Kwame R. Brown, D.C. Council chairman, resigns after being harged with bank fraud

Correction: An earlier version of this article incorrectly said that Kwame Brown was the youngest person to hold the office of D.C. Council chairman. Brown was 40 when he became chairman; the youngest council chairman was Arrington L. Dixon, who was 36 when he assumed the post in 1979. The article also incorrectly said that Brown was the first person living east of the Anacostia River to be elected to citywide office. He was the first to be elected to an at-large council seat. This version has been corrected.

June 6, 2012

D.C. Council Chairman Kwame R. Brown resigned from his seat Wednesday night, hours after he was charged with bank fraud, plunging the city government into a leadership crisis.

“Because of the great respect that I have for the institution that is the Council of the District of Columbia, I have chosen the only honorable course in submitting my resignation at this time,” Brown wrote in a letter to the council secretary. “I simply will not hold this body, and its important work hostage to the resolution of my personal indiscretions.”

Earlier in the day, prosecutors filed a three-page charging document in the District’s federal court accusing Brown (D) of falsifying records in applications to obtain a home loan and to buy a $50,000 powerboat. Brown inflated his income by “tens of thousands of dollars” in the two-year scheme that started in August 2005, federal prosecutors wrote.

Brown, dogged for months by an investigation into his personal finances and his 2008 campaign for a council seat, is scheduled to attend a plea hearing Friday before U.S. District Judge Richard J. Leon. Bank fraud carries a maximum penalty of 30 years in prison, but under federal sentencing guidelines, Brown will face far less potential punishment.

The disclosure of the charges set off a frenzy of activity at the District’s John A. Wilson Building, including a hastily scheduled closed-door council meeting in Brown’s office.

Brown, 41, submitted his resignation quietly, in a letter delivered privately. He refused to address a platoon of reporters as he left his council offices about 4 p.m.

A politician who speaks of himself in the third person, has compared himself to President John F. Kennedy and has a love affair with expensive cars, Brown flashed a large grin as he shoved his way through the scrum and tried to ignore reporters’ shouted questions.

“I will have a comment tomorrow,” said Brown, who as recently as last week said that he was not “worried one bit” about an intensifying federal probe into his finances and a previous city campaign.

The charges against Brown came in a “criminal information,” a document that can be filed only with the defendant’s consent and which signals that a plea deal has been reached. Officials familiar with the case said that prosecutors and Brown’s attorney have been discussing the plea deal for weeks.

“Thank you,” he told reporters as he tried to get to his car. “No comment as of now. I appreciate you for waiting in this hallway all this time. I don’t have a comment.”

On Wednesday night, well after Brown had left the Wilson Building, city workers removed his nameplate from his office door, leaving only the word “Chairman” near Room 504.

Council member Mary M. Cheh (D-Ward 3), who endorsed Brown in his 2010 race, said she was “dismayed” by Brown’s actions. “On some level, I feel betrayed,” she added. “He let down the District of Columbia.”

With Brown’s resignation, Cheh, who had been the council’s president pro tempore, is now temporary chair until members can elect an interim chairman. Cheh called a meeting for June 13 to elect the interim chairman.

Under Home Rule, the interim chairman must be one of the four at-large members. A special election will then be held to elect a permanent replacement.

“We are going to keep moving ahead in an orderly fashion,” Cheh said in an interview. Later, in a statement, she said: “I want to reassure everyone that the work of the Council will continue uninterrupted. We will move forward focused on the business the people elected us to do.”

Brown’s attorney, Frederick D. Cooke Jr., did not respond to numerous e-mails or phone messages seeking comment. U.S. Attorney Ronald C. Machen Jr. also declined to comment.

As chairman, Brown was the second highest-ranking official in D.C. government, wielding incredible power over the city’s finances and deciding which legislation is taken up by the council. He had increased the influence of the council chairman’s position — literally expanding the size of his own office by blasting out walls — and was known to reward supporters with coveted leadership posts and strip such assignments from those who crossed him.

Brown had been next in line to succeed Mayor Vincent C. Gray (D) if Gray were to leave office.

