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Gray Campaign Aide Admits to Shadow Campaign

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A DC Public Relations executive has plead guilty to charges that she funneled more than $500,000 to a shadow campaign during Vincent Gray's 2010 mayoral campaign.

A campaign aide to D.C. Mayor Vincent Gray has admitted in federal court that Gray was elected in 2010 with the aid of hundreds of thousands of dollars in illicit campaign funds from a D.C. businessman.

Federal prosecutors laid out their case Tuesday against Eugenia (Jeanne) Clarke Harris, 75, who was charged Monday in the ongoing criminal investigation into Gray's 2010 campaign.

On Tuesday, prosecutors said that $653,000 was spent on a shadow campaign to elect Gray.  This is the first public acknowledgement of an alleged extensive shadow campaign on Gray's behalf, according to News4's Tom Sherwood.  Prosecutors said the alleged shadow campaign funneled the money through her two businesses.

"The 2010 mayoral election was corrupted by a massive infusion of cash that was illegally concealed from the voters in the District," said U.S. Attorney Ron Machen Jr.

There has been no indication in court that Gray knew about the alleged campaign.

A federal judge accepted Harris's guilty plea Tuesday afternoon on three counts -- two charges of conspiracy and one count of making a false statement to investigators. Two of the three charges are felonies.  She could receive 30 to 37 months in prison and a fine between $6,000 and $60,000. Harris agreed to make restitution to the IRS for taxes, interest and penalties owed by herself and her businesses.

Among other things, federal officials said she admitted filing an amended tax return in December 2011 as part of an effort to conceal her businesses’ involvement in funding hundreds of thousands of dollars in campaign-related expenditures for the 2010 mayoral campaign. In addition, she admitted to causing others to destroy a large volume of records from her businesses because they could have revealed the extent of her involvement in the mayoral election.

The U.S. Attorney’s Office for the District of Columbia, the FBI’s Washington Field Office and the Internal Revenue Service - Criminal Investigation will hold a press conference after the court proceedings are done. NBCWashington.com will stream the press conference live.

When asked who came up with the plan for the shadow campaign, Harris said it was not her, and it was not a person known as "co-conspirator No. 1," who sources told News4 is D.C. businessman Jeffrey Thompson.

"The plan was developed by another person," Harris said in court.

In the run-up to the September 2010 primary, Fenty spent about $5 million on his campaign while Gray spent about $1.8 million.  The allegations by prosecutors on Monday indicate that another $653,000 was spent on Gray's behalf.  The judge on Tuesday referenced $127,000 spent on campaign materials and several thousand dollars used to pay for campaign field work.

In the criminal information filed Monday, prosecutors say Harris conspired to violate D.C. and federal campaign finance laws by disguising tens of thousands of dollars of contributions and reimbursing some donors in violation of those laws. Authorities say Harris also attempted to cover up the contributions after the federal investigation began.

Harris is a veteran public relations official in the District and has close ties to Gray and to Thompson. 

Earlier this year, federal authorities raided Harris’s business operation along with those of Thompson. Thompson and Harris worked closely on tens of thousands of dollars in contributions to candidates in federal and District offices. Thompson has not been charged in the investigation.

Earlier this year, two Gray campaign aides pleaded guilty to felony charges in connection with a conspiracy to give thousands of dollars to minor mayoral candidate Sulaimon Brown in exchange for his public castigation of then-Mayor Adrian Fenty.

Gray had denied wrongdoing but recently has refused to even discuss the cases.

Read the charging document by clicking here.

Below is a copy of the details released Tuesday by the U.S. Attorney's Office for the District of Columbia.

Framework of the Scheme:

According to a statement of offense signed by the government as well as the defendant, Harris owned and controlled two businesses: Belle International, Inc., and Details International, Inc., both located in an office building in Washington, D.C.

The statement of offense describes Harris’s friendship and professional relationship with a person identified as “Co-Conspirator #1,” who was the sole owner of “Company A,” and the majority owner of “Company B.”

According to the statement of offense, starting as early as 2001, and continuing until at least December 2010, Harris, “Co-Conspirator #1,” and others knowingly violated federal and D.C. campaign finance laws.


The Federal Election Campaign Act establishes limits on the amounts that individuals can contribute to individual and multi-candidate political action committees. It also prohibits a person from making a political contribution in the name of another person. The act bars a person from reimbursing a donor who has already given to a candidate. In addition, the law bans corporations from contributing money to candidates for federal public office.

The District of Columbia Campaign Finance Reform Act and Conflict of Interest Act similarly regulates financial activity intended to influence the election of candidates for District of Columbia office.

According to the statement of offense, Harris and “Co-Conspirator #1,” being aware of the finance limits, circumvented them by funneling personal and corporate money to friends, family members, and employees to make unlawful political contributions in various elections. “Co-Conspirator #1” promised to reimburse Harris for Harris’s own personal and corporate contributions as well as those that Harris obtained from others. Harris, in turn, promised others from whom she obtained contributions that their contributions would be reimbursed.


2010 Mayoral Campaign:

The statement of offense describes actions taken to channel contributions to the campaign of “Candidate A,” who was among those running for mayor in the District of Columbia in 2010.

For example, Harris, Belle International and Details International each contributed $2,000 to “Candidate A.” Harris, at the direction of “Co-Conspirator #1,” also obtained contributions to “Candidate A” from family members, employees, and friends. “Co-Conspirator #1” reimbursed Harris for the total $44,000 in campaign contributions, and Harris repaid the family members, employees and friends.

In addition, Harris and “Co-Conspirator #1,” along with others, agreed to secretly fund other efforts to support the election of “Candidate A.” They did not report these expenditures to the District of Columbia Board of Elections and Ethics’ Office of Campaign Finance, which administers and enforces laws pertaining to campaign finance.

Among other things, Harris and “Co-Conspirator #1” secretly funneled money that would be used for campaign materials, consultants, and get-out-the-vote efforts. “Co-Conspirator #1” caused “Company B” to issue checks and wire payments to Belle International, one of Harris’s companies, so that she could use her business to pay for campaign expenses. The statement of offense lists five such checks, issued between July and September 2010, that totaled $653,800 later used for services and materials to elect “Candidate A.” These materials included many items bearing logos, graphics and designs identical to those used by the campaign.

In order to conceal the various activities, and account for them on the books of “Co-Conspirator #1’s” businesses, “Co-Conspirator #1” directed Harris to submit invoices to the companies for the amounts needed for the reimbursements and campaign expenses.


Obstruction of Justice:

In her guilty plea, Harris admitted that she and “Co-Conspirator #1” took steps to impede federal officials from obtaining information concerning their involvement in conduit campaign contributions, unreported political expenditures and other activities. She admitted that she did so while knowing that the U.S. Attorney’s Office for the District of Columbia and the FBI were conducting a criminal investigation into allegations involving the 2010 mayoral campaign.

Harris filed amended tax returns, for example, in December 2011, as part of an effort to conceal the involvement of “Co-Conspirator #1” in funding hundreds of thousands of dollars in campaign-related expenditures through Belle International to “Candidate A,” in violation of District of Columbia law.

In addition, she caused others to shred and destroy a large volume of paper records maintained by her businesses. She also caused others to destroy stored electronic records from her businesses because they could have revealed what took place in the mayoral election.

Finally, at the direction of “Co-Conspirator #1,” Harris made arrangements in early 2012 to travel to Brazil for three months in order to evade federal investigators. Efforts were made toward renting a house in Brazil before the trip was cancelled.
 

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