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Government and People
VI. Narrative of the Events
III. 2000 Republican and Democratic National Conventions: Mayoral Luncheon Reception and Hospitality Suite
According to Bob JONES, Mayor WILLIAMS asked him to serve as Director of the Mayor's Inaugural events at a meeting on December 12, 1998. Bob JONES stated that at the time, the Mayor voiced his displeasure with the Inaugural committees because they were unorganized, and that the Mayor abolished them as a result. The events that Bob JONES produced as part of the Mayor's Inaugural were a Prayer Breakfast, a Swearing-In Ceremony, two receptions, and an Inaugural Ball. Bob JONES stated that these events were funded through ticket sales and corporate contributions (e.g., Coca-Cola, Fannie Mae, Potomac Electric Power Company (Pepco), C&P, Washington Gas, and Kempfer), and the funds collected were placed into the account of a non-profit entity, Williams '99 Inaugural.
Bob JONES further related that the funds left over in the Williams '99 Inaugural account (approximately $23,000) were transferred into WFC. (Exs. WFC 1 and 2) WFC was incorporated and registered with the D.C. Department of Consumer and Regulatory Affairs (DCRA) as a non-profit entity under Section 501(c)(4) of the Internal Revenue Code on May 17, 1999.VI-35 WFC's articles of incorporation state that its purpose is "to promote the welfare of the District of Columbia, by serving to support the government of the District of Columbia and the activities of the office of the Mayor of the District of Columbia." (Ex. WFC 3) Bob JONES explained that WFC was established to provide supplemental funding for certain activities of the Executive Office of the Mayor (EOM) for which the Mayor did not want to use District funds (e.g., travel expenses for the Mayor and his wife). In addition to Bob JONES, Douglas J. PATTON, and Gwendolyn HEMPHILL serve as directors for WFC.
WFC's initial checking account was established with Industrial Bank, N.A. on September 23, 1999. On July 3, 2000, WFC transferred its account to Independence Federal Savings Bank, with PATTON, HEMPHILL, and Bob JONES listed as account signatories.In a letter dated February 1, 2000, Mayor WILLIAMS asked Bob JONES to assist in arranging for the Mayor's participation in the national conventions of the two major political parties. (Ex. WFC 4) Specifically, the Mayor's letter requested that Bob JONES assume responsibility for the following activities:
(Id.) (Emphasis supplied) Bob JONES stated that he accepted the Mayor's offer but received no compensation for his assistance with the RNC and DNC convention events.During the time Bob JONES assisted the Mayor, he was the Director of Corporate Affairs for the Downtown Business Improvement District (BID). Bob JONES was actually a federal employee with the General Services Administration at the time, but was detailed to BID pursuant to an Intergovernmental Personnel Agreement in April 1997.VI-36 (Ex. WFC 5) Bertha GAMMON, Downtown BID's Senior Director of Finance and Administration, stated that Downtown BID collects revenues from businesses and properties within a designated area through assessments based upon the square footage of each property. In exchange for these assessments, BID provides services for the business area, such as cleaning services and tourist information attendants.
2. Republican National Convention Luncheon
a. The Donors
To fund the RNC luncheon, the Mayor and Bob JONES solicited contributions from Lockheed and the Sports Commission. Lockheed, a subsidiary of the Lockheed Martin Corporation, provides technology-based services to state and local government agencies, with a focus on transaction processing, program management and systems integration services. Lockheed specializes in child support enforcement, welfare and workforce services, childcare management, electronic toll collection and other intelligent transportation services involving the trucking industry, photo enforcement of red-light and speeding violations, parking management, and information technology outsourcing.
At the time of the event, Lockheed had several substantial contracts with District government agencies, including the following contracts:
The Sports Commission is "an independent authority of the District government," which promotes the District as a venue for hosting sporting events and operates sporting and entertainment facilities in the District, including RFK Stadium and the National Guard Armory Complex. D.C. Code §2-4003 (Supp. 1999). The Sports Commission has an eleven member Board of Directors, eight of whom are nominated by the Mayor with the advice and approval of the D.C. Council. Id. §2-4004(a). The other three board members ("ex-officio members") are comprised of the District's Chief Financial Officer, the Director of the Department of Recreation and Parks, and another government official selected by the Mayor. Id. The Board, in turn, appoints an Executive Director who serves as the commission's chief executive officer. Id. §24005(a). One of the principal duties of the Executive Director is to approve all of the Commission's accounts and expenses. Id. §2-4005(b).
b. Planning for the EventBob JONES stated that he advised Mayor WILLIAMS that the Mayor should attend the 2000 RNC in Philadelphia, Pennsylvania (July 31, 2000 - August 3, 2000), and host an event at the RNC because the Chairs of the U.S. Senate and U.S. House of Representatives would be in attendance. John BROPHY, the President and Chief Executive Officer of Lockheed, recalled that the Mayor approached him at an evening social function in the Spring of 2000 and informed BROPHY that he (the Mayor) was planning to attend the RNC and the DNC. When BROPHY told the Mayor that he was also planning to attend both conventions and that Lockheed was sponsoring activities for the same, the Mayor asked BROPHY if he would be willing to " help out" by sponsoring events that the Mayor was intending to host. (BROPHY MOI, March 27, 2001, at 1)
BROPHY stated that he agreed to the Mayor's request and that, shortly thereafter, Bob JONES called him to schedule a meeting to discuss the events. BROPHY and other Lockheed personnel subsequently met with Bob JONES and Mark JONES (former EOM Deputy Chief of Staff to discuss the events that the Mayor would host at the conventions. Bob JONES deemed Lockheed "a natural" to sponsor both the RNC and DNC events because Lockheed is a major employer in Texas and Tennessee - the hometowns of each 2000 presidential candidate - and because Lockheed has contracts in the cities of Los Angeles and Philadelphia.
According to Bob JONES, he identified the Prime Rib restaurant in Philadelphia as the site for the affair. He further stated that because Lockheed is a contractor with the District, he tried to ensure that only business transactions occurred between the businesses involved, and that he kept a distance from Lockheed funds.
Glen ST. COUER, Banquet Manager at the Prime Rib Restaurant, advised that there was a contract for the banquet, but (for unknown reasons) only his signature appears on the contract. (Ex. WFC 6) The Banquet Deposit sheet, however, lists Lockheed Martin as the client. (Ex. WFC 7) ST. COUER stated that the cost of the banquet was $50 per person and that 167 people attended the affair. ST. COUER recalled that Bob JONES assisted with the seating arrangements.
The Prime Rib charged $10,136.79 for the luncheon. (Ex. WFC 8) On July 18, 2000, Lockheed employee Eddie QUINTANILLA paid the restaurant the $2,500 deposit by credit card. (Ex. WFC 9) ST. COUER stated that Lockheed employee Mark MADDOX coordinated the menu with him for the event, and that Judy BRIENZA (another Lockheed employee) paid the balance ($7,636.79) by credit card on August 1, 2000. (Ex. WFC 8)
Bob JONES recalled that he approached John RICHARDSON, Chair of the Sports Commission, to solicit a contribution for the mayoral activities at the political conventions in exchange for allowing the Sports Commission to present its "Bring Baseball Back to D.C." program at both events.VI-37 RICHARDSON stated that Bob JONES told him that the Sports Commission could participate if it contributed $10,000 for each convention. According to Bob JONES, he requested a contribution from the Sports Commission to pay for the transportation costs of the Mayor and the Mayor's wife to attend each convention, although he did not tell RICHARDSON the specific purpose of the contribution. Bob JONES further stated that he solicited these funds during a telephone conversation; Bob JONES and RICHARDSON agreed that no documentation regarding the solicitation was kept.
Scott BURRELL, the Sports Commission's Chief Financial Officer, advised that he and Anthony BURNETT (the RFK Stadium manager) signed a Commission check for $20,000, payable to WFC, to assist with costs associated with the RNC luncheon event and the events at the DNC. (Ex. WFC 10) BURRELL pointed out that a contribution of less than $25,000 did not require approval by the Commission's board of directors and could be approved solely by the Executive Director (RICHARDSON). BURRELL added that it was not unusual that the Sports Commission did not keep documentation. regarding the solicitation because the WFC contribution was a "unique event." (BURRELL MOI at 2) BURRELL did justify the expenditure in an August 7, 2000, file memorandum, which states:
(Ex. WFC 11) Lockheed officials, however, stated that Lockheed was not aware that the Sports Commission provided funds to support either the luncheon reception at the RNC or the Hospitality Suite at the 2000 Democratic National Convention. BURRELL advised that the Sports Commission was under the impression that its contribution was to assist with paying the costs associated with the event, i.e. space rental and catering.
