Combined, the raids and subpoenas cast attention on Thompson’s donor network and his role in funding local political campaigns, and indicate that an ongoing federal probe sparked by the allegations of a minor mayoral candidate has unfolded into a broader inquiry of campaign finance in the city.
In particular, the recent use of money-order donations by Thompson-connected individuals and firms — including to Mayor Vincent C. Gray, D.C. Council members Michael A. Brown and Vincent B. Orange, and former member Harry Thomas Jr. — has raised questions about whether contribution limits were circumvented through “straw donations,” or giving money to others who in turn donate the cash under their own names.
Thompson’s attorney, Brendan V. Sullivan Jr., declined to comment, citing a policy of not addressing ongoing investigations. A partner with Thompson’s accounting firm — Thompson, Cobb, Bazilio & Associates — has said that the agency is cooperating with the investigation and that there has been “no accusation of wrongdoing.”
Craig Engle, a lawyer specializing in election and campaign finance law, said that if a donor were interested in a straw-giving scheme, “I think money orders would be an easy way to do it.”
The Thompson donor network has delivered money to candidates through several conduits, according to contributions reviewed by The Washington Post. Most directly, donations came from companies he owns or is otherwise affiliated with.
They include the accounting firm, his D.C. Healthcare Systems and its subsidiaries RapidTrans and Chartered Health Plan, which holds a city contract to handle Medicaid billings worth as much as $322 million yearly.
They also include two companies — Details International and Belle International — owned by Thompson associate Jeanne Clarke Harris, a public relations consultant whose home and offices also were searched by federal investigators.
Several other companies based at the 15th Street NW offices of the accounting firm are also frequent givers, almost always with other Thompson-related donations.
Businesses are permitted to donate to District political campaigns, although regulations mandate that contributions from subsidiary firms be counted against the limits on its parent company’s giving. Those rules appear not have been observed in the case of Thompson’s companies.
His coterie of donors also includes individuals Thompson employs or does business with. At least 14 partners and employees of Thompson, Cobb, Bazilio & Associates and 12 employees of Chartered Health Plan have given to city candidates in the past five years.
Donations have also come from individuals with personal ties to Thompson and Harris, a Gray campaign consultant who has declined to comment. At least seven people living in houses owned by Thompson or his family members have contributed to city campaigns, and several people who gave recent money-order donations are related to Harris; three declined to comment to The Post last week.
Thompson can also call on his broader network of friends and business associates. On the evening of Aug. 5, 2010, for instance, a message from his e-mail account invited 56 people, including his bankers, lawyers and lobbyists, to his accounting firm for a fundraiser lunch for Kwame R. Brown (D), then seeking the council chairmanship. Thompson had held similar events for many local and federal candidates — including presidential hopeful Hillary Rodham Clinton in 2008.
The invitees donated about $14,000 to Brown’s campaign; other elements of the Thompson constellation of contributors — many of which had already given to his opponent, Orange, earlier in the year — gave an additional $35,000. It was not a particularly large haul by Thompson standards.
In two days before a June 2010 reporting deadline, the Gray campaign recorded at least 26 contributions with ties to Thompson, Harris, or their associates and employees, according to a review of the campaign reports. The majority of them were in $2,000 increments and represented more than 30 percent of Gray’s haul for those two days.
A person who has served as treasurer for several city campaigns, who spoke on the condition of anonymity to discuss the matters freely, said Thompson’s approach to fundraising is “unique.”
“He doesn’t deal with campaign treasurers or campaign chairmen. Big people like him, he wants to put [contributions] in your hand and wants to look you in the eye,” said the treasurer, who is gathering records to answer a grand jury subpoena. “Most of the time, Jeff never holds a fundraiser.”
“In a ward race, he’ll give you $25,000. If he really, really likes you, he gets $50,000. And for an at-large race, he can double that to $100,000,” the treasurer said.
Bundles of donations
Most often, Thompson’s donation “bundles” — which have gone to more than a dozen candidates in the past decade, including former mayors Anthony A. Williams and Adrian M. Fenty — come in the form of checks. But in the past four years, his bundles have started to include dozens of money orders.
They went to council member Michael A. Brown’s 2008 at-large campaign; the 2010 campaigns of Gray, Thomas, Jeff Smith, who sought the Ward 1 council seat, and Kelvin A. Robinson, who sought the Ward 6 seat; and Orange’s successful 2011 bid to fill Kwame R. Brown’s at-large council seat.
Orange, who has denied any wrongdoing and is seeking reelection, released copies of his money orders last week under pressure from his opponents in the April 3 Democratic primary and media outlets.
The money orders show that shortly before 7 p.m. on March 10, 2011, a Washington outlet that retails Western Union money orders sold nine worth $500 each. Less than 10 minutes later, five $500 money orders were purchased at another location. The Post has identified that location as A-1 Wines & Liquors, in the 1400 block of K Street NW.
Not five hours later, those money orders — along with 16 others totaling $26,000 — were listed in an Orange campaign finance report.
A close examination of those donations raise various questions. Different individuals’ names were entered on sequentially numbered money orders in substantially similar handwriting. While the money orders were purchased in the District, some were submitted for companies and individuals listing addresses in Georgia and California. And at least one person and one company listed on the money orders had previously given checks to District campaigns.
Several of the Orange donors had also given the Gray campaign money orders in the months prior.
On the day of the Aug. 10, 2010, deadline and on the day of the 2010 general election, the Gray campaign received nine money-order donations totaling $7,500 from KMJ Development, Euclid Street Partners and JT Real Estate Holdings, according to campaign finance records. Those companies, each based in Thompson’s offices, have given city candidates a combined $22,000 since 2008, exclusively in money orders.
City records show that KMJ Development is owned by Kweisi Mfume Jr., son of former Maryland congressman Kweisi Mfume. The company owned, until recently, a house near Mount Vernon Square; it has owned no other D.C. real estate. Mfume Jr. did not return calls and an e-mail seeking comment.
Euclid Street Partners, until December, owned a Columbia Heights rowhouse and has had no other real estate holdings in the city. JT Real Estate Holdings I paid $2.05 million in 2007 for a corner plot adjacent to the Poplar Point reservation on the Anacostia River, an area that has been eyed for redevelopment by the city.
Records show no commercial activity on the site since then, and it appears unused and overgrown. Thompson is listed in city records as the sole member of both companies.
Money orders are not treated any differently than checks in local and federal campaign law, but campaign lawyers said their widespread use is unusual.
Kenneth A. Gross, a Skadden Arps lawyer specializing in campaign finance matters, said a responsible campaign should give “additional scrutiny” to money orders. “If they are consecutively numbered, bells should be going off,” he said.
Engle, a lawyer at Arent Fox who has advised several national Republican campaigns, said his advice to campaign clients is simple: Don’t take money orders, and if you do, accept none worth more than the $50 federal limit on cash donations.
If a federal campaign reported a bundle of numerous money orders like those found in the Gray and Orange campaigns, “the Federal Election Commission would certainly investigate the matter,” said Engle, who worked at the commission for a decade.
The D.C. Office of Campaign Finance asked for copies of the Orange money orders shortly after they appeared on his reports but took no enforcement action. The office said last week that it would audit Orange’s 2011 campaign. OCF is already auditing Gray’s 2010 campaign.
Gray had called for