Mayor's Prayer Breakfast as chaotic, disorganized, and a horrible embarrassment.
YELDELL said it was impossible that so many guests would have been allowed to enter free of charge. He conceded that some senior citizens received complimentary tickets, but no more than a few hundred. He stated that if any cash or checks had been collected at the door, JONES would have been responsible for this activity and would know where the money is located. He did not believe any tickets were sold at the door and no one was responsible for recording a head count for the Events. It was brought to YELDELL's attention that EFG appeared to have raised approximately $10,000 for the Mayor's Prayer Breakfast. YELDELL responded that he knew EFG raised more money than that. He could not explain why JONES would have commingled income between the EFG and CACS accounts and concluded: "A lot of money is missing, and all the money was given to JONES to deposit." (YELDELL MOI, July 31, 2001 at 3) YELDELL did not want to accuse JONES of stealing any money but he pointed out that only JONES would know the whereabouts of all the money raised for the Events.
JONES remembered that there were guests at the Events with cash and checks in hand but no one to assist them. JONES did not know what to tell the guests. YELDELL came late and by this time YELDELL and Reverend TUCKER were not communicating with each other. JONES claimed it was not his responsibility to collect money at the door and knew nothing about any cash or checks that might have been collected at the door.
Unfortunately, this investigation has not been able to resolve this financial discrepancy, and it is unclear whether any money intended for the Events was diverted elsewhere or misappropriated. This was not the sole or last financial irregularity associated with these events.
5. Post Event Use of the CACS Conference AccountThe most disturbing of all the developments surrounding the Events was the fact that JONES continued to raise funds many months after the Events had concluded and began to use the two Conference Accounts to pay for activities wholly unrelated to the Events. JONES stated that it was his understanding that he could use the CACS Conference Account to pay for other faithbased initiative expenses. JONES defended his post event use of the CACS Conference Account as something that the Mayor was aware of and that was justified as part of the so-called agreement between the Mayor and Reverend TUCKER. To JONES, the EOM was a partner with CACS in accordance with the Mayor's faith-based and economic revitalization initiatives. When he opened the CACS Conference Account, he fully expected it to evolve after the Events and to serve as a funding vehicle for other faith-based partnership activities.
Neither the Mayor nor Reverend TUCKER supported this perception. For his part, the Mayor claimed to have no knowledge of JONES' use or control of the account and was unaware that the hotel bill remains partially unpaid at this late date. Reverend TUCKER conceded that he abdicated responsibility for the account to JONES, although they were both legally obligated to cosign all checks. Reverend TUCKER was confronted with the details of some unusual CACS Conference Account expenditures and commented that he was under a lot of pressure from JONES. He recognized JONES to be an important District government official who could derail CACS' housing rehabilitation initiatives if he chose. Reverend TUCKER was not in a position to challenge JONES, did not monitor income and expenses and did not ensure that JONES only spent money for legitimate event expenses. He admitted that he sometimes signed blank checks and believed that JONES lied to him with respect to the purpose for some of the expense checks.
JONES, for his part, asserted that Reverend TUCKER was kept advised of all expenditures and knew the purpose of every check because Reverend TUCKER had to sign every check. JONES denied deceiving Reverend TUCKER about any purpose for any expenditure from the Conference Account. JONES further stated that the Conference Account evolved into a general use account for all faith-based expenses associated with the EOM. It was JONES' understanding that his approach to the use of funds solicited and accepted for particular purposes was justified because: 1) there were no District government funds involved 2) no money was diverted to anyone's personal use; and 3) all account activity was for a public benefit.
JONES stated under oath during the course of the Office of Campaign Finance (OCF) investigation that he did not engage in fundraising. This is incorrect. At one point he stated, "Money never came to me," and "I don't recall anyone giving me a check." ("In the Matter of Mark Jones,, Deputy Chief of Staff, Office of the Mayor," Docket No. PI 2001-101, Office of Campaign Finance, D.C. Board of Elections and Ethics, April 20, 2001, Tr. at 14) At another point in the interview he was asked whether he solicited from businesses, and he replied, "I don't recall, I may or may not have. Again my job was to coordinate the activities with the fundraiser, so many of the calls were made by other people." Id. at 19. He was then asked if calls made by other people were at his direction and he replied, "No." Id.
When JONES was interviewed by the OIG, he was confronted with numerous instances of his personal fundraising, as well as that of EOM employees at his direction, at which time he qualified his earlier testimony. He claimed that his response to the OCF inquiry was to specific questions about specific events and was not intended to apply to fundraising in general. JONES did admit to the OIG, however, that he engaged in fundraising on numerous occasions, but made clear that he thought such activity was part of his duties and was well-known both by Dr. OMER and the Mayor.
a. The Payments to Caroline Parrish
Since the beginning of the Mayor WILLIAMS administration, Caroline PARRISH, an elderly woman in her 80s, provided transportation for the Mayor's mother, Virginia WILLIAMS, by driving her around town on a volunteer basis. Mayor WILLIAMS knew that PARRISH was assisting his mother in this regard. He understood that his mother frequently attended civic events as his representative, and claimed that the District's citizens love his mother and enjoyed having her come to their neighborhood functions. He believed that she provided a service to the EOM as an official representative of the Mayor.
According to Dr. OMER, PARRISH began coming to the EOM in March or April of 2000, wandering the halls and complaining that she should be paid for her services. She confronted Dr. OMER and demanded compensation. Neither Dr. OMER nor JONES wanted to bring this issue to the Mayor's attention. They hoped to resolve it without bothering the Mayor. Dr. OMER made arrangements with the Office of Finance to have PARRISH paid as a consultant to the EOM and had a $2,000 District government check prepared and made payable to her. When he gave her the check she threw it back at him, believing the value of her services far exceeded this amount. Dr. OMER stated that, in hindsight, he was glad she did this since he was not comfortable with the method he was using to compensate her.
According to JONES, Dr. OMER tasked him to find a way to pay PARRISH and to keep her quiet. JONES admitted that he solicited funds from H.R. CRAWFORD, former D.C. Council member, former HUD official, local real estate developer, and neighbor of PARRISH, who donated $1,500 to CACS in August 2000 and $500 to EFG in December 2000. CRAWFORD advised that he knew that his donations were to support PARRISH. He specifically remembered being contacted by JONES and by Louise "Lucy" YOUNG, a contract employee and assistant to JONES, for these donations and for instructions on drafting the checks.
On April 17, 2000, JONES wrote a check to PARRISH for $2,000 on the CACS Conference Account, noting on the check that it was for transportation. Reverend TUCKER advised that JONES told him that PARRISH drove the Mayor's mother to the Events and this fact justified using CACS Conference Account money to compensate the driver. Reverend TUCKER, as was his habit, did not question the expenditure. PARRISH received another payment of $500 written on the FTK account in January 2001. FTK, as described elsewhere in this report, was another non-profit entity created by JONES, ostensibly to provide quality-of-life services for impoverished youth in the District, but actually used as a funding vehicle for a variety of civic activities that the EOM supported.
The Mayor, for his part, was embarrassed by the entire PARRISH incident. At some point he remembered asking Dr. OMER to try and find a way to compensate PARRISH for all the time she spent assisting his mother but not to use District government funds. He claimed that he was not aware that JONES raised the money by soliciting CRAWFORD or that PARRISH received a check from the CACS Conference Account.
Basically my people would not have paid Miss PARRISH unless I said, you, know, we should help Miss PARRISH. And there were two things at work here. One is that Miss PARRISH was driving my mother around to help her fulfill her - they're not obligations - but her general responsibilities as a first mother of the city . . . . I just simply wanted to provide her some reimbursement . . . . [I]t's got to be okay to reimburse someone for driving my mother , to meet her responsibilities where there's a public purpose and it's not giving my mother money or me money or driving my mother to like Hecht's or something . . . . And then, number two . . . Miss PARRISH, you know, had her own financial difficulties. And, you know, when you're mayor, you're in the habit with the constituency service fund and with the emergency funds that are set up in the government . . . someone [is] hurting. They're financially distressed. You know, are you going to give them $500 or $1,000. And so there was also this motivation.