However, the entire expense for the catering of the luncheon reception was paid by Lockheed, and there was no cost associated with space rental. While Lockheed paid all costs associated with each event directly to the vendors, the Sports Commission paid $20,000 directly to WFC without any documentation, invoices, or billings indicating where its money was going. The Sports Commission's check was written on August 7, 2000, after the luncheon and after Lockheed had paid the Prime Rib's invoice in full. (See Ex. WFC 10)
Bob JONES stated that the purpose of the Sports Commission's contribution was to pay for transportation costs associated with the Mayor and his wife's attendance at both political conventions. Although Bob JONES confirmed that he might have asked RICHARDSON for a contribution of $10,000 for each political convention, he denied making any representation to RICHARDSON as to the purpose for which the funds would be used. When queried why he did not ask Lockheed to pay for these transportation expenses, Bob JONES informed OIG investigators that Lockheed had specific guidelines (a "discrete area") for which type of events the corporation would fund, and that he did not want "Lockheed to put money into a pool." (Bob JONES MOI, August 6, 2001, at 3) Bob JONES also stated that no one instructed him to solicit the Sports Commission for the referenced contribution.
Bob JONES further stated that he obtained the guest list for the District Delegates and Alternates to the RNC who were invited to attend the Mayor's luncheon from Betsy WERRONEN, the Chairman of the D.C. Republican Committee. (Ex. WFC 12) Lockheed designed and printed the invitations for the event and delivered them to Bob JONES for distribution. (Ex. WFC 13) Approximately two weeks prior to the luncheon, Bob JONES asked Max BROWN, Chief Operations Officer and Executive Vice President of The Carmen Group (TCG),VI-38 if he could use TCG's offices to receive the responses from the invitees. BROWN informed OIG investigators that he agreed to assist and assigned Melvon WHITE, Secretary for TCG, to receive the responses and track them on a guest list. The OIG confirmed with WHITE that she assisted with the responses. According to WHITE, she spent the majority of her time during the two-week period on the RNC luncheon.
Michael RUSSELL, Chief Financial Officer for TCG, stated that TCG is a member of "the Republic Team 100," an organization consisting of the top 100 contributors to the Republican Party. RUSSELL recalled that TCG reserved a block of rooms at the Westin Hotel during the RNC and paid for the rooms of its clients and employees. Bob JONES stated that TCG reserved rooms for himself, the Mayor, and the Metropolitan Police Department officers who were members of the Mayor's security detail. However, TCG later billed Bob JONES and the Mayor for their rooms at the Westin, and WFC reimbursed TCG for the same. (Exs. WFC 14 and 15)
c. The Event
On July 31, 2000, Mayor WILLIAMS and his wife traveled to Philadelphia by train and stayed at the Westin Hotel. The RNC luncheon was held the next afternoon, from 12:00 - 2:00 p.m. At this bi-partisan event, Mayor WILLIAMS spoke of his agenda and the need for the Democratic and Republican parties to work together to improve the District of Columbia. The Mayor additionally acknowledged and thanked the Republican establishment for being hospitable and inclusive with regard to the District of Columbia. The Mayor also used the occasion to promote the theme of the luncheon, "Bring Baseball Back to D.C."
RICHARDSON stated that in exchange for the Sports Commission's $10,000 contribution, the Sports Commission was able to "take over" the RNC luncheon event. (RICHARDSON MOI, May 8, 2001, at 2) He recalled that during the luncheon the Commission placed a baseball on every table, displayed "Bring Baseball Back to D.C." banners on the walls, and addressed those in attendance regarding the merits of the program.
The invited guests were members of the Republican Party, to include the D.C. Republican delegation. Warren GRAVES, BURRELL and RICHARDSON from the Sports Commission were also in attendance, as was BROPHY and BRIENZA (Lockheed), BROWN (TCG), and Bob JONES.
EOM employees who attended the luncheon included: Mark JONES; Lamont MITCHELL, former Special Assistant to the Mayor; Lydia SERMONS-WARD, former Director, Office of Communications; Darlene TAYLOR, former Director, Office of Intergovernmental Relations; and James WARECK, former Special Assistant to the Mayor for Environmental Affairs. The OIG reviewed official time and attendance records for each of these employees, and determined that Mark JONES, MITCHELL, TAYLOR, and WARECK were not charged leave for August 1, 2000. SERMONS-WARD, however, was charged with eight hours of annual leave on August 1, 2000.
When questioned on this point, WARECK stated that he attended the RNC for the purpose of doing environmental work on behalf of the District government. WARECK stated that the convention presented an opportunity for him to meet staff from Pennsylvania Governor Tom RIDGE's office, who were giving a presentation on environmental issues at the RNC. It also provided an opportunity for him to visit a home with solar panels that RIDGE's administration had constructed in Philadelphia because WARECK was considering building a similar home in Anacostia. WARECK was also interested in learning at the RNC about the environmental programs advocated by Jim SYTHE, an environmental advisor with the Bush Administration.Mark JONES, MITCHELL, TAYLOR, WARECK, and SERMONS-WARD indicated that they traveled to Philadelphia and returned to the District in one day and paid for their travel with personal funds. TAYLOR and WARECK took the train; MITCHELL and SERMONS-WARD drove their personal vehicles to the event.
As stated above, Bob JONES paid for Mayor WILLIAMS and Diane WILLIAMS' train fare and hotel accommodations out of funds in WFC's account. The Mayor and his wife returned to the District on the afternoon of August 1, 2000.
3. Democratic National Convention Events
a. The Hospitality Suite
The 2000 DNC was held in Los Angeles, California from August 14 - 17, 2000. During the week of the DNC, the Mayor and the District of Columbia delegates hosted a reception suite, located across from the main convention center, at 1100 Flower Street, Los Angeles, California. The reception suite was an ongoing event throughout the week of the DNC and provided refreshments daily to attending delegates.According to BROPHY, the idea for the Hospitality Suite was developed during his meeting with Bob JONES and Mark JONES prior to the RNC. Ed AVILA, a Lockheed employee at the Los Angeles office, (in coordination with BRIENZA) located and booked the facility for the reception suite, which was in the process of being remodeled for its opening as a new restaurant. Lockheed paid for the expenses associated with the reception suite - to include remodeling and catering costs - totaling $29,158.20. The catering expenses totaled $15,746.75 and were paid to Nic's Restaurant; the remodeling expenses totaled $13,691.65 and were paid to American RentAll. (Exs. WFC 16-18 and Exs. WFC 19-23)According to Lockheed officials, the space for the Hospitality Suite was provided by the Arena Company, which owns the Staples Center in Los Angeles. Arena Company is headed by Ted TANNER, who is a friend of Lockheed employee AVILA. Lockheed officials advised that Arena Company has never charged Lockheed for the cost of the space ($10,000) despite Lockheed's requests for an invoice. (See Ex. WFC 24)
Lockheed additionally designed and printed the invitations for the Hospitality Suite, and then gave them to Bob JONES for distribution. (Ex. WFC 25) Bob JONES stated that he, along with Lockheed personnel, oversaw the set up of the Hospitality Suite and that no District government employees were involved with the same.
The investigation determined that the Sports Commission made a $10,000 contribution,for the DNC from the previously referenced $20,000 check paid to WFC on August 7, 2000. Additional Sports Commission expenditures included costs associated with promotional items for the "Bring Baseball Back to D.C." program that were distributed at the event.
b. Travel and Hotel Accommodations
Bob JONES stated that the Mayor asked him to assist with his travel and hotel arrangements for the DNC. Bob JONES went through the Democratic Committee to obtain rooms for the Mayor at the DNC hotel (the Wilshire Grand Hotel). The airfare for Mayor WILLIAMS and his wife to Los Angeles International Airport totaled $948.44, which the Mayor charged to his personal credit card; however, Bob JONES subsequently paid the credit card bill for the airfare charges through the WFC account. (Ex. WFC 26) The evidence indicated that the Wilshire Hotel rooms for Bob JONES, the Mayor, the Mayor's wife, and his mother were paid by a WFC check in the amount of $3,470.38. (Ex. WFC 27) WFC also paid for a car and driver for the Mayor's wife at the DNC. The OIG's review of time and attendance records indicated that Mayor WILLIAMS did not take any form of leave for his attendance at the DNC and was compensated for working his normal duty hours.