Gray, who also is weathering a federal investigation into practices tied to his 2010 mayoral campaign, issued a statement Wednesday saying that he was “shocked by the news. I am disappointed and saddened. I was elected to the Council when Chairman Brown was elected to an at-large position. I served with him my entire time on the Council. Never would I have imagined something like this would occur.”

Brown is the second council member this year to be charged with a federal crime. Last month, former council member Harry Thomas Jr. (D) was sentenced to 38 months in prison after pleading guilty to stealing more than $350,000 from city taxpayers.

In recent weeks, two staff members of Gray’s 2010 campaign pleaded guilty to scheming to funnel undocumented campaign cash to Sulaimon Brown, a minor candidate in the mayoral race. Their goal was to keep the candidate in the primary battle to assail then-Mayor Adrian M. Fenty (D).

Federal authorities have also conducted high-profile raids of the home and office of a consultant to Gray’s campaign and of the home and offices of Jeffrey Thompson, a prominent and influential D.C. contractor. The investigation, which has scooped up millions of pages of records, appears to be focused on Thompson’s ties to city officials and elected leaders.

The charges against Kwame Brown are likely to end — for now — what had seemed a promising political career.

The son of a well-known and sharp-knuckled D.C. political operative, Brown became council chairman at age 40 in 2010 by defeating Vincent B. Orange by 15 percentage points. Six years earlier, Brown had become the first person living east of the Anacostia River to be elected to an at-large council seat when he upset a four-term incumbent.

Although his term as chairman started off rocky — he endured an uproar for driving an expensive city-leased, fully-loaded sport-utility vehicle — Brown had been working hard to project the image of a leader by recently negotiating a 2013 budget that includes no new taxes but still manages to fund new parks and set aside $18 million for affordable housing.

Council members said they hoped that Wednesday’s charges would remove part of the shadow being cast on the District government by federal officials’ high-profile corruption probes.

“I think there are a couple of ways to look at this, and one is, it’s very disturbing that the public trust has been hurt in this way,” council member Phil Mendelson (D-At Large) said as he left the meeting in Brown’s office. “The other way of looking at this is now, it appears the investigation regarding the council chairman is at an end and we have a chance to move forward without the cloud of an investigation.”

Mendelson is favored to win the job as interim chairman.

Federal authorities and Brown’s attorneys would not publicly discuss the charges or the investigation into Brown.

Besides digging into Brown’s finances, the federal authorities have been scrutinizing alleged improprieties related to his 2008 campaign. He raised nearly $1 million even though he faced little serious opposition to maintain his at-large seat. But the D.C. Campaign Finance Office audited the campaign’s books and found that the raising and spending of more than $270,000 had not been reported. The audit found that $239,000 had been passed along to a now-defunct consulting firm run by Brown’s brother, Che. The campaign had also failed to register a $60,000 bank account Che Brown controlled, the audit found. Che Brown has not been accused of a crime.

The investigation into the campaign is continuing, federal law enforcement officials have said.

Wednesday’s charges, though, have nothing to do with Kwame Brown’s public conduct.

During that period, Brown was facing serious financial trouble and eventually racked up debt totaling at least $700,000. At one point, several credit-card companies were suing the council member for $55,000 in missed payments. He has said he repaid the money.

The financial issues appeared to start shortly after he and his wife bought a four-bedroom home in the Southeast neighborhood of Hillcrest in 2002 for $313,000. Over the next few years, he obtained at least five loans secured by the house, including a home-equity line of credit from Industrial Bank, the one prosecutors mention in the court filings.

Court papers say he also obtained a loan from Industrial to buy his 38-foot powerboat, Bullet Proof, which he keeps docked in Anacostia’s Boathouse Row.

Staff writers Mike DeBonis, Nikita Stewart and Mihir Zaveri and staff researcher Magda Jean-Louis contributed to this report.

Follow Del Wilber on Twitter: @delwilber

Tim Craig is The Post’s bureau chief in Pakistan. He has also covered conflicts in Iraq, Afghanistan and within the District of Columbia government.
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