(WILLIAMS Tr. at 55-56) Mayor WILLIAMS was queried as to whether he knew exactly how PARRISH was paid. He replied that he expected Dr. OMER would see to it that she was reimbursed in a way that was appropriate but, despite his awareness of the Constituent Services Fund, stated that he would never have given PARRISH any money from District funds.
(WILLIAMS Tr. at 59-62) Mayor Williams used the occasion of his discussion of the PARRISH payments to make an observation about the general fundraising activities of his staff:
Well, obviously disclosure - in retrospect disclosure was inadequate. In retrospect, I believe that I had a reasonable belief that the people under me were able to do this - were going to be able to do this right according to all the standards . . . . But in hindsight that's clearly not the case. There wasn't the operations,' there weren't the management controls . . . . There wasn't the third party oversight, segregation of duty, which is fundamental to, you know, financial management and accounting.
(WILLIAMS Tr. at 62-63)
a. Additional Fundraising
After the Events, JONES continued to deposit donations and the proceeds from ticket sales into the CACS Conference Account, from which he paid most of the bills associated with the Events. On August 24, 2000, the account was credited with $960. The deposit was comprised of personal checks written in April for individual tickets to the Events. JONES contended that FOSTER made the deposits; he did not know why the deposits were made 129 days after they were written. FOSTER initially denied making any deposits, until he was confronted with the many deposit slips that were in his handwriting. FOSTER then recanted his denial, but claimed he could not recall any of the deposits or why their negotiation was delayed. This is one of the many instances where FOSTER was not candid.
From April through December 2000 JONES on occasion solicited funds unrelated to the Events and deposited the donations into the CACS Conference Account. At the same time, he began to write checks on the account for expenses unrelated to the Events. This is the period of time when JONES claimed he believed he had some undefined authority from the Mayor and Reverend TUCKER to use the CACS Conference Account to deposit funds solicited for faithbased activities of the EOM.
For example, on August 24, 2000, the same day that FOSTER made the deposit of $960 from the proceeds of event ticket sales, he also deposited two checks totaling $1,000; $500 each from the law firm of Julyan & Julyan and from Jocelyn DUKE. David JULYAN, an attorney and political supporter/adviser to the Mayor, admitted writing one check, which was noted, "Mayor's Picnic." He could not recall why he made the check out to CACS, or even what the acronym stood for. He claimed to have prepared the check at the instructions of JONES or possibly Thomas TUCKER. JONES claimed he solicited money at this time in order to subsidize the cost of transporting senior citizens on CACS buses to a ward picnic. However, there is no evidence that any payment was made to anyone for bus transportation services. One of the Mayor's early ward picnics was poorly attended and the Mayor informed his staff know that in the future he would not tolerate such lack of planning and attendance at community events that he attended. It was JONES' idea to bus senior citizens to future picnics so that the Mayor would be pleased with the turnout. Reverend TUCKER claimed that he did not know that JONES was using money from the Conference Account for this purpose. He stated that CACS had no involvement with the Mayor's ward picnics.
DUKE, a payroll technician at Thompson Cobb, Basilio and Associates (the accounting firm hired by SIMMONS to monitor donations for the Events), admitted writing a personal check to "C-A-C-S." She had never heard of CACS, nor did she know what the acronym stood for. She wrote the check at the request of another Thompson-Cobb employee, who told DUKE that she was asked by a friend, Donald MFUME, to immediately write a check for $500 to CACS. However, she did not have her checkbook with her and asked DUKE to write the check for her as a favor. DUKE agreed to write the check with the understanding that she would immediately receive $500 in cash from her co-worker, as agreed, which the co-worker claimed to have received from MFUME. The co-worker also claimed not to know what CACS stood for; she did not ask MFUME, and he did not tell her:
MFUME, Vice President, Redwood Securities, Washington, D.C., corroborated this account of the Events. He stated that his firm makes several "political" contributions to causes in the District and that he knew JONES through relationslups he had with District government officials. He did not know what CACS stood for and would not confirm that he was solicited or made a donation at JONES' request. Furthermore, he was unable to explain why he would make such a donation through a third party and not take advantage of the tax deduction for a donation to a 501(c)(3) non-profit organization. He also could not explain why the check had to be written that day. MFUME's statement belies good business sense and is not credible.
JONES was not able to provide any specific information on this donation. He admitted that he knew MFUME as part of "our group" of African-American businessmen (Ex. CACS. 4) and did not think it would be unusual for him to contribute to "our causes." (JONES Tr. at 105)
JONES' statement also lacks credibility. These accounts of the DUKE check are an example of the difficulties OIG experienced during the course of this investigation in which so many individuals were not cooperative, were evasive, or were untruthful. For example, FOSTER deposited another $500 check from Tony Cheng's Seafood Restaurant into the CACS Conference Account on August 24, 2000. Tony CHENG, owner of a popular local restaurant, claimed the restaurant check was written by his son and that he could not recall why his son would make a contribution to CACS. CHENG's son was not available to comment.
An CIAO Corporation check in the amount of $1,000 was deposited into the Conference Account during this time period. The investigation determined that Thomas TUCKER solicited this contribution from Tina SCOTT, Vice President of New Business for State and Local Governments, OAO, for the purpose of supporting Mayor WILLIAMS' "Taxation Without Representation" initiative. The written solicitation requested that checks be made out to CACS, which TUCKER identified as the Civic (rather than Church) Association for Community Services. (Ex. CACS. 5)
Thomas TUCKER admitted soliciting a donation from SCOTT (and CHENG) but at the request of JONES, who was looking for ways to obtain financial assistance for District Taxation Without Representation projects at the August 2000 Democratic National Convention in Los Angeles, California. TUCKER claimed the reference to "Civic" to be in error. He could not obtain official CACS letterhead stationery, and JONES told him to just make something up, so he confused "Church" with "Civic." He did not explain why the solicitation letters did not explain that the solicitation was for Taxation Without Representation projects. JONES stated that Thomas TUCKER must have made a mistake because JONES did not instruct him to author or circulate any such letters with "Civic" in the title. He surmised that TUCKER was aggressive in his duties and often engaged in activities without the knowledge and approval of JONES. JONES claimed that this independence ultimately led to TUCKER's termination.
With respect to the discrepancy between the words "Civic" and "Church," we do not believe either Thomas TUCKER or JONES is credible. Other investigative results suggest that some potential corporate donors were not able to donate to a church organization. For example, during this time JONES attempted to solicit $5,000 from Comcast Communications, but was specifically told that the company's charitable contribution rules precluded donations to a church. Consequently, we believe either Thomas TUCKER or JONES devised the idea of telling such donors that the organization was the Civic Association of Community Services. Thomas TUCKER or JONES could then request checks be made payable to "CACS" and JONES could then easily deposit "CACS" checks into the Conference Account. The donors would not know that they had in fact made a donation to a religious non-profit organization.
c. Money for Attendance at the Democratic National Conventioni. The Maya Foster Check
On August 11, 2000, a $2,000 check from the CACS Conference Account was made payable to and negotiated by Maya R. FOSTER, who explained that her husband, Douglas FOSTER, drafted the check and asked her to negotiate it. Her husband approached her with this request after he had several telephone conversations with JONES and Reverend TUCKER. Maya FOSTER could tell from Douglas FOSTER's end of the conversation that JONES was inquiring as to whether there was $5,000 in the Conference Account. FOSTER did not think so, but believed there was $2,000 in the account. FOSTER informed his wife that the money was intended for Mark JONES so that he would have cash to take with him to the Democratic National Convention in Los Angeles. Douglas FOSTER also told his wife that he could not draft a check to himself, since he was the informal bookkeeper for the account. Maya FOSTER advised the OIG that she was reluctant to get involved in this suspicious activity but accompanied her husband to a RIGGS Bank, where she negotiated the check and obtained $2,000 in cash that she gave to her husband. They then drove to 441 4th Street, N.W., during normal business hours when Douglas FOSTER normally works for the District government, where she claimed to have witnessed her husband give $2,000 to JONES in front of 441 4th St. N.W. She provided a perfect description of JONES, someone she had never met before that time.