Bob JONES solicited the assistance of Gus WEST, an independent government affairs consultant, to handle the DNC travel logistics (to include travel, lodging, and scheduling) for the Mayor, Diane SIMMONS-WILLIAMS, the Mayor's mother, and the D.C. Delegation. (Ex. WFC 28) WEST recalled that he first met Bob JONES during the planning for the Mayor's inauguration when Bob JONES contacted him three days prior to the inauguration and requested his assistance because the inaugural planning was in disarray. At the time, WEST was employed as a travel advance planner under the Clinton administration and, according to WEST, was assigned by the White House to assist Bob JONES with the Mayor's inaugural. WEST stated that he received between $1,000 - $2,000 from the Williams' Inaugural fund for his services.
WEST stated that he spent approximately ten days in Los Angeles for the DNC. WEST stated that he did not charge a fee for his DNC consulting services because he was a "supporter of the Mayor" and wanted to "help the Mayor and the city." (WEST MOI at 2) Bob JONES did pay WEST $4,750 from the WFC account for airfare, hotel, a rental car, food, and other incidental expenses for himself, his sister, and an assistant. (Ex. WFC 29) WEST added that this check only covered part of the lodging expenses for WEST's sister and assistant because during the trip these two individuals also stayed in a condominium that WEST's family owned in Los Angeles.VI-39
Members of the EOM staff that attended the DNC included: Dr. OMER, former Chief of Staff; Mark JONES; SERMONS-WARD; TAYLOR; Gregory McCARTHY, then Director of Policy; Christopher BENDER, former EOM Speechwriter;VI-40 and Joy ARNOLD, then Confidential Assistant to the Mayor. The OIG reviewed all available information relating to travel expenses, hotel guest accounts, incidental travel expenses, and time and attendance records for those members of the EOM who attended the DNC. A review of these records revealed the following information:Dr. OMER's roundtrip ticket to Los Angeles, which totaled $609.00, was paid by Mark JONES who used CACS (Church Association for Community Service) funds previously solicited by Mark JONES for just this purpose. Dr. OMER claimed not to know how Mark JONES paid for his tickets and made no effort to reimburse Mark JONES until many months later. Mark JONES claimed that Dr. OMER did know that CACS paid for this travel expense because the EOM staff met and discussed raising money through CACS to pay for all the staff s travel expenses. This plan was cancelled when the Mayor's wife told Dr. OMER and Mark JONES that they had to pay their own way and could not use a sponsor. Despite these instructions, Mark JONES used CACS funds for airline tickets for himself and Dr. OMER.VI-41 OMER stayed at the Wilshire from August 11 - 18, 2000, and paid his hotel account ($1,570.93) with his personal credit card. Dr. OMER's official time and attendance records were reviewed and indicated that he was on annual leave while attending the DNC.
Mark JONES' time and attendance records show that he was on administrative leave from August 14 - August 18, 2000; furthermore, these records indicate that Mark JONES' administrative leave status was approved by Dr. OMER as Dr. OMER's initials appear on Mark JONES' timesheet. However, in his interview with the OIG, Dr. OMER denied initialing Mark JONES' timesheet and asserted that the initials were not his own. Dr. OMER stated that because Mark JONES was with the Mayor at the DNC and performing his official duties, Mark JONES' administrative leave status was a legitimate claim, and that he (Dr. OMER) would have approved it had it been submitted to him.
A subpoena of guest account information at the Hilton Hotel revealed that Mark JONES stayed at that hotel from August 11 - 18, 2000. Mark JONES' credit card statement confirmed that his guest account of $1,341.11 was settled with his personal credit card. As stated above, Mark JONES used funds raised in the CACS account to pay for his travel expenses to the DNC.SERMONS-WARD'S credit card statements reveal that she paid for her airfare to Los Angeles ($423.84) by her personal credit card. SERMONS-WARD also stayed at the Wilshire from August 12 - 13, 2000, and paid her hotel account of $260.49 with a personal credit card. SERMONS-WARD confirmed that she paid for all of her own expenses related to her travel to the DNC. SERMONS-WARD stated that she was on annual leave while attending the DNC, which was confirmed by her time and attendance records.
Although TAYLOR attended the DNC, she stated that she stayed at the residence of a friend's mother while in Los Angeles. Guest account information obtained from the Wilshire and the Hilton confirmed that TAYLOR was not a guest at either hotel. TAYLOR also stated that she paid for her own airfare expenses related to her travel to Los Angeles and was not reimbursed. A review of TAYLOR's time and attendance records indicated that she was on annual leave while attending the DNC.
Hotel records and credit card statements indicate that McCARTHY stayed at the Wilshire from August 13 - 17, 2000, and paid for his $819.74 hotel account with his personal credit card. McCARTHY stated that his airfare to Los Angeles was paid by his own frequent flyer award voucher. He also stated that he was on annual leave while attending the DNC. McCARTHY provided documentation supporting these statements, to include a copy of his airline ticket and a copy of his Application for Leave Form. His time and attendance records confirmed his annual leave status while attending the DNC.
BENDER stated that he received no compensation from the District for any expenses related to his travel to the DNC, and that he was on leave without pay from the EOM while attending the DNC. BENDER's GWU supervisor confirmed that GWU paid for BENDER's airfare and hotel expenses. In addition, BENDER's official time and attendance records confirmed that he was on leave.
ARNOLD stated that she paid for her airfare to Los Angeles with her personal debit card (approximately $400). ARNOLD also asserted that she stayed at the Wilshire and that a friend paid her hotel account. However, she declined to identify that individual and, consequently, the Wilshire has no records of her stay during the DNC. ARNOLD claimed that she was on annual leave while attending the DNC, which was supported by her time and attendance records. ARNOLD further stated that she was not reimbursed or compensated in any way for her expenses related to her attendance of the DNC.
c. Events Hosted by the Mayor at the DNC
Throughout the week, delegates used the D.C. Hospitality Suite for meetings and evening receptions. Mayor WILLIAMS used the venue to give several speeches regarding the District "Taxation without Representation" program and the Sports Commission's "Bring Baseball Back to D.C." program. SERMONS-WARD stated that she assisted with setting up press conferences and preparing talking points for the Mayor at the DNC. According to SERMONS-WARD, the Mayor hosted and participated in three events at the DNC: 1) a breakfast meeting to promote the District's "Taxation without Representation" issues; 2) an evening reception on the second day of the convention; and 3) a luncheon for the D.C. Delegation.
SERMONS-WARD stated that the breakfast meeting was held at the D.C. Delegation's hotel, and that D.C. Vote, a non-profit organization, provided banners and t-shirts for the affair. For the evening reception, SERMONS-WARD recalled that the D.C. Delegates were given invitations to distribute to other DNC participants, and that the evening reception was broadly attended as a result .VI-42 SERMONS-WARD further recalled that Bob JONES, Mark JONES, and Dr. OMER took the lead in organizing this reception.
The third DNC event - the luncheon reception - was held at the D.C. Hospitality Suite on August 17, 2000. Leonard MANNING, the Chief Executive Officer of LTE, contributed $2,374.25 to sponsor this event. MANNING advised that he saw a news report on or about August 14, 2000, in which D.C. Delegate Barbara LETT-SIMMONS complained that the accommodations for the D.C. Delegates attending the DNC were deficient. According to MANNING, he contacted Mark JONES on August 14th and offered to host a reception for the District delegation. MANNING stated that Mark JONES accepted his offer and asked if MANNING would host a breakfast reception on August 17, 2000. MANNING agreed and flew to Los Angeles on August 16, 2000. At some point, Mark JONES informed MANNING that one of former Council Member Charlene Drew JARVIS' constituents was already sponsoring a breakfast reception on the 17th. MANNING stated that he then volunteered to host a luncheon reception instead, which was subsequently held on the 17th at the Hospitality Suite. MANNING paid the caterer for the affair, Nic's of Beverly Hills, with his personal credit card on August 16, 2000, and later reimbursed himself through LTE's account. (Ex. WFC 30)
Thomas TUCKER, former EOM Special Assistant for External Affairs, recounted a different version of events. TUCKER, who did not attend the DNC, stated that Mark JONES called him from Los Angeles during the DNC and requested that TUCKER contact MANNING and ask MANNING to sponsor a breakfast event for the Mayor at the convention. TUCKER recalled that he then contacted MANNING and MANNING indicated that he was leaving for Los Angeles that evening.
