Law enforcement officials have discovered “connections and communications” between D.C. government officials and representatives of a company owned by the businessman at the center of a long-running investigation into the 2010 mayoral race.
The disclosure from U.S. Attorney Ronald C. Machen Jr. came in letters released Thursday between the federal prosecutor and D.C. Attorney General Irvin B. Nathan that provide a window into the state of the nearly three-year-old investigation.
For weeks, the two government lawyers have clashed over the release of thousands of e-mails and other documents related to the city’s decision to enter into a $7.5 million settlement with Jeffrey E. Thompson, the former head of D.C. Chartered Health Plan.
Thompson, according to court papers and interviews, is the alleged financier of an off-the-books $655,000 “shadow campaign” on behalf of Mayor Vincent C. Gray (D), who announced this month that he is seeking a second term.
Investigators appear to be interested in what role, if any, Gray and his deputies played in the 2011 settlement.which his predecessor Adrian M. Fenty (D) had resisted.
Neither Thompson nor Gray has been charged with a crime, and the mayor has denied wrongdoing.
In sharply worded letters exchanged over the past five weeks, Nathan has refused to release a set of documents, citing attorney-client privilege. He has defended the 2011 settlement over reimbursement rates for dental care as aboveboard and an equitable deal for the city.
Nathan also offered to release the documents, he wrote, if Machen’s office could “show or describe to me a single scintilla of evidence that any person in the District government committed or facilitated an arguably illegal act” related to the settlement.
Machen has suggested that the battle over documents is an “obstacle” to closing the investigation.closing out the investigation that has led to guilty pleas from four people associated with Gray’s 2010 campaign. In one letter, Machen writes that Nathan may not be aware of the entire scope of the investigation.
“While the documents the District is withholding may not be incriminating on their face, when combined with information gathered by federal investigators, they may provide evidence of crimes,” Machen wrote in a Nov. 25 letter released Thursday in response to a public records request. Investigators, he said, have “identified connections and communications . . . that you likely do not know about.”
Nathan has maintained that Gray played no part in his decision to settle the Chartered claim. But Machen, in his Nov. 25 letter, accused Nathan of a “lapse of memory,” citing “numerous communications” obtained by investigators between Gray’s executive office and Nathan’s office on the settlement.
Nathan stood by his claim in a Dec. 5 reply: “You are not correct,” he wrote. “There are no e-mails or other documents reflecting any communication between the Mayor and me on this settlement before I sought his approval of the settlement.”
After the settlement was reached, Nathan said, there were further discussions about Chartered involving the mayor’s office that did not relate to the settlement.
“As you know,” Nathan wrote, “sometimes a busy official sending an e-mail to a colleague may not change the heading on a previous e-mail from that colleague while addressing an entirely different subject.”
In their latest correspondence dated Dec. 5, Nathan agreed to Machen’s revised request for a more limited set of documents related only to the Chartered settlement that include the mayor, any executive office employee and the Department of Health Care Finance.
The offices have yet to strike a deal.
Matthew Jones, a spokesman for Machen, said Thursday: “We have continued to have discussions and we’re hopeful that we’ll be able to resolve this dispute short of litigation.”
Ted Gest, a spokesman for Nathan, said the office “continue[s] to have an active dialogue with the federal authorities to seek a reasonable compromise in the public interest.”