This check was negotiated the day before JONES was scheduled to travel to Los Angeles. At the time that Maya FOSTER withdrew $2,000, Douglas FOSTER deposited $2,000 into the Conference Account. The deposit consisted of the $1,500 CRAWFORD check, described above, and a check for $500 from Carter & Carter Enterprises, account activity believed to have been initiated in order to pay PARRISH. Dickie CARTER, through his attorney, could not recall the circumstances surrounding the check.
Douglas and Maya FOSTER refused to submit to further interviews without the advice and presence of counsel and with certain assurances concerning the use of their statements. After this request was accommodated by the U.S. Attorney's Office for the District of Columbia, Douglas FOSTER was interviewed under oath and advised that it had been "prearranged" to withdraw $5,000 from the CACS Conference Account for JONES in connection with expenses associated with his trip to the Democratic National Convention (DNC). FOSTER stated that by August 11, 2000, he was not sure the Conference Account contained $5,000, so JONES instructed him to withdraw $2,000 out of the account. Thomas TUCKER called FOSTER at work, on JONES' behalf, and requested the money. It was FOSTER's idea to make the check payable to his wife and have her cash it. He met his wife in Silver Spring, Maryland, and together they proceeded to Reverend TUCKER's office at the First Baptist Church, N.W., where Reverend TUCKER cosigned the check. FOSTER and his wife then drove to a RIGGS Bank branch on Georgia Avenue, N.W., where she negotiated the check for cash.
Reverend TUCKER advised that Douglas FOSTER informed him that the check was for Caroline PARRISH and that JONES wanted to receive the money immediately: FOSTER further told Reverend TUCKER that JONES had raised sufficient funds to replace the $2,000 and showed Reverend TUCKER the CARTER and CRAWFORD checks. FOSTER claimed that he then took the $2,000 to Thomas TUCKER at TUCKER's office at 441 4th St., N.W., but did not have any conversation with JONES. Telephone toll records indicate that FOSTER used his cell telephone to call JONES' direct line immediately after leaving the RIGGS Bank with the cash. This is another instance where FOSTER's statements are not credible. In another instance, he denied depositing the CARTER and CRAWFORD checks into the CACS Conference Account, but recanted when he was confronted with the deposit slip bearing his handwriting.
FOSTER also claimed that he called JONES on June 8, 2001, after his wife had been interviewed, and argued with him about involving his wife in this OIG investigation when JONES was the sole beneficiary of the $2,000. JONES told FOSTER that he did not know what he was talking about and had no knowledge of receiving any money from FOSTER. FOSTER, however, contradicting his wife's recollection, insisted that he gave the money to Thomas TUCKER and could not definitively state that JONES actually took possession of the cash.
Maya FOSTER was re-interviewed and this time, provided an account of the Events that was similar to that of her husband. She recanted her original statement whereby she claimed to have witnessed her husband giving the $2,000 cash to JONES and said it may have been someone named TUCKER, although she did not know the difference between Thomas TUCKER and the Reverend TUCKER, nor did she know who they were. She did remember the June 8, 2001, telephone conversation between her husband and JONES where her husband told JONES, that he (JONES) took the money and now he was trying to "get away with this." (Maya FOSTER Tr. at 26; see also Tr. at 27-29)
JONES insisted that he never received any money from FOSTER or Thomas TUCKER. JONES did concede that FOSTER was in possession of CACS Conference Account checks signed by JONES because JONES anticipated that he would need money from the account for faith-based activities at the DNC. JONES stated that money was raised and deposited into the account for that purpose, but he claimed that he never requested or authorized FOSTER to write a check for $2,000 at this time. Thomas TUCKER claimed he never received $2,000 from FOSTER.
The OIG made every effort to determine the ultimate destination of this $2,000. Thomas TUCKER asserted that JONES would have immediately fired him if he took money from the Conference Account without JONES' knowledge. As Conference Account bookkeeper, FOSTER had numerous opportunities to embezzle money from the account in a less obvious manner if he so desired. The weight of the evidence on this issue supports Maya FOSTER's first statement, which she provided at a time before she had the opportunity to consult with her husband. A review of JONES' personal financial records indicated that his only traceable expense at this time was the use of his personal credit card to pay for his hotel room at the convention. Thomas TUCKER stated that JONES probably used the money to help defray expenses of the District's delegation to the convention. District delegates and other District officials who attended the convention were interviewed; no one was aware of JONES having the need to spend $2,000 on convention related activities. Consequently, and based on a preponderance of the evidence, we are only able to conclude that JONES instructed Douglas FOSTER to withdraw $2,000 from the Conference Account, which JONES then used to help defray unknown expenses associated with his attendance at the Convention.
Reverend TUCKER was asked why he would authorize a check to Maya FOSTER, someone he did not know, after Douglas FOSTER told him the money was for PARRISH. He stated that he was placed under "tremendous pressure" from JONES, who was constantly using the Conference Account for unusual or unexplained purposes. (TUCKER MOI at 6) Reverend TUCKER stated that JONES would constantly imply that he could, due to the proximity of his relationship with the Mayor, "derail" the CACS - District government projects involving neighborhood revitalization if Reverend TUCKER was not going to be a "team player." Reverend TUCKER believed JONES' continued use of the Conference Account long after the Events took place to be a form of extortion. JONES is emphatic in his assertion that he never extorted or pressured Reverend TUCKER, that he did not have the power to interfere with any of CACS' private activities, and that Reverend TUCKER knew it. JONES claimed that Reverend TUCKER knew the Conference Account was being used for general faith-based activities.
JONES was asked during one of his interviews exactly what District-related activities he participated in at the convention. He explained that he helped organize volunteer high school students to hand out pamphlets describing the Taxation Without Representation initiative at the convention hotels and to get delegates to sign petitions. He did not mention any faith-based activity. Upon re-interview, however, he was specifically asked why he thought his attendance at the convention had a faith-based connection. At this time JONES stated that he vaguely recalled attending a few faith-based workshops, but did not exactly remember which ones, their topics or anything else about them.
ii. The DaMoor Travel Agency Check
Witness interviews and the review of relevant records confirm that JONES was soliciting funds prior to August 2000 for the CACS Conference Account with the understanding that approximately $5,000 would be spent on the travel expenses of EOM staff planning to go to the convention. Many of the individuals who were solicited for money at this time were given different stories by JONES and Thomas TUCKER as to the purpose of the donations. However, the donations all had one common denominator - they were made to a 501(c)(3) non-profit organization, thereby providing the opportunity for donors to take tax deductions and CACS to declare the income tax-exempt.
Dr. OMER advised that he did not intend to go to the convention, but was instructed to do so at the last moment by the Mayor. Dr. OMER and JONES both knew that the District's delegates and other officials such as the Mayor had sponsors to pay for their travel expenses. JONES expected the CACS Conference Account to defray the expenses for Dr. OMER and other EOM employees. However, the Mayor's wife confirmed that she informed Dr. OMER that all EOM staff would have to pay their own travel expenses, would have to take leave for their time at the Convention and could not be subsidized by a private sponsor. Dr. OMER and JONES both expressed a sense of frustration that they were expected to go to the Convention on their own time and to use their own financial resources despite the fact that they would be engaged in activities on behalf of the Mayor and the District government.