MANNING stated that shortly before the DNC, he visited the residence of Joseph YELDELL, a retired District government employee, to seek his advice on how to best implement a "rapid draw bingo game" in the District. Upon the conclusion of their discussion, MANNING asked YELDELL if he owed him anything for the advice. MANNING recalled that YELDELL responded that he did not owe YELDELL anything, but then YELDELL asked if MANNING would be willing to contribute funds to "help some people go to California." (MANNING MOI, September 6, 2001, at 2) MANNING stated that he then gave YELDELL between $500 and $700 in cash, but did not specifically ask YELDELL whom the money was for or for what purpose it was to be used.
d. The Martini ReceptionDuring the evening of August 16, 2000, Council Member Harold BRAZIL hosted a two-hour martini reception at the D.C. Hospitality Suite. According to Joe RUFFIN, an independent political consultant who was BRAZIL's campaign manager at the time,VI-43 RUFFIN recommended that BRAZIL host a breakfastVI-44 and an evening reception for the D.C. Delegates. BRAZIL indicated that he contacted Claudia MCKOIN, Director of Technology and Internet Services for Verizon Communications, and asked her if Verizon would be willing to pay for the evening reception. MCKOIN agreed to the request, and she coordinated the planning of the event with RUFFIN. Verizon's President, Marie JOHNS, stated that Verizon agreed to contribute in the interest of being a good corporate citizen and enhancing the District's image.
According to Lockheed officials, prior to the DNC, Bob JONES informed Lockheed employee BRIENZA that the D.C. Delegation wanted to have a Martini Reception at the DNC. However, BRIENZA declined on Lockheed's behalf because she believed that it would be inappropriate for the corporation to sponsor this type of activity. Bob JONES subsequently informed her that Verizon would pay for the reception, and BRIENZA later submitted to him the invoice from the caterer. (Ex. WFC 31) RUFFIN stated that he paid Lockheed an undisclosed amount for the use of the D.C. Hospitality Suite for the two-hour Martini Reception.
Verizon paid Nic's Restaurant $1,795.50 for the beverages served at the reception. However, MCKOIN stated that Verizon had not been informed that its contribution would be used to purchase alcoholic beverages.
B. ANALYSISIn February 2000, Mayor Williams enlisted the assistance of Bob JONES to arrange for the Mayor's participation in the 2000 Presidential Conventions and to set up official receptions at the RNC and DNC to be hosted by the Mayor. Without appropriated funds for these events, the Mayor was left with three options: 1) use funds appropriated in the Ceremonial Fund; 2) raise funds through his gift acceptance authority pursuant to the D.C. Appropriations Act, 2000; or 3) encourage a non-profit to jointly support the events. The Ceremonial Fund was not used to fund this event. However, the Mayor appears to have invoked his gift acceptance authority by initially soliciting financial support from a private corporation. Further planning and funding for the RNC and DNC events was achieved primarily through the assistance of Bob JONES, a director for a non-profit organization.
As with other events investigated by the OIG, the Mayor and involved EOM employees should have sought legal assistance from in-house counsel, the Office of the Corporation Counsel (OCC), or the Office of Campaign Finance (OCF), to determine the appropriate methods for funding and producing the District government events at these two political conventions during the preliminary planning stages. Because there is no evidence that such a legal opinion was obtained, the OIG will analyze these events in light of applicable law and prior opinions issued by OCC and OCF that address government fundraising in similar scenarios.
1. Appropriations Act Gift Acceptance and the Ceremonial Fund
Congress did not provide for a separate appropriation to fund these events; however, the Appropriations Act granted the Mayor the authority to solicit and use donated funds for authorized governmental functions. District of Columbia Appropriations Act, 2000, Pub. L. No. 106-113, §125, 113 Stat. 1501, 1516 (1999). Hosting receptions for congressional leaders and other government officials arguably falls within the parameters of the Mayor's Ceremonial Fund. Accordingly, if the Mayor chose to solicit donations via the Appropriations Act, he might have done so since the "reception and entertainment" of federal, state, and local officials in other jurisdictions appears to be an authorized function of the Mayor's Office.VI-45
With the exception of the Mayor's discussion with BROPHY at the spring 2000 social event, the Mayor did not personally raise funds in this case; instead, he sought and received the assistance of Bob JONES to assume all responsibility for producing these events, to include fundraising. There was one crucial impediment to an official delegation of the Mayor's gift acceptance authority in this instance - Bob JONES was not an officer or employee of the District government. Indeed, BID is statutorily defined as a non-profit corporation, which "shall not be deemed to be a part of the District government . . . ." Id. §12272(4) (1999 Repl.).VI-46 Accordingly, the Mayor could not delegate his gift acceptance authority to Bob JONES to solicit and accept contributions on behalf of the District government.
However, because the Mayor is authorized to host receptions through his ceremonial authority, he may have been able to expend funds allotted to the Ceremonial Fund. If he had elected to follow this route, he would have been required to ensure that the funds expended were accounted for, subject to audit, and published in an annual report. D.C. Code §§1-355(d) and (e) (1999 Repl.).
2. The Mayor's Solicitation of LockheedIn his interview with the OIG, the president and CEO of Lockheed (BROPHY) stated that the Mayor approached him at a social function in the spring of 2000, and asked if Lockheed would be willing to "help out" with the Mayoral events at the RNC and DNC. Mayor WILLIAMS, through his attorney, corroborated BROPHY's statement; however, the Mayor characterized the solicitation as "encouraging Lockheed to contribute to the cost of civic and non-partisan as receptions, to showcase the District of Columbia at the 2000 Republican National and Democratic National conventions." (Ex. WFC 32) BROPHY stated that he agreed to the Mayor's request and was contacted shortly thereafter by Bob JONES in regard to Lockheed's sponsorship. Lockheed paid the vendors directly, and its contribution was neither deposited into a government account nor was a public accounting made of the acceptance and use of the same.
As stated above, the Mayor is authorized by the Appropriations Act to accept and use donations made to the District government as long as certain conditions are met. Given that the RNC and DNC events could arguably have been funded through the Ceremonial Fund, the solicitation appears to have met the requirement that the contribution must be used to carry out an authorized function of the EOM. See D.C. Appropriations Act, 2000, Supra.
The Mayor does not have the authority, however, to act in his official capacity and solicit and use donations that are not formally accepted by the government and deposited into the appropriate government account. See D.C. Code §47-130 (Supp. 1999) ("All money received by any agency, officer, or employee of the District in its or his official capacity shall belong to the District government and shall be paid promptly to the Mayor for deposit in the appropriate fund . . . ."). Moreover, his gift acceptance authority under the Appropriations Act is qualified to those donations that are accounted for and publicly documented. If the specific authority relied upon for the solicitation was Section 125 of the Appropriations Act, then federal law was violated in that there was no accounting or public disclosure of the donation; District law was violated, too, in that the funds were not placed in a government account.
These accounting and disclosure failures are compounded by Lockheed's status as a major contractor with the District government. Indeed, at the time of the Mayor's solicitation, Lockheed had a contractual relationship with the District worth over $80 million. Because the Mayor requested a substantial monetary contribution from a major District contractor, and failed to ensure that mandatory accounting and public disclosure requirements were followed, Mayor WILLIAMS created the appearance of impropriety in violation of the Standards of Conduct. See D.C. Code §1-619.1 (a) (1999 Repl.) (mandating strict adherence to ethical conduct in the performance of official duties and avoidance of any official action that adversely affects the public's confidence in government integrity); see also DPM §1800.1 (requiring District employees to avoid taking any official action which adversely affects the public's confidence in governmental integrity) and §1803.1 (f) (same). Based upon Lockheed's status as a "prohibited source," the Mayor's solicitation may have violated DPM §1803.2 as well. As was the case with many of the EOM's solicitations detailed in this report, the Mayor's fundraising activity failed to adhere to the statutory contingencies placed upon his ability to solicit and accept donations. Therefore, his solicitation could arguably be classified as falling outside government business and, therefore, a private action.VI-47
However, as noted elsewhere in this report, the issue presented in this case has not been formally settled by OCC or OCF - whether an employee's failure to ensure an accounting of funds (a required by the Appropriations Act), when the funds are solicited during the course of government employment, shifts the employee's fundraising outside his/her official capacity, thereby becoming a private activity. If such a technical failure places the government employee into his/her private capacity, then a number of Standards of Conduct in the DPM apply to his/her actions.
