D.C. Mayor Vincent Gray knew that his 2010 campaign received money donated illegally by a businessman with multimillion-dollar city contracts, and even asked personally for the funds, federal prosecutors alleged in court Monday.
Businessman Jeffrey Thompson, 58, pleaded guilty in federal court to conspiracy to violate D.C. and federal campaign finance laws by funneling more than $3.3 million in unreported donations to at least 28 local and national candidates and their campaigns beginning in 2006.
The candidates who benefitted from the illegal donations are not named in the court filings. However, in court, prosecutors confirmed that Gray was the person called "Mayoral Candidate A" who met with Thompson to discuss the fundraising, presented Thompson with a $425,000 "one-page budget" -- and agreed to keep the fundraising secret by referring to Thompson with the code name "Uncle Earl."
Gray also asked Thompson to pay $40,000 for improvements to a friend's home, prosecutors said. In court, Thompson acknowledged giving $40,000 to a close friend of Gray and $10,000 to a relative of Gray.
In total, Thompson -- whose company had a contract worth $300 million a year with the city -- funneled $668,800 to "a political candidate for Mayor," the charging documents say. Those documents also claim that the unreported donation was made "in coordination with" the candidate.
Gray refuted the claims in an interview and said he was innocent. “I maintain these are lies,” Gray told News4’s Tom Sherwood Monday afternoon. “These are absolute lies.”
Gray attended a mayoral forum Monday evening, just hours after the allegations surfaced. His supporters were in full force, chanting, 'Four more years!' Gray again told News4 the allegations are untrue.
U.S. Attorney Ronald Machen said in a press conference late Monday that more charges may be forthcoming as Thompson continues to help investigators. Many other candidates were implicated in Thompson's plea agreement, including a candidate for mayor in 2006, a candidate for D.C. Council At Large in 2008 and a candidate for Ward 4 council in 2007.
Also connected: candidates for Congress and a candidate for president in 2008, prosecutors said in court filings. The presidential candidate is believed to be Hillary Clinton, who has said she did not know of the fundraising and has cooperated with the investigation.
“Election after election, Jeff Thompson huddled behind closed doors with corrupt candidates, political operatives, and businessmen, devising schemes to funnel millions of dollars of corporate money into local and federal elections,” Machen said. “Today's guilty plea pulls back the curtain on years of widespread corruption. With Mr. Thompson's cooperation, we have the opportunity to hold many wrongdoers accountable and to usher in a new era of honesty, integrity, and transparency in D.C. politics.”
Gray is running for re-election campaign in D.C.'s April 1 Democratic primary for mayor; early voting starts next week.
THE CASE AGAINST THOMPSON
Thompson was charged with two felony counts of conspiracy in a criminal information filed Monday morning. He appeared in court Monday afternoon, where a judge said he faces two years in prison. If he complies fully with the terms of the plea deal, one count carrying an 18-month sentence could be dropped and he could serve a total of six months on the second count.
The sentence also could be reduced to home confinement.
Court documents allege Thompson solicited relatives, friends, employees and others to make donations to candidates and assured them he would reimburse them for these "conduit contributions" -- which he did with personal money and money from his company. On his company's books, the payments were listed as "advances" and "bonuses," prosecutors said.
Thompson's company also paid for in-kind gifts to candidates, which prosecutors called "shadow campaigns" in a detailed statement of the case against him. That included $653,000 in money for "Mayoral Campaign A" and $608,750 to the candidate for president.
The document also allege "Candidate A" met with Thompson in June 2010, when the candidate promised to use the code name, "Uncle Earl."
Gray told News4 he agreed to that because Thompson was worried then Mayor Adrian Fenty would find out Thompson was supporting Gray and interfere with Thompson's companies' contracts with the city.
“Initially he said no, that he wouldn’t raise money for the campaign,” Gray said. “He was fearful of what would happen to him because of the Fenty administration.”
“With respect to him raising money for my campaign, I thought that was being done in a perfectly legitimate fashion,” Gray said. “I’ve said that from day one and I maintain that, to my knowledge anyway, it was a perfectly legitimate experience.”
THREE-YEAR INVESTIGATION LED TO THOMPSON
A big player in both local and federal politics, Thompson owned multiple million-dollar companies with large contracts from the city. That included the most lucrative contract the city gives out, worth more than $300 million each year for Thompson's company D.C. Chartered Health Plan, to provide health care services to the city's poorest residents.
Thompson stepped down from D.C. Chartered Health Plan in April 2012, after FBI and IRS agents raided his home and office. He then left his accounting firm, Thompson, Cobb, Bazilio & Associates, in July 2012.
The investigation that led to his guilty pleas began in spring 2011, after Gray was elected. U.S. Attorney Machen began looking into whether Gray or his campaign aides secretly gave cash and checks to Sulaimon Brown, a minor candidate for mayor, in return for Brown's aggressive attacks on then-Mayor Adrian Fenty.
Brown contended the campaign did pay him and also rewarded him with a $110,000-a-year city job, from which he was later fired for inappropriate conduct.
Since those allegations caught Machen's attention, nine people with ties either to Thompson or to Gray's 2010 campaign -- including Thompson himself -- have pleaded guilty to various charges over the course of the investigation.
Two Gray campaign supporters, Howard Brooks and Thomas Gore, pleaded guilty to covering up the payments to Brown.
In July 2012, Jeanne Clark Harris, a long-time supporter of Gray and business partner of Thompson, pleaded guilty to funneling more than $650,000 from Thompson to a shadow campaign for Gray. "The 2010 mayoral election was corrupted by a massive infusion of cash that was illegally concealed from the voters in the District," Machen said at that time.
Not long after, three business associates of Thompson's -- Troy White, Lee Calhoun and Stanley L. Straughter -- pleaded guilty to helping Thompson illegally fund national campaigns, including Clinton's.
Last August, Vernon Hawkins, a longtime associate of both Thompson and Gray, pleaded guilty to lying to investigators about the shadow campaign. During Hawkins' plea hearing, Gray's name was mentioned for the first time as the beneficiary of the shadow campaign.
In addition, former D.C. Councilmember Michael A. Brown has admitted to taking money from Thompson. Brown has admitted to taking about $120,000 in secret, illegal campaign donations in 2007 and 2008 in conjunction with Harris and a businessman only identified as "Co-Conspirator 1." Media reports have identified "Co-Conspirator 1" as Thompson.
Though the investigation has continued for three years, Gray remains a front-runner in the race for mayor. A poll for NBC4, WAMU, the Washington Informer and Marist released in February shows Gray leading the race.
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Thompson, Jeffrey E Stamped Information March 2014 (Text)