Nevertheless, on August 16, 2000, JONES paid DaMoor Travel Agency $1,203 with a check from the CACS Conference Account for the cost of airtine tickets for himself and Dr. OMER. Dr. OMER claimed that he asked JONES to make his airline reservations at the same time that JONES made his reservations, but did not know how JONES paid for the tickets. Dr. OMER stated that JONES told him he paid for their tickets with his personal credit card. Initially, Dr. OMER did not offer to reimburse JONES and JONES never asked Dr. OMER to reimburse him.
JONES asserted that Dr. OMER knew the source of funds for his airline tickets. JONES stated that the topic of the EOM staff traveling to the convention came up frequently at EOM staff meetings and everyone knew that JONES was going to get CACS to subsidize, or sponsor, travel expenses. Reverend TUCKER, who endorsed the check to DaMoor Travel Agency, claimed that he did not know that JONES used the funds to travel to the convention. He stated that JONES presented the check to him but did not supply any information as to its purpose. He just assumed it related to the Events. Once again, JONES refuted Reverend TUCKER. JONES claimed that Reverend TUCKER knew that the check was for travel to the convention and that Reverend TUCKER was the one who initially referred JONES to DaMoor Travel Agency. According to JONES, Reverend ROBINSON handled all of the travel arrangements for Dr. OMER and himself.
iii. The Esther Bailey CheckOn August 28, 2000, the CACS Conference Account was debited for $1,607 as a result of a check made payable to the order of Esther BAILEY. BAILEY stated that she is employed part-time as a bookkeeper for CACS, is a friend of Reverend TUCKER and a parishioner at his church. On August 17, 2000, she received an urgent telephone call from Reverend TUCKER asking her to do him a personal favor. He asked her to immediately withdraw funds from her personal checking account and to wire transfer $1,500 to an individual in California who was identified to her as Mark JONES. Reverend TUCKER advised her that JONES was a friend who was at a convention in California and needed the funds immediately. Reverend TUCKER explained that he was out of town at the time and was unable to gain access to his own funds. He told BAILEY that he would reimburse her when he returned to Washington, D.C., which he did with a check from the CACS Conference Account. BAILEY said she complied with this request in good faith and as a favor to her pastor.
On August 17, 2000, JONES received and negotiated two wire transfers in the amount of $1,000 and $500 at Popular Cash Express in Los Angeles California. BAILEY confirmed that these were the two wire transfers she sent to JONES.
JONES conceded that he received these funds. He claimed that Dr. OMER pressured him to come up with some money after they both arrived in Los Angeles and to get it from the so-called reserve fund that JONES had put together to originally pay for the EOM staff's travel expenses. JONES contacted Thomas TUCKER in Washington, D.C., and asked him to help. Either Thomas TUCKER or Reverend ROBINSON contacted Reverend TUCKER, who was out of town attending a family reunion, explained JONES' predicament, and asked for help. Thereafter, Reverend TUCKER contacted BAILEY.
JONES stated that he did not know where the money came from because he did not know BAILEY. He stated that he had trouble at the wire service company because although he knew there was money wired to him, he did not know the identity of the sender. He further stated that he did not instruct Thomas TUCKER to contact the Reverend TUCKER to get the money and that Thomas TUCKER must have done that himself. In view of the close working relationship between Thomas TUCKER, Reverend TUCKER, and JONES, and because JONES controlled the CACS account, JONES denials are not credible.
JONES asserted that he gave 1,500 to Dr. OMER in California. According to Dr. OMER and JONES, Dr. OMER had to leave the convention early, but had trouble getting his return flight canceled and had to pay an exorbitant amount for a one-way return ticket. Dr. OMER was very angry at this development, which is why JONES believed he pressured JONES to get him $1,500. Dr. OMER asserted that he never asked for or received any money from JONES in California. JONES was confronted with Dr. OMER's statement and responded that he could corroborate his assertion that Dr. OMER was not candid with OIG investigators and did take $1,500 from him in California.
iv. The BET on Jazz Restaurant Check
JONES stated that soon after the EOM staff returned from California, a planning meeting was held in his office for the Congressional Black Caucus (CBC) reception scheduled for later that evening, September 13, 2000, at the BET on Jazz Restaurant in the District. JONES claimed that Dr. OMER and Darlene TAYLOR were present at the meeting. The meeting turned to a discussion of how they were going to generate additional funds in the amount of $3,000 to pay the deposit for the reception. JONES stated that Dr. OMER reached into his pocket and took out $1,500 in cash and offered it to JONES stating that he had the $1,500 from the Los Angeles trip. TAYLOR confirmed the fact that Dr. OMER produced $1,500 in cash for the deposit. She stated that the $1,500 was given to Douglas FOSTER who immediately left to deposit the money into the CACS Conference Account. FOSTER than hurriedly located Reverend TUCKER, who was presiding over a funeral at a cemetery, and had him cosign a Conference Account check that was presented to the restaurant as a deposit for the reception. A review of financial records confirms the accuracy of TAYLOR's recollection.
As of February 28, 2001, the Conference Account had a balance of $220.67, but unpaid bills for the April 2000 events of over $7,000. Once again, JONES appears to have just walked away from his financial control over a public-private partnership account without a final accounting but with unfulfilled liability.
6. Post Event Use of the EFG Conference Account
From April through December 2000, JONES was also using the EFG Conference Account, originally intended to be a repository for income from ticket sales for the Mayor's Prayer Breakfast, for purposes unrelated to the Events. For example, $2,500 was deposited into the EFG account on December 20, 2000, (eight months after the Events). The deposit was made with checks written by YOUNG ($300), Theodore FELLS, Jr.. ($200), Crawford Edgewood Managers, Inc. ($500), VCARE Charitable Foundation ($500) and Industrial Bank ($1,000). The VCARE check noted that it was for a Thanksgiving food drive. The Crawford check was to pay PARRISH. On December 29, 2000, $3,700 was deposited into the EFG Conference Account. The deposit consisted of checks from Prince Construction Company, Inc. ($200), Washington Gas & Light Company ($500), Eagle Maintenance Service, Inc. ($1,000), McKissack & McKissack Architects ($1,000) and SunTrust Bank ($1,000).YOUNG, who was a retired DCLB employee, was hired by JONES on a contract basis to be his Special Assistant after Thomas TUCKER left District government employment. She stated that she made a charitable contribution to the Mayor's Holiday Reception, on behalf of her business, High School Skinny. YOUNG further advised that in December 2000, she and JONES solicited a total of $6,200 through EFG. They informed donors that donations were for the Mayor's Holiday Receptions and/or the Mayor's Presidential Inaugural Reception, events described in detail elsewhere in this report.
Two examples are illustrative of JONES' activity with respect to the EFG Account at this late date. Alberto GOMEZ, President of Prince, advised that JONES contacted him for a donation to a children's activity being organized by the Mayor's Office. He agreed to donate $200 and made the check payable to EFG as directed by JONES. He delivered the check personally to JONES at his office at 441 4th St., N.W. YOUNG sent him a thank-you letter. GOMEZ admitted that his company has contracts with the Washington Area Sewer Authority (WASA) and the District's Office of Property Management.
Richard TYNES, President of Eagle Maintenance Co., remembered that someone from the Mayor's Office contacted him and asked for a contribution to the Mayor's Christmas party. TYNES' company has a contract with MCI Center and agreed to make a $1,000 donation as requested by the Mayor's Office.
Numerous interviews of EOM staff have confirmed that JONES and YOUNG worked with informal donor lists that were created in the EOM. The lists consisted of friends, relatives, District contractors, regulated businesses, and prominent business, political and social leaders.
When YELDELL was first interviewed, he was advised that the EFG Conference Account had a $6,200 balance as of January 1, 2001. YELDELL expressed surprise at this fact because he knew that neither he nor JONES was collecting or soliciting money for the 2001 Mayor's Prayer Breakfast at that time of the year. During a subsequent interview, YELDELL advised that he questioned JONES about this balance and that JONES told him that the money was deposited into the EFG account by mistake. JONES transferred the entire amount, via check, to FIX on January 5, 2001.