Indeed, the Mayor has recently stated in Mayor's Mem. 2002-1, "Rules of Conduct Governing Donations to the District Government," that a failure to follow the rules when soliciting or accepting donations on behalf of the District government takes a government employee's actions outside the scope of official activity, thereby exposing the employee to possibly violating the DPM and other regulations that apply to misconduct in an employee's official as well as private capacity.
Therefore, if it is determined that the Mayor was in his private capacity when he made the solicitation because the gift acceptance law was not followed, he may have been in violation of DPM §1803.2. Similarly, if this interpretation is applied, DPM §1804.1(b) (prohibiting the use of government time/resources for private activities) and §1804.1(i) (prohibiting government employees from engaging in private business activity or other interest which violates federal or District law).
At the very least, the EOM should have sought legal advice concerning the propriety of requesting a sizable cash donation, which was undisclosed, from one of the District's largest contractors. In sum, the Mayor's solicitation cast an unfavorable light on government operations by giving the appearance of partiality, thereby adversely affecting the public's confidence in the integrity of the District government.
The Office of Campaign Finance (OCF) is charged with enforcement responsibility for violations of the Standards of Conduct for certain District government personnel, including the Mayor. DPM §1802.1(a). Therefore, the OIG will refer this finding to OCF for its consideration.
3. Council Member BRAZIL'S Solicitation of Verizon
Similar to the executive branch, the activities of members of the Council are regulated by the, Standards of Conduct. D.C. Code §1-602.2(1) (1999 Repl.) ("The Mayor and each member of the Council of the District of Columbia . . . are covered by the provisions of subchapter XIX [Employee Conduct) . . . of this chapter . . . ."). The analysis, then, of Council member Brazil's solicitation of Verizon is similar to that given in the above section regarding Mayor WILLIAMS' solicitation of Lockheed.
As stated in the Background Section of this narrative, Council member BRAZIL contacted one of the directors of Verizon to request that Verizon fund an evening reception at the DNC. Under, the D.C. Appropriations Act, 2000, Council has the authority to accept and use gifts without the Mayor's approval. D.C. Appropriations Act, 2000, Supra, §125(a)(2). Council is also allotted a Ceremonial Fund to be used for the same purposes as the Mayor's Ceremonial Fund. D.C., Code §1-355(b) (1999 Repl.). Accordingly, hosting a reception for congressional leaders and other government officials may fall within the parameters of the Council's Ceremonial Fund. It follows, then, that if Council member BRAZIL was relying upon the Council's gift acceptance authority in this instance, he may have been authorized to do so since the "reception and entertainment" of federal, state, and local officials in other jurisdictions appears to be one of Council's authorized functions.VI-48
Verizon's contribution abridged federal and District law because it was not deposited into the District Treasury and it was neither accounted for nor documented in a public report. By soliciting a substantial monetary contribution from an entity conducting business with the District government, under circumstances where there is no public accountability or disclosure, Council member BRAZIL created the appearance of impropriety in violation of D.C. Code §1619.1(a) (1999 Repl.) and DPM §§1800.1 and 1803.1(f).
In addition, similar to the Mayor's solicitation of Lockheed, BRAZIL's fundraising activity may have been a private action, thereby subjecting him to the DPM because Verizon engages in business activity with the District government and may be considered a "prohibited source" under DPM §1803.2. Other Standards of Conduct provisions regarding outside activities may apply as well. See, e.g., DPM §1804.1 (b) (banning government time/resources for private activities) and §1804.1(i) (disallowing government employees from engaging in private business activity or other interest that violates federal or District law).
We note that BRAZIL did not solicit on behalf of a non-profit or other private entity, but in connection with his, and during the course of his employment with the District government. As stated supra, this matter will require OCF's scrutiny because the issue is unsettled at this time and will be so referred for its determination.VI-49
4. Bob JONES and WFC
This investigation revealed that the Mayor neither properly invoked his gift acceptance authority under the Appropriations Act nor made expenditures from the Ceremonial Fund for the RNC and DNC events. Consequently, he was left with one option to raise money to support these endeavors - the non-profit entity operating independently from government employees.
Mayor's Mem. 91-11, dated March 5, 1991, is instructive in understanding the method by which the District government may work with private groups to use donations to fund government activities:
Private entities (such as non-profit corporations) may, on their own, raise and spend funds to support or complement government activities or activities jointly sponsored by the government and the private entity, if such funds are not at any point in the possession or control of a District officer, employee or agency.
Mayor's Mem. 91-11 at 2. Indeed, the District may even "encourage private entities to undertake efforts in support of the government's activities." Id. This is essentially what the Mayor did when he requested Bob JONES' assistance in his February 2000 letter. At the time, Bob JONES was a director for WFC whose single mission was to provide support to the District government and the EOM's activities. (See Ex. WFC 3) As long as the funds raised by the nonprofit are not at any time under the control of the District government or one of its employees, this arrangement is acceptable. See Office of Campaign Finance Interpretative Opinion 01-02, dated February 2, 2001 ("The D.C. Campaign Finance Act does not preclude a group of citizens from forming a conunittee, foundation or corporation, and inviting the support of the Mayor, where the activity is coordinated outside the Office of the Mayor, and the Mayor does not control the fundraising operations or the funds contributed.").
For the most part, District government employees did not exert any control over the involved nonprofit or otherwise solicit contributions for the same, with one exception -- Leonard MANNING's contribution for the DNC luncheon reception.
5. MANNING's Contribution
As stated above, Leonard MANNING sponsored a luncheon reception at the DNC for the D.C. Delegation by contributing $2,374.25 to pay for the catering expenses. MANNING is the Chief Executive Officer of LTE, a for-profit corporation that has a contractual relationship with the DCLB. It is clear that he coordinated the event with Mark JONES of the EOM. However, it is unclear whether his contribution was volunteered or solicited; while TUCKER asserted that he solicited MANNING at Mark JONES' instruction, MANNING flatly denies that anyone solicited his contribution.VI-50
Despite the contradiction, the DPM Standards still apply. District government employees, acting in their private capacities, may not solicit or accept contributions from those who contract with the District, conduct business with the District, or are regulated by the District. DPM §1803.2. Mark JONES accepted a contribution from a District contractor, whose donated funds went directly to the vendor, thereby bypassing a government account and accounting procedures. In addition, Mark JONES accepted the donation while on leave from his District government employment. Therefore, he acted in his private capacity in accepting MANNING's donation and violated DPM §1803.2(a) in the process.
6. Sports Commission's Contribution
Bob JONES solicited the Chair of the Sports Commission for a contribution to the mayoral activities at the conventions in exchange for allowing the Commission to promote its campaign to bring a baseball franchise to the District of Columbia. The Commission donated $20,000 to WFC, which, according to Bob JONES, was used to pay for the transportation costs for the Mayor and his wife to attend the conventions.
The Commission's donation appears to fall within its statutory authority to generally promote the District as a venue for sporting events and to operate sports franchises in the city. See D.C. Code §§2-4003(1) and (6) (Supp. 1999). Because the donation was not solicited or received by a
District government employee, the Standards of Conduct prohibitions regarding the receipt of donations by government employees acting in their private capacities and the conflicts regarding public and private interests do not apply. See DPM §1803.2.
7. Hatch Act Issues
In general, the Hatch Act (5 U.S.C.A. §§7321-7326 (West 1996 & Supp. 1999)) prohibits employees of the District of Columbia government from soliciting/accepting political contributions or engaging in political activities while on official duty. Id. §§7323-7324. The penalties for Hatch Act violations are removal or suspension without pay for at least 30 days. Id. §7326.
The Mayor and members of the D.C. Council are excluded from the coverage of the Hatch Act. 5 U.S.C. §7322(1)(C) ("'[E]mployee' means any individual . . . employed or holding office in. . . the government of the District of Columbia, other than the Mayor or a member of the City Council or the Recorder of Deeds . . . ."). In addition, employees of the Sports Commission (except Armory Board employees hired before August 23, 1994) are not considered District government employees. D.C. Code §2-4017 (Supp. 1999).VI-51
The OIG's investigation revealed that Mark JONES, Lamont MITCHELL, Darlene TAYLOR, and James WARECK attended the RNC luncheon reception on August 1, 2000. MITCHELL and TAYLOR did not take leave on that date. Because these EOM employees attended and participated in a partisan political event while on official duty, it appears that they may have violated the Hatch Act. Mark JONES was on administrative leave, which is defined by the DPM as "an excused absence from duty without loss of pay and without charge to leave." DPM Chapter 12, Subpart 1.3.