By January 2001, it became clear that JONES was using both the EFG and CACS Conference Accounts to raise money for activities or expenses he incurred at the behest of the EOM. With respect to CACS, Reverend TUCKER claimed to have been deceived and/or intimidated by JONES in order for JONES to gain control over the Conference Account. With respect to EFG, JONES appeared to have used this account without YELDELL's knowledge. Although JONES claimed to use the CACS Conference Account for authorized faith-based expenses, he had no such excuse for his use of the EFG Conference Account, which had no purpose other than to support the year 2000 Mayor's Prayer Breakfast. Most disturbing, however, is the fact that JONES depleted the EFG and CACS accounts while knowing that the Washington Hilton Hotel was still owed over $7,000 for the April, 6, 2000 Events. He claimed that he became aware of this outstanding liability months after the Events. He believed that all obligations for the Events were satisfied. However, he stated he was very busy and had many responsibilities in his capacity as Deputy Chief of Staff for External Affairs. Consequently, he conceded that he did not ensure that all bills for the Events were in fact paid.
JONES continued to use the EFG account up to January 2001. The last deposit to the account occurred in December 2000 when the account was credited for $6,200 in donations. In January 2001, JONES transferred $6,200 to FTK and paid two event vendors. As of February 28, 2001, the EFG Conference Account contained a balance of $1,459.34.
After the Mayor placed JONES on administrative leave in January 2001, YOUNG sent a package to YELDELL which included a number of donor checks to EFG that had not been negotiated, to include: 1) George Washington University (GWU) ($1,000); 2) PEPCO ($1,000); Riggs Bank ($1,000); and 3) Independence Federal Savings Bank ($1,000 - with the attached memorandum stating "12/29/00 Mark A. Jones, Contribution Inaugural Reception by Mayor"). YOUNG advised that she had discovered the checks in a stack of papers in her office and forwarded them to YELDELL. YOUNG further advised that when JONES became aware of what she had done he became incensed and verbally chastised her for not having sent the checks back to the donors.
Bernard DEMCZUK, Assistant Vice President, Government Relations, GWU, advised that YOUNG called him seeking a contribution to the Mayor's holiday party for foster children. YOUNG instructed DEMCZUK to make his check payable to EFG. He questioned her as to the identity of EFG. YOUNG told DEMCZUK that there was no non-profit established specifically to benefit foster children at that time and EFG was being used for that purpose. On another occasion, DEMCZUK recalled receiving a facsimile from JONES seeking a contribution of $25,000. He disregarded the request due to the amount, but could not recall why JONES solicited this money. DEMCZUK advised that a major part of his duties is to promote GWU's interests with the District and other area local governments. He had attended several District government-related events and stated that he never witnessed any solicitation activity. He added, however, that civic activities sponsored or associated with the District government are always political and are presumed to benefit the incumbent Mayor.
Frederick Douglas, attorney for Ted TRABUE, Manager, District of Columbia Relations, PEPCO, advised that TRABUE personally delivered PEPCO's check to YOUNG. In fact, he signed the guest register at 441 4th St., N.W., and purpose for visit as, "Deliver $." YOUNG remembered communicating with TRABUE regarding a donation for the Mayor's inaugural event. YOUNG confirmed the authenticity of a solicitation letter addressed to TRABUE bearing JONES' signature but in YOUNG's handwriting. (Ex. CACS. 6) YOUNG advised that she was specifically assigned by JONES to assist with the coordination and fundraising for holiday parties. She denied ever receiving or accepting any checks for EFG since she did not work for EFG. JONES stated that YOUNG took it upon herself to solicit funds and described her as aggressive, just like Thomas TUCKER. JONES claimed that YOUNG and Thomas TUCKER were always getting ahead of themselves because they were so independent in their assigned duties, particularly when JONES took a leave of absence to work on Peggy COOPER-CAFRITZ's campaign for the school board election, at which time they were left unsupervised.
7. The $14 Million HUD Faith-Based Housing Award
Reverend TUCKER'S concern about the ability of JONES to derail CACS' housing initiatives was not specific with respect to neighborhood revitalization. However, it appears that he was referring to the CACS initiative to participate in a HUD program, created by Congress three years ago, to sell 50,000 vacant houses nationwide to non-profit groups. According to media reports, interviews and HUD records, CACS intended to purchase, refurbish and sell approximately 300 homes to lower-income residents in the District of Columbia. This HUD homeownership program was a federal faith-based initiative worth upward of $14 million to CACS. However, CACS had no prior real estate development experience and had difficulty meeting the program's participating requirements. HUD denied CACS' application for a $10 miillion grant to help purchase the homes, and DHCD denied a similar application for $2.7 million in funding ($1.7 million revolving loan and a $1 million direct grant). In lieu of these funding sources, CACS obtained private financing, which was sufficient to purchase the first group of homes. Dr. OMER believed the Mayor was asked to write a letter to HUD in support of the CACS application. In July 2001, HUD announced the award of the first phase of this homeownership program to CACS at a news conference attended by both the Mayor and HUD Secretary MARTINEZ, at which time the Mayor expressed support for CACS and the program.
Dr. OMER was asked why FOSTER, working out of the Office of Religious Affairs, would be writing the application for CACS. He replied:
(Dr. OMER Tr. at 13-14 and 16) The CACS proposal claimed that CACS had entered into a partnership with the District of Columbia and that Mayor WILLIAMS agreed to relinquish all District-owned homes to CACS and issue a waiver for property tax abatement. If this assertion is to be believed, and if JONES is to be believed, this was the fourth point of the Mayor WILLIAMS - Reverend TUCKER mayoral campaign agreement. With respect to the so-called agreement the Mayor stated:
Again this is probably just a matter of miscommunication or misinterpretation which often happens in the political environment. In exchange for your support, I promise to do certain things. I promise to do housing. I promise to work with the churches for community revitalization. But the understanding is you got to go through competition. You got to go through all the fair rules and procedures. No one could ever expect that I'm going to call and intervene In an act of discretion. I never have and I never [would].
(WILLIAMS Tr. at 82-83) Portions of the CACS proposal submitted to HUD were read to the Mayor during the course of his interview. The proposal states that the Mayor entered into a partnership with CACS to facilitate all revitalization efforts whereby the Mayor has allowed CACS to acquire and renovate all city-owned properties in the far Southeast and far Southwest parts of the city. It further states that the city will abate real estate property tax payments and other holding costs and property transfer cost concessions on properties acquired by CACS and that taxes and other fees will only be assessed when the properties are sold to future home owners. (Ex. CACS. 7b) The Mayor then replied:
(WILLIAMS Tr. at 86) The Mayor further commented that it would not have surprised him to know that JONES and the Office of Planning and Economic Development also actively worked on the CACS proposal.
(WILLIAMS Tr. at 86-87) A preliminary review of HUD records indicated that CACS was not competitive or even minimally qualified to undertake this kind of real estate development project. CACS did not have the funds to buy the homes from HUD, even at a seventy per cent discount on their market value. On February 19, 2001, The Washington Post (Post) reported that HUD had recently suspended its partnership with CACS. (Ex. CACS. 8) On March 4, 2001, The Post reported on the results of a HUD OIG audit of some of the non-profit organizations around the country that participated in this HUD housing purchase and rehabilitation program. The audit concluded that CACS violated federal rules and that its activities pursuant to the program did not benefit the lower-income residents of the District as intended. The audit recommended that HUD disband the program. Twice, CACS bought houses at half-price from HUD and then sold the properties to homebuyers without the required renovation but at over 600 percent and 200 percent of their costs, respectively. In addition, the HUD audit revealed that CACS purchased 41 houses at a price much lower than required under the program, resulting in a loss to HUD on the sale and excessively high prices to the prospective homebuyers. (Ex. CACS. 9)
On February 25, 2001, the Post reported that the first District-chartered bank is preparing to open for business by the end of the year and the Reverend TUCKER is identified as a bank director. On March 10, 2002, the Post reported that HUD decided not to renew its agreement with CACS and had placed the 250 houses subject to the agreement back on the market for other organizations to purchase. The article indicated that CACS was suspended in October 2001 because it hired GLM Real Estate Management (GLM), a for-profit company, to manage the agreement because the fees incurred added to the price of the houses, contrary to the goals of a program designed to provide houses at the lowest possible cost. The circumstances that led to the selection of CACS for this $14 million real estate development opportunity remain under investigation.
Mayor WILLIAMS and Dr. OMER denied any quid pro quo agreement with Reverend TUCKER. Mayor WILLIAMS stated that he supported CACS' housing rehabilitation program because it was in line with his own revitalization and homeowner initiatives. Dr. OMER stated that CACS would be entitled to tax abatements and other District support to the same extent as that afforded to any other large real estate development project in the District.
The investigation of the EOM's partnership with CACS identified a myriad of problems, to include poor organization, fiscal mismanagement and misconduct on the part of District government employees. The Mayor's Prayer Breakfast was chaotic, disorganized and an embarrassment to everyone who attended. Money believed to have been collected at the door on the morning of the breakfast is unaccounted for. JONES used CACS to establish a checking account over which he obtained almost unfettered control.
According to Reverend TUCKER, JONES used a combination of deception and implied threats to obtain his cooperation as cosignatory on the CACS Conference Account checkbook. JONES insisted that Reverend TUCKER knew that the Conference Account was used to pay for faith-based activities and that Reverend TUCKER's profession of naivety is not credible. It is clear that Reverend TUCKER had his own interests to serve in what appears to be a deferential relationship with JONES. CACS is a recipient of District government funding and had a multimillion dollar real estate investment opportunity pending with HUD, which needed and solicited the Mayor's support. Any effort by Reverend TUCKER to foster a positive relationship with the Mayor and the EOM staff would be expected in light of CACS' business interests. In any event, we conclude that Reverend TUCKER had his own motives for whatever complicity he exhibited toward JONES in the use of the CACS Conference Account and we do not believe it is essential to our analysis of the CACS - District government partnership to determine whether Reverend TUCKER and CACS were victimized by JONES' conduct.
JONES appeared to have taken untoward advantage of the trust YELDELL had in the Mayor whereby YELDELL ceded control of finances for the Mayor's Prayer Breakfast to JONES and allowed JONES to open an EFG checking account for this purpose. JONES used both Conference Accounts to solicit and accept donations from many individuals and corporations that were deceived as to the purpose of their donations. JONES then used those donations for purposes wholly unrelated to the Events.
When interviewed under oath during the course of the OCF investigation, JONES appeared to exhibit a lack of candor, or at the very least minimized and understated his role in EOM fundraising activities. His protestations that he did not fundraise were carefully worded and he claimed only to have responded to the particular set of facts under investigation by the OCF at that time. In the context of this investigation of the use of the CACS and EFG Conference Accounts, however, it is clear that JONES did engage in extensive fundraising and directed his staff to do likewise. This activity reached the point where donors were mailing or personally delivering their checks to the EOM. Although JONES' solicitation activity was not of a kind or volume as that exhibited by McCALL, who solicited hundreds of thousands of dollars in donations for the Millennium Washington 501(c)(3) non-profit organization, it was solicitation nonetheless.
JONES blamed others, such as Dr. OMER, Thomas TUCKER, Reverend TUCKER, and YOUNG for his fundraising and use of the Conference Accounts. JONES did not ensure a final accounting of the funds for which he was custodian and, as he did with the Millennium Washington non-profit, did not ensure that all vendors were paid for their services prior to spending funds for other purposes. One such purpose was the $2,000 payment to PARRISH. Although the Mayor's instructions were to use private funds for this purpose, JONES took it upon himself to instruct the donors to write checks to the CACS Conference Account and the FTK account (which he re-deposited into the CACS Conference Account) and then used a CACS Conference Account check to pay PARRISH. According to JONES, he obtained Reverend TUCKER's endorsement of this check by telling him it was payment for the individual who drove the Mayor's mother to the Events when, in fact, it was for all the transportation services PARRISH provided for the Mayor's mother.
A preponderance of the evidence suggests that JONES also exhibited a lack of candor during his interviews with the OIG; he appeared to have instructed FOSTER to withdraw $2,000 from the CACS Conference Account and to give him that money for an unknown use associated with his attendance at the Democratic National Convention. Dr. OMER also appeared to exhibit a lack of candor to OIG investigators when he denied taking any money from JONES at the Convention. The evidence suggested that Dr. OMER did demand that JONES obtain money for him, that JONES did make arrangements to have $1,500 sent to California, and that JONES did give that money to Dr. OMER for an intended use (probably a one-way return airline ticket) associated with Dr. OMER's attendance at the Convention. We note, however, that Dr. OMER did not convert this money to his own use, but made it available to JONES a week later for use on a down payment to a restaurant for the Congressional Black Caucus reception.
The evidence is clear that JONES purchased airline tickets to the Democratic National Convention for himself and for Dr. OMER and paid for this expense with money he previously solicited from donors and deposited into the CACS Conference Account. He did this despite the instructions from the Mayor's wife that EOM staff who elected to attend the Convention must pay their own expenses. In addition, the evidence suggests that Dr. OMER knew or should have known that his airline tickets were paid for with CACS funds. It had been discussed at EOM meetings that JONES was raising funds through CACS to sponsor the Convention expenses of EOM staff. Dr. OMER asked JONES to make airline reservations for him and made no effort to reimburse JONES.
In addition, JONES' fundraising and event coordination activities and that of certain members of his staff were on behalf of two private entities, CACS and EFG. Consequently, they should not have engaged in such activities on District government time or with the use of government resources. JONES' fundraising methods created a host of tax implications for the donors and the entities that received the donated funds.
Douglas FOSTER exhibited a lack of candor in his interviews with the OIG. The evidence suggested that he did give $2,000 to Mark JONES on August 11, 2000, and in doing so, engaged in CACS private business on government time.
Dr. OMER claimed responsibility for the activities of his employees. Nevertheless, because he and JONES disagree on so many details, and because the Mayor claims not to have known the details of JONES' activities, it has been difficult to determine the degree to which JONES operated alone or with the direct knowledge and implicit consent of Dr. OMER and the Mayor.
9. AnalysisThe Mayor's intention to combine an Economic Conference with the annual Mayor's Prayer Breakfast exemplifies good intentions gone awry. In theory, the partnership with CACS, in cooperation with RIGGS Bank officials, provided an opportunity for the private sector to fund, organize and hold two worthy civic events. In practice, however, the partnership provided a mechanism for the EOM's Deputy Chief of Staff for External Affairs to engage in solicitation, to participate in private fundraising, to take control of donated funds and to direct the expenditure of those funds - which were all activities outside the scope of his official duties. Ultimately, the EOM's partnership with CACS led to the misuse of those funds in a way that implicated District government employees in numerous violations of the Standards of Conduct.
a. Solicitation and Fundraising Mechanisms
The District government did not request and Congress did not appropriate funds for the Events. However, the EOM could have considered various other legal ways to finance the Events: 1) use money appropriated within the Ceremonial Fund; 2) use contributions made to the Constituent Services Fund; 3) use the Mayor's gift acceptance authority set forth in the Appropriations Act to solicit and accept monetary contributions; 4) use funds otherwise appropriated for purposes compatible with the Events (for example, economic development funds or housing revitalization funds for the Economic Conference); or 5) allow the partners (in this case CACS and EFG) to orchestrate the fundraising independently of the EOM.