The OIG consulted with the Office of Special Counsel (OSC) earlier in the conduct of this investigation. OSC subsequently determined that once Mark JONES was separated from his position with the District government, he no longer met the definition of employee and OSC therefore lacked jurisdiction to pursue enforcement measures against him. TAYLOR, like Mark JONES, is no longer employed with the District government. MITCHELL, however, remains employed by the District government. Notwithstanding TAYLOR's status as a former District government employee, the OIG will forward these issues concerning MITCHELL and TAYLOR to the OSC for final determination, as the OIG lacks jurisdiction to render an opinion or decide the outcome of this matter.NOTE: Attached as the final Exhibit is the donor list for this event (Ex. WFC 33)
IV. MAYORAL RECEPTION FOR THE CONGRESSIONAL BLACK CAUCUS
On the evening of September 13, 2000, Mayor Anthony A. WILLIAMS hosted a reception to honor members of the Congressional Black Caucus (CBC) during their 30th Annual Legislative Conference, and to acknowledge Congressional leaders who have supported the revitalization of the District of Columbia. The event was held at the "BET on Jazz" restaurant located at 730 11th Street, N.W., Washington, D.C., and the invitees included several United States Congressmen, District of Columbia Council members, District employees, and other prominent figures in the community.
Mark JONES, former Deputy Chief of Staff for External Affairs, Executive Office of the Mayor (EOM), Darlene TAYLOR, former Director for Intergovernmental Affairs, EOM, and Joy ARNOLD, then Confidential Assistant to Mayor WILLIAMS, EOM, were responsible for handling logistics, which included securing a source of funding to subsidize any expenses incurred to produce the event.
TAYLOR informed the OIG that her duties as Director of Intergovernmental Affairs included the management of national, congressional, and council affairs for Mayor WILLIAMS, and her efforts in planning this event were within the purview of her office because the CBC was one of her assigned constituency groups. She assumed the primary role of securing financial subsistence by communicating with potential donors. She devised and circulated letters directly from the Office of the Mayor requesting "sponsorship" on District government Executive Office letterhead, indicating that Mayor WILLIAMS was personally extending an invitation to acknowledge the CBC for its efforts in supporting the revitalization of the District of Columbia. (Ex. CBC 1)
Some of the donors included Potomac Electric Power Company (PEPCO), Bank of America, Verizon, Federal Express, and the Fannie Mae Foundation. TAYLOR stated that each of the donors currently maintains, or maintained, a contractual relationship with the District government. Representatives from the aforementioned corporate entities were among the invitees. TAYLOR stated that there was no bank account established for the receipt of funds, nor were there any nonprofit organizations used to fund this event. Therefore, the donors received explicit instructions to make their checks payable directly to the restaurant.
TAYLOR said that she, along with ARNOLD, served as a point-of-contact for BET on Jazz leading up to the date of the event. They dealt exclusively with Kathleen SHIELDS, Special Events Coordinator for the restaurant.
The nature of TAYLOR's responsibilities required her to report directly to JONES and Dr. Abdusalam OMER, former Chief of Staff for External Affairs, EOM, but she never indicated that she received authorization to solicit funds for this event from either individual. Furthermore, TAYLOR informed the OIG that solicitation activity was performed on official government time, while consuming District government resources, and at least one contribution was retrieved on government time.
TAYLOR said she and ARNOLD routinely informed JONES and Dr. OMER of their progress, and solicited their assistance whenever they encountered any difficulties. She constantly expressed her concerns to JONES that not enough money was being raised to subsidize the anticipated costs for the affair. She recalled one instance when JONES contacted BET officials and made a payment with a credit card; she could not provide any further details as to the amount of the payment, or if JONES was the owner of the credit card used to complete the transaction.
ARNOLD minimized her participation indicating that she assumed a minor role in planning the reception by merely assisting TAYLOR. She further stated that all of the fundraising responsibilities were placed on TAYLOR and JONES.
SHIELDS informed the OIG that between August 2, 2000, and September 13, 2000, she dealt exclusively with ARNOLD pertaining to the event. On August 29, 2000, SHIELDS met with ARNOLD who signed the Event Contract identifying herself as the Booking Contact, and Mayor WILLIAMS as the Client/Organization. As per the contract, the total cost of the event was $28,513.50. During this meeting, SHIELDS informed ARNOLD that the restaurant required a 50% deposit before the date of the event. ARNOLD presented her with a check from PEPCO in the amount of $7,500 and instructed her to apply it toward the deposit for the event.
On September 2, 2000, SHIELDS contacted ARNOLD in reference to additional funds for the deposit. ARNOLD provided her with a personal credit card number belonging to Leonard MANNING, Chief Executive Officer of Lottery Technology Enterprises (LTE), and informed her that MANNING would be contacting her to authorize a charge in the amount of $3,000 toward the deposit for the event. On that same day SHIELDS said MANNING contacted her and confirmed the authorization; on September 13, 2000, the transaction was finalized at the restaurant. On the evening of the event, SHIELDS also received a check in the amount of $1,500 from the Church Association for Community Services (CACS) (Ex. CBC 2); however, she failed to mention who provided her with the check.
SHIELDS said that the District government fell short of the required 50% deposit so she referred the account to her supervisor, Derrick NEWTON, Vice President for Restaurant Operations, RLJ Restaurants of D.C., LLC (owner and operator of BET on Jazz Supper Club) for further action. NEWTON advised that, at the conclusion of the reception, he dealt exclusively with TAYLOR while trying to resolve the outstanding balance the EOM had with the restaurant. TAYLOR assured him that the balance would be settled by September 15, 2000.
On September 15, 2000, TAYLOR arranged to have a check issued by Federal Express in the amount of $2,000.00 delivered to his office. During further conversations on September 27, 2000, and October 4, 2000, TAYLOR informed NEWTON that Bank of America would also be remitting a check for an undisclosed amount.
On October 4, 2000, a check was received from the Fannie Mae Foundation in the amount of $5,000; on October 22, 2000, an additional check was received from Bank of America in the same amount. This was the last remittance as of this reporting date, leaving a balance of $4,513.50.
On November 15, 2000, December 27, 2000, and January 2, 2001, notices were sent via facsimile to Thomas TUCKER, former Special Assistant to the Deputy Chief of Staff for External Affairs, EOM, regarding the outstanding balance. The EOM failed to respond each time. NEWTON reported that on or about March 14, 2001, he received a telephone call from someone in the Mayor's office who identified herself as "Tabitha." She requested a copy of the event contract for the reception. NEWTON remitted a copy of the contract and an invoice for the outstanding balance. As of this reporting date, there has been no further contact between the EOM and BET on Jazz, which has since ceased operations.
2. EOM Solicitation of Funding
According to documentation received by the OIG, a total of $24,000 was solicited in support of the reception.
[a. FedEx Contribution]
According to an executive level employee with Federal Express Inc. (FedEx), TAYLOR contacted her in August 2000 and requested a contribution to the CBC reception hosted by Mayor WILLIAMS. The FedEx employee advised that she met TAYLOR at an event a few months prior and advised her to follow-up the request with written documentation. An Executive Assistant with FedEx informed the OIG that she followed-up with TAYLOR to determine where, and to whom, to address the check.
FedEx made previous donations to the CBC but had not contributed to Mayor WILLIAMS or any District government event. FedEx had no contractual relationship with the District of Columbia government, but is regulated by the District as a foreign corporation. Furthermore, the FedEx employee advised that neither she nor FedEx were promised anything from the District government in exchange for their contribution.
The FedEx employee further stated that when most solicitations are made, several office lobbyists meet to discuss the particulars of the request (i.e., event, cause, amount, etc.), and to determine the status, if any, of FedEx's financial participation. However, ADAMS alone made the decision to approve this request because FedEx had supported the CBC in the past. Subsequently, the request was forwarded to the Accounting Division in Memphis, Tennessee, where the check was processed and returned to ADAMS.