First, the Ceremonial Fund only authorizes the Mayor to expend up to $25,000 each fiscal year for the reception and entertainment of government officials or eminent persons. However, the Events were not designed to be a reception for eminent persons and the total cost of the Events far exceeded the Fund's cap. From both a legal and practical perspective, the Ceremonial Fund did not provide a useful means to finance the Events.
Second, the Constituent Services Fund authorizes the Mayor to expend up to $40,000 each calendar year to fund "citizen-service" programs. The Mayor may fund such programs personally, with unexpended campaign funds or from monetary contributions. A person may not contribute more than $400 to the fund within a calendar year, except that the Mayor may contribute more than this amount. D.C. Code §1- 443(a) (1999 Repl.).
Citizen-service programs encompass any activity or program that provides services to the residents of the District and promotes their general welfare. 3 DCMR §3014.1. However, Diane SIMMONS-WILLIAMS, the Mayor's wife, serves as Treasurer of the Mayor's Constituent Services Fund and she advised that it is her understanding that the fund, with its limited financial resources, is to be used for the purpose of providing "necessary services" to individual District citizens in financial need. She specifically ruled out the use of the fund for parties and such civic events as the Prayer Breakfast or the Economic Conference. Consequently, this Fund was probably not available as a resource to finance the Events. Arguably, it might have been appropriate to pay PARRISH from this fund if the purpose of the payment was solely to assist a financially distressed citizen and not to pay her for providing driving services around town for the Mayor's mother. However, according to Dr. OMER, the Mayor instructed him not to use District funds to pay PARRISH.
Third, the D.C. Appropriations Act, 2000 authorizes the Mayor only to approve the acceptance and use of donations to carry out the authorized function of District government. District of Columbia Appropriations Act, 2000, Pub. L. No. 106-113, §125(b), 113 Stat. 1501, 1516 (1999). The OCC has opined that implicit within this authority is the authority to solicit gifts, to include donated funds. (OCC Opinion AL-O1-001, January 4, 2001, at 2).
The Appropriations Act further requires the EOM to keep accurate and detailed records of the acceptance and use of any gift or donation and to make these records available for audit and public inspection. D.C. Appropriations Act, 2000, supra. In addition, the D.C. Code requires that the donated funds be deposited into a government fund. D.C. Code §47-130 (1997 Repl. & Supp. 1999). Consequently, all donors should be directed to make their checks out to the D.C. Treasurer. Neither the Mayor nor his staff used the Appropriations Act gift acceptance authority to fund the Events.
Fourth, with respect to appropriated funds that might otherwise be available to the Mayor to fund civic events, JONES did not explore this possibility as a means to finance the Events. to JONES, the Mayor expected him to find private resources to finance such activities. "[The Mayor's] main goal was not to use public funds, which we didn't." (JONES Tr. at 20) The Mayor confirmed JONES' understanding of his responsibility with respect to funding the public-private partnership activities: "My people were generally expected in certain situations to seek dollars from non-profits, seek dollars from businesses to help further these public purpose objectives." (WILLIAMS Tr. at 27) For example, Dr. OMER stated that the Mayor told him to find a way to pay PARRISH but not to use District funds. The Mayor further stated:
I would argue that . . . the problem wasn't in securing funds, the problem was in documenting, recording and managing funds properly. There wasn't a problem in getting people interested in helping the District. Since I've been Mayor, we've raised millions of dollars to support public purposes for the District, for everything from trees to a Mayor's residence to, you know, to work in the social policy area and everything else . . . . I don't think the stress was in receiving the funds. Maybe the stress was in managing them.
(WILLIAMS Tr. at 68) We inferred from the Mayor's interview that he believed his solicitation authority to be almost unfettered, so long as the donations were used for a public purpose. Through his informal delegation of that authority to JONES, he conveyed to the EOM staff that they were to use private funds for many civic activities that he initiated.Last, with respect to using private entities to fund public-private partnership events, the EOM did initially use this vehicle for the Events. When the Mayor approached COUGHLIN to help with, fundraising through the auspices of RIGGS Bank, he made a decision, intentional or otherwise, not to use funding mechanisms otherwise available for public-private partnership activities. RIGGS Bank officials proceeded to raise funds totally independent of the EOM. YELDELL continued to raise money for the Prayer Breakfast through his own efforts to sell tickets. COUGHLIN should have: (1) continued to work with CACS and YELDELL to solicit funds for the Events using CACS and EFG officials - rather than District government employees; (2) retained total control of the finances for the Events; and (3) everyone involved should have ensured that the EOM was removed from fundraising and financing. Thereafter, the EOM could assist the partnership through event sponsorship and organizational support, to include the Mayor's attendance - activity that is inimical to the function of the Office of External Affairs.
However, once JONES took it upon himself to control the solicited funds, he moved beyond his official duties and began to act in a private capacity and on behalf of the private interests of both CACS and EFG. JONES' conduct became even more egregious and further removed from his official duties after the Events concluded, when he began to use the two Conference Accounts to raise funds for his personal use and for activity unrelated to the Events or, more importantly, unrelated to the charitable purpose of the non-profit entities.
b. The Mayor and Dr. Omer
Having once decided to enter into a public-private partnership with the CACS and YELDELL, it was incumbent upon the Mayor to ensure that the work of Dr. OMER and his staff, while developing the partnership and implementing its goals, did so lawfully. The Mayor claimed that he did not know that JONES was the treasurer of a CACS Conference Account, that JONES solicited money personally and through his staff for a private entity, that funds solicited for partnership events were misused, and that bills remain unpaid. Some witnesses support JONES' insistence that he briefed the Mayor and Dr. OMER regularly on his fundraising activities. The Mayor and Dr. OMER deny knowledge of the activities of JONES and his staff that may have violated the Standards of Conduct. There is no clear documentary evidence to support either position. Consequently, the OIG cannot conclude that the Mayor and Dr. OMER were aware of or complicit in JONES' activities that violated the Standards of Conduct, at least with respect to CACS and EFG. Nevertheless, JONES' improper conduct and that of his staff was pervasive and continuous and it occurred primarily from their offices in the EOM. The Mayor, and Dr. OMER as Chief of Staff, claimed they are not personally culpable, but at the very least should be held accountable and are responsible for a failure to supervise their employees. They both acknowledged these facts in their interviews. Dr. OMER took responsibility for any violations of law and regulations on the part of his staff. The Mayor has publicly apologized.
The OIG did not uncover any direct evidence that the Mayor intended to use the Events as a vehicle to raise money for political activities or to circumvent the campaign finance laws. The Mayor did announce his campaign for re-election shortly after the Events, and quickly raised over $500,000 for his campaign. Some of the individuals who have donated to his campaign also donated money for the Events. The Events themselves did not carry any of the indicia of a campaign event, although everyone interviewed about the Events recognized that the Mayor's attendance and participation provided a general political benefit - such as exposure to individuals who comprise donor and voter blocks. In addition, the OIG did not uncover any evidence that EOM fundraising for the Events was political in purpose or a violation of the Hatch Act. See 5 U.S.C.A. §§7322-7324 (West 1996 & Supp. 1999).
c. Mark Jones and His StaffWhen JONES took it upon himself, with or without the knowledge of the Mayor, to open a CACS Conference Account as cosignatory, he began to participate personally in a private activity that implicated a variety of provisions of the Standards of Conduct. For the better part of a year he had almost total control of the Conference Account's income and expenditures. He compounded this private activity by opening a private checking account under the auspices of EFG and controlled the income and expenditures from this account as well. As a consequence, he violated DPM §1804.1 by engaging in conduct that is not compatible with government employment. He used an extended but undeterminable amount of government time and resources for other than official business. DPM §1804.1(b). We do not believe such financial control of the finances of non-profit organizations is either official business or a government approved or sponsored activity, as those terms are used in the DPM. Id. We believe this conclusion is also supported by the prior legal analysis and opinion rendered by OCF with respect to similar conduct on the part of JONES. See "In the Matter of Mark Jones, Deputy Chief of Staff, Office of the Mayor," Order of November 6, 2001, Docket No. PI 2001-101, Office of Campaign Finance, D.C. Board of Elections and Ethics, and similar analyses by the D.C. Ethics Counselor and OCC.