The FedEx employee said she attended the event and stated that several members of Congress were present along with Mayor WILLIAMS, TAYLOR, and Robert JOHNSON, Chief Executive Officer, BET. Finally, the employee recalled that, to her knowledge, no political contributions of any kind were taken at the event.
b. Bank of America ContributionAn executive level employee with the Bank of America (BA) stated that in August 2000 TAYLOR contacted her regarding a request for a contribution to the CBC reception. The BA employee advised that she and TAYLOR were business associates who shared a common professional bond of working in intergovernmental affairs. She requested that TAYLOR put the request in writing, and TAYLOR complied.
BA's policies and procedures for an approved solicitation require a written request stating the desired amount, the solicitor's tax identification number, and approval by Sponsorship Manager. The interviewed BA employee advised that BA did not make contributions to events but they did provide sponsorships. She further explained that when monetary requests were made for events, BA referred to them as sponsorships; however, when requests were made for non-profit organizations, they were referred to as contributions.According to the BA executive, she felt pressured into making the sponsorship because of the excessive telephone calls she received from TAYLOR. During a conversation with TAYLOR, she questioned why there was no specific amount mentioned or any indication in the letter to inform the contributor of whom to address the check. The BA executive said TAYLOR responded by stating that the EOM usually had the money directed. through a church or a nonprofit organization because the Mayor could not directly accept funds. The BA executive could not recall if TAYLOR mentioned a specific church or non-profit organization.
The BA executive requested a range of committed contributions from TAYLOR because she intended to base BA's sponsorship on the minirnum amount. TAYLOR told her that the amounts ranged from $5,000 to $20,000. After the request was approved, she sent a $5,000 check made payable to BET.
Finally, the BA executive stated that BA has a contractual relationship with the District government to monitor the District's payroll management, and she received several tickets to the event for her sponsorship and did attend. She did not recall any further solicitations being made at the event.
c. MANNING'S Loan
Leonard SING advised that in early September 2000, JONES advised him of a reception that was scheduled to take place at the BET on Jazz restaurant and asked him to make a donation. MANNING informed JONES that he was "tapped out" and not interested in making a donation due to the fact that on August 14, 2000, MANNING traveled to the Democratic National Convention (DNC) in Los Angeles, California, and personally subsidized the cost for a luncheon for the District of Columbia delegates in attendance. (MANNING MOI, March 19, 2001, at 2) MANNING paid for the DNC luncheon at the request of JONES. As a result, JONES then asked MANNING to make a loan in support of the CBC event. MANNING complied and authorized a charge in the amount of $3,000 to a personal credit card, with the expectation of getting reimbursed at a later date. (Ex. CBC 3)
3. Irregular Transactions
a. Check submitted to BET on Jazz from the Church Association for Community Services (CACS) dated September 13, 2000, in the amount of $1,500.
On the morning of September 13, 2000, a meeting was held in JONES' office to discuss the subject of raising more money in order to meet the required 50% deposit ($14,000) for the reception. JONES, Dr. OMER, and TAYLOR attended the meeting. As alternative fundraising conduits were being discussed, Dr. OMER produced an envelope containing $1,500 in cash, handed it to TAYLOR, and told her that this was money that he received from JONES while attending the DNC in Los Angeles.
JONES alleged that while attending the DNC, Dr. OMER constantly pressured him for money for unspecified reasons. On August 17, 2000, JONES received an electronic money transfer in the amount of $1,500 from Esther BAILEY, which he claims to have given directly to Dr. OMER.
Based on numerous interviews it was determined that this money was generated through the efforts of JONES who sought to subsidize EOM personnel travel expenses to the DNC. JONES solicited money through the non-profit CACS and deposited the funds into the CACS Conference Account. The sole purpose of the CACS Conference Account was to serve as a repository for funds raised in support of the April 2000 Faith-Based Economic Conference and Mayor's Prayer Breakfast.
BAILEY stated that she made the transfer of her personal funds at the request of Reverend Frank TUCKER, President, CACS. BAILEY, a parishioner at Rev. TUCKER's First Baptist Church, was reimbursed by a check from the CACS Conference Account. Both Rev. TUCKER and JONES have signature authority on the account.
When TAYLOR informed JONES that the restaurant would not accept cash, he instructed her to take the money to an individual who worked at 941 North Capitol Street, N.W., WDC, and have the cash converted into a check. That individual is believed to be Douglas FOSTER, Special Assistant to the Land and Buildings Administrator, District of Columbia Department of Consumer and Regulatory Affairs (DCRA). At the time, FOSTER was in possession of the CACS Conference Account checks preauthorized by JONES. It was further alleged that FOSTER located Rev. TUCKER as he was presiding over a funeral and asked him to coauthorize the above-referenced check to BET on Jazz. (Ex. CBC 2)
FOSTER indicated, through his legal representative, that he could not corroborate this account, and Rev. TUCKER refused to be interviewed further.
b. Loan from MANNING to JONES
For the Kids Foundation, Inc. (FTK), was a non-profit organization created by JONES, and its stated purpose was to serve the needs of children in the District of Columbia. On January 16, 2001, a check was issued by FTK to Leonard MANNING in the amount of $1,500. (Ex. CBC 4) Vivian BYRD, Treasurer, FTK, stated that JONES instructed her to produce the check for MANNING and failed to provide any further information regarding the reason for the expenditure. When asked by interviewing agents if he ever received any money from a nonprofit organization, MANNING stated that he had not. When shown a copy of the subject FTK check, MANNING informed the OIG that it was for a final repayment of a loan to JONES. MANNING then stated that the aforementioned $3,000 loan was the first and only transaction of this nature involving JONES. MANNING did not provide any information regarding when or how JONES repaid the other $1,500.MANNING maintains a "sole source" type contract to provide information technology services to the District of Columbia Lottery and Charitable Games Board (DCLB). LTE processes every individual lottery ticket sold in the District of Columbia and its profit margin is realized on a percentage of every individual ticket sale, thus making LTE one of the largest and more profitable contractors to the District government:
The EOM could have financed this type of event by using appropriated funds, such as money allotted to the Mayor's Ceremonial Fund. According to JONES, however, the Mayor intended for this and other events to be funded privately: "his [the Mayor's] main goal was not to use public funds, which we didn't." (JONES Tr. II at 20) When interviewed by the OIG, Mayor WILLIAMS confirmed JONES' understanding of the Mayor's plan to foster public-private partnerships: "[m]y 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)In an effort to avoid using appropriated funds, such as the Ceremonial Fund, the EOM had other options: 1) use contributions made to the Mayor's Constituent Services Fund; 2) use the Mayor's gift acceptance authority as set forth in the Appropriations Act (see, e.g., District of Columbia Appropriations Act, 2000, Pub. L. No. 106-113, §125, 113 stat 1501, 1516 (1999)) and the D.C. Code to solicit and accept monetary or other contributions; or 3) allow a non-profit entity to organize, fund, and manage the event independently of the EOM.
Unfortunately, EOM employees did not comply with the requirements of any of the above fundraising methods for this event. In fact, it is difficult to determine whether the EOM knew exactly what authority they were relying on to conduct their fundraising activities for the CBC Reception. However, given the Mayor's statements that he informally delegated his authority, granted by Congress, to accept donations to Dr. OMER and others, JONES and his assistants most closely approximated the second of these options to fund this event.
By not involving a non-profit in the fundraising for the reception, the EOM avoided many of the public-private entanglements found in the other events described in this report.VI-52 Unlike other events the EOM produced, the reception was not funded by the solicitation of donations through a non-profit entity. Due to the "ceremonial" nature of the event, the Mayor might have been authorized to solicit funds for the reception through his gift acceptance authority as delineated in the Appropriations Act. However, the EOM failed to adhere to appropriate laws and procedures required for this process and, as a result, their activities ran afoul of several District Personnel Regulations.
1. The Ceremonial Fund
Pursuant to D.C. Code §1-356(a) (1999 Repl.), the Mayor may expend appropriated funds related to his offcial capacityVI-53 as Mayor within the specified amount and purpose for which those funds are appropriated, as the Mayor deems necessary. D.C. Code §1-355(a) (1999 Repl.) appropriates $25,000 per fiscal year to the Mayor to use for the "reception and entertainment" of eminent persons. However, the total cost of the reception ($28,513.50) exceeded the Ceremonial Fund's $25,000 per fiscal year cap. This, the general practice of not depleting the entire Fund on a single event coupled with the Mayor's desire to avoid using public funds, dissuaded the EOM from considering this source of funding. It is significant to note that, because the ceremonial fund could have been used, the Mayor's authority to accept donations, delegated to his staff, might have qualified as an appropriate use of the money ("to carry out an authorized function or duty") had the EOM staff followed the federal guidelines designed to ensure that such donations are accounted for and appropriately spent.