By engaging in this activity, JONES also violated D.C. Code §1.619.2 (1999 Repl.) (Conflicts of Interest) and its parallel Standard of Conduct, DPM §1804.1(d), which precluded him from maintaining a financial or economic interest in CACS or EFG if there was any likelihood that either entity might be involved in an official government action or decision taken or recommended by the employee. As Deputy Chief of Staff for External Affairs charged with coordinating the development of the Events, JONES created this conflict of interest by taking official action on events coordination while having a financial interest in both CACS and EFG. He had a personal financial stake in the success of the Events that conflicted with his official duties to coordinate the Events on behalf of the EOM. This personal interest in CACS and EFG was compounded when he began to fundraise for both organizations and to do so from District government space and with the assistance of his staff in order to benefit other EOM civic activities. JONES also violated DPM §1804.1(c) by ordering, directing and requesting his subordinates to perform during regular working hours personal services (solicitation and fundraising) not related to official District government functions and activities.
JONES may not argue that in fact he made no official decision that affected his personal financial interests because he is prohibited in this context from even the appearance of impropriety. DPM §1813.1 precluded him, as a then District employee, from engaging in a private business activity or having even an indirect financial interest that conflicts or would appear to conflict with the fair, impartial and objective performance of official duties. We believe his financial interest in CACS and EFG at the very least created the appearance that it conflicted with the impartial and objective performance of his official duties in coordinating the Events for the EOM.
The evidence suggests that from approximately April 2000 to January 2001, JONES personally participated in the solicitation of funds that were deposited into the CACS and EFG accounts originally opened for the Events. This activity went far beyond the original intent of the Mayor to have RIGGS Bank officials coordinate the fundraising for the Events. After the Events concluded, JONES began to use his control of these two accounts to raise funds for other purposes. Donors were given a variety of reasons why they were being solicited, none of which had anything to do with the Events. JONES used the accounts as private funding vehicles to pay PARRISH, to fund his transportation to the Democratic National Convention, and to forward cash to FIX, another account used by JONES to fund a variety of other civic activities. All of this fundraising activity was conducted on government time and violated DPM §1804.1(b).
In addition, and since the OIG has concluded that the fundraising activities of JONES and his staff on behalf of CACS and EFG were conducted in their personal capacities, DPM §1803.2 is implicated. This Standard of Conduct prohibits District government employees from soliciting or accepting anything of value from a person who, singularly or in concert with others, has or is seeking to obtain contractual or other business or financial relations with the District government or conducts operations or activities that are subject to regulation by the D.C. government. Almost everyone contacted by JONES and members of his staff had such a business interest with the District government, to include, by way of example, CRAWFORD, MFUME, CHENG, SCOTT, GOMEZ, TYNE, MANNING and TRABUE.
We recognize that JONES claimed to have acted at all times in his official capacity when fundraising and coordinating events as instructed by Dr. OMER and the Mayor. In that case, we believe he violated D.C. Code §1-619.1 (a) (1999 Repl.), which requires all District government employees to maintain a high level of ethical conduct and to refrain from any official action that would adversely affect the confidence of the public in the District government. JONES was a senior and publicly visible official in the EOM who, for a prolonged period of time, engaged in conduct that violated numerous provisions of the Standards of Conduct and directed or permitted his subordinates in the Office of External Affairs to do likewise. We can only conclude that his actions undermined the public's confidence in the District government.
With respect to EOM employees who worked for JONES, Thomas TUCKER admitted soliciting for FTK, although some donors were instructed to make their checks out to EFG. As a consequence, the conduct of THOMAS TUCKER also violated DPM §§1800.1, 1803.1(1), 1803.2(a) and (b), and 1804.1(b). YOUNG was a contract employee and not subject to the DPM.
There is no evidence that other EOM employees directly engaged in fundraising for CACS or EFG. Dr. OMER, Thomas TUCKER, and JONES are no longer District government employees.
Douglas FOSTER was never a direct subordinate of JONES. FOSTER began working for the EOM as a volunteer in the Office of Religious Affairs immediately after the Mayor took office. Eventually he obtained a position in the Office of Consumer and Regulatory Affairs, where he remains employed as a District government employee. We believe FOSTER exhibited a lack of candor in response to questions from the OIG while he was under oath. For example, he denied making any deposits to the CACS Conference Account on August 11, 2000, the day his wife negotiated a $2,000 check to withdraw cash from the account. When he was confronted with the relevant deposit slip in his own handwriting, he admitted to the transaction he had previously denied. FOSTER claimed that he engaged in this activity during the course of an extended lunch hour and that he did not take any time off from work. In addition, we believe his statement that he handed $2,000 to Thomas TUCKER rather than JONES to be inconsistent with the evidence. This lack of candor on the part of Douglas FOSTER violates DPM §1800.2, which requires him to maintain an unusually high standard of honesty and integrity, and DPM §1803.10, which prohibits him from interfering with or obstructing an investigation of the OIG. FOSTER first stated that this transaction occurred during the course of his lunch hour. However, he admitted that his wife picked him up from work during the afternoon of a workday, that together they drove to the First Baptist Church where he obtained Reverend TUCKER'S endorsement of a CACS Conference Account check made payable to the order of Maya FOSTER, and that he and his wife then drove to a bank where he accompanied his wife as she negotiated the check and made his own deposit to the Account. He admitted that he and his wife then drove to 414 4`h St., N.W., where he entered the District government building, proceeded to JONES' office and then supposedly gave the $2,000 to Thomas TUCKER. He then left the building and instructed his wife to drive him back to work. When confronted with the fact that all this activity could not have occurred during his lunch hour, he stated that he took an extended lunch hour. However, he and his wife were in the bank at 4:50 pm, which belies any reasonable understanding that such activity, occurring as it did between the hours of 4:00 pm and 5:00 pm, was during a lunch hour. We believe that for at least two hours during the better part of the afternoon of August 11, 2000, FOSTER was engaged in private business activity while employed by and on duty with the Department of Consumer and Regulatory Affairs. FOSTER's actions in this regard violated DPM §1804.1(b) - using government time for other than official business.
d. Tax Issues
JONES deceived numerous donors as to the purpose of their donations and the status of the intended recipient organization. For example, at least four donations, made payable to EFG and intended for the Events, were diverted by JONES and deposited in the FTK account to be used for other purposes. EFG is not recognized by the IRS as a 501(c)(3) non-profit entity. In another example, money solicited to pay PARRISH was obtained via checks to CACS, from which CACS then paid PARRISH. Dr. OMER's $1,500 contribution to the down payment for the Congressional Black Caucus reception was first funneled through CACS. Other funds solicited by JONES for CACS were in fact used for Democratic National Convention purposes and for his own personal benefit. Consequently, his actions raise tax fraud implications on his part and other tax consequences for the donors, for EFG, and for CACS. Some donors may have incorrectly considered their donations to be a charitable deduction. EFG may not have filed a proper tax return, or may have improperly considered income raised by JONES to be nontaxable. The transfer of $22,000 from the CACS to EFG Conference Accounts may have tax implications since the transfer was from an authorized 501(c)(3) non-profit to one that was not so authorized. CACS may have improperly included the salaries of Wonder Works Consulting employees as business expenses. At the very least, CACS, through its Conference Account, has income generated by JONES from April 2000 through December 2001 that was not intended for or used for charitable purposes. As a result, CACS may not have properly characterized these funds as unrelated business income and therefore taxable.It is beyond the scope of this investigation to review the tax records of the donors and non-profit entities. Therefore, the results of the investigation of the Events will be referred to the IRS for further consideration.
NOTE: Attached as a final exhibit is the donor list for the Events. (Ex. CACS 10)
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