2. The Constituent Services Fund
While the Constituent Services Fund's more generous cap of $40,000 per calendar pear may have made it a more desirable source of funding for receptions designed to promote the socioeconomic revitalization of the District of Columbia, it posed one major drawback in this instance - the statute prohibits government employees from conducting fundraising activities for the Constituent Services Fund on government time. D.C. Code §§1,-1443(a) and (e) (1999 Repl.). In addition, the EOM would have to report all contributions to and expenditures from the fund to the Director of Campaign Finance in a quarterly report and ensure that no political activity was conducted in association with the event. Id. §§11443(a) and (d).
Finally, the Mayor's Constituent Services Fund may only be used for "citizen-service programs" and, thus, its use is limited to services and programs for District residents.
3. Appropriations Act Gift Acceptance AuthorityAs stated supra, the Mayor is authorized by statute to expend funds for the reception and entertainment of government dignitaries and other eminent persons. If a reception to recognize the contributions of the Congressional Black Caucus was categorized by the Office of the Corporation Counsel (OCC) as an "authorized function"54 of the Mayor's Office, it would be in accord with the Mayor's gift acceptance authority. As a result, the Mayor might have been authorized to solicit contributions and expend funds for the reception pursuant to his gift acceptance authority under the Appropriations Act. However, the Mayor's gift acceptance authority is not unfettered and must be exercised in a manner that ensures full disclosure and accountability of funds. Indeed, the D.C. Appropriations Act, 2000, supra. required the EOM to keep "accurate and detailed records of the acceptance and use of any gift or donation" that the Mayor approves and make these records "available for audit and public inspection." Id. Unfortunately, the EOM failed to account for the donations solicited to fund this event and a report was not created for the benefit of the public or that of Congress.
4. Fundraising Issues Raised by the CBC ReceptionGovernment employees subordinate to the Mayor, including those within the EOM, may engage in fundraising in their official capacities only through statutory authority or by delegation of the Mayor's authority via Mayor's Order. OCC Opinion AL-O1-062, January 26, 2001, at 4 ("[A]bsent a statute, generally a District government employee may not engage in fundraising as an official activity.").
Although JONES and TAYLOR did not have statutory authority to accept donations, the Mayor, absent any prohibition in the Appropriations Act, could have delegated his authority under the Appropriations Act to them See D.C. Code §1-242(6) (1999 Repl.). Since the Mayor initially wanted to commemorate the CBC's 30 years of existence, it may reasonably be inferred that the Mayor was aware that TAYLOR and JONES were involved in fundraising activities on his behalf to fund and produce the CBC reception. Moreover, during his interview with the OIG, the Mayor advised that he informally delegated his gift acceptance authority to Dr. OMER (who sub-delegated it to JONES) to further his public-private partnerships. He noted also that it was his understanding that Dr. OMER and JONES would ensure that they adhered to the appropriate legal requirements in implementing the solicitation and receipt of donations on behalf of the EOM. However, the Mayor acknowledged in his interview that he did not reduce this delegation to writing. Had the delegation been in writing, in the form of a Mayor's Order, not only would doubt be eliminated as to who had authority to accept donations, but the Order, with attendant legal review, could be expected to state the legal authority and restrictions on the delegation.
More problematic than the informality of the delegation was the failure of the Mayor's staff to seek legal advice concerning the rather complicated statutory requirements that must be strictly adhered to whenever the Mayor exercises his authority to accept gifts. If legal advice had been obtained, the EOM may not have failed to maintain a public record of the donations solicited from the donors for the reception.
Furthermore, for accounting purposes, the EOM was required by law to ensure that the solicited contributions were deposited into the appropriate government fund. D.C. Code §47-130 (1997 Repl.& Supp. 1999). The EOM did not deposit the solicited contributions into a government fund. Again, this failure may have been avoided if the EOM had sought legal advice during the planning stage for the event.
It should be noted that the failure to follow federal and District law governing donations was not a minor procedural oversight. The requirements of the Appropriations Act establish necessary safeguards against violations of various statutes (e.g., Anti-Deficiency violations, 55 campaign finance laws, 56 tax laws, and criminal violations regarding theft of property). While we did not find evidence sufficient to establish criminal violations involving misrepresentation, theft, or embezzlement during the investigation conducted concerning this event, we did find that the EOM staff clearly violated the procedures set in place by Congress in the Appropriations Act to limit and control fundraising by the Mayor. The issue of whether a violation of §125 of the D.C. Appropriations Act, 2000 constitutes a violation of the federal Anti-Deficiency Act as well should be referred to the Chief Financial Officer and the Corporation Counsel.
5. DPM Violations
The EOM staff went beyond the authority that may have been delegated, formally or informally, to them by failing to adhere to the statutory contingencies placed upon the Mayor's ability to accept donations. Thus, while individual employees may have considered fundraising as "part of the job," the solicitations for this event could arguably be classified as falling outside government business, and thus may be considered to be private actions. If the failure to adhere to requisite legal constraints during the course of government fundraising places employees into their private capacities, a number of Standards of Conduct in the District Personnel Manual apply to their fundraising activities.VI-57
For instance, if this strict interpretation of the law is to be followed, then JONES may have violated DPM §§1803.2 (a) and (b), which prohibits the solicitation and acceptance of gifts (or other things of value) from those who have contractual relationships with or are regulated by the District, by soliciting and accepting a "loan" from Leonard MANNING. According to the D.C. Ethics Officer, DPM §1803.2 applies to an employee's fundraising activities done within an employee's private capacity. See D.C. City Council Committee On Government Operations Pub. Oversight Hearing, December 3, 2001, Tr. @ 6263. However, there is a void of legal authority from OCC and OCF on this issue where a government employee - without the involvement of a non-profit - solicits a donation from a "prohibited source" on behalf of the government during the course of his/her official duties, but fails to properly account for the donation or channel the same into a government fund.VI-58
Similarly, if the strict interpretation is followed, JONES and other EOM employees may have also violated DPM §1804.1(b), which prohibits the use of government time/resources for private activities, and DPM §1804.1(i), "[e]ngaging in any outside employment, private business activity, or other interest which is in violation of federal or District law."Because it is beyond the jurisdiction of the OIG to render legal opinions on this and other issues, we will forward this issue to OCF and OCC for a final determination.
Irrespective of the official vs. private distinction, the failure to provide a public record and otherwise account for the donations, coupled with the aggressive manner by which JONES solicited contributions for this event, implicated other Standards of Conduct. Indeed, the investigation conducted concerning this event uncovered instances in which donors expressed their exasperation with the persistence and pressure associated with the solicitations made by EOM employees: MANNING advised JONES that he was "tapped out" and made a loan rather than a donation; a Bank of America employee complained that she felt pressured by TAYLOR into making the sponsorship. Such tactics on the part of government employees, especially when soliciting money from entities that are currently regulated by or under contract with the District, constituted official actions taken well outside official channels, thereby impugning governmental integrity and otherwise adversely affecting the public's confidence in governmental integrity. See D.C. Code §1-619.1 (a) (1999 Repl.) (mandating strict adherence to ethical conduct in the performance of official duties and avoidance of any official action that adversely affects the public's confidence in government integrity); see also DPM §1800.1 (requiring District employees to avoid taking any official action which adversely affects the public's confidence in governmental integrity), §1803.1(f) (same), and §1803.1(e) (avoiding making government decisions outside official channels).
While the CBC Reception may be categorized as a civic function, it was not open to the general public. Many of the invitees conduct business with the District and/or provide political support to the Mayor. The rationale for inviting representatives from the U.S. Congress, D.C. Council, and the business community is understandable given the realm of influence the Congressional Black Caucus exerts, particularly in the District of Columbia. On the other hand, because there was the appearance to many, including the media, that the event had an unstated political purpose, the integrity of the District government was jeopardized by involving District government employees in the planning of such an activity. See D.C. Code §1-619.1(a) (1999 Repl.); see also DPM §§1800.1 and 1803.1(f). It must be noted, however, that this investigation did not uncover any evidence that government employees solicited or received political contributions during the event or otherwise engaged in political activity while on duty in violation of the Hatch Act. See 5 U.S.C.A. §§7322-7323 (West 1996 & Supp. 1999).
NOTE: Attached as a final Exhibit is the donor list for this event. (Ex. CBC 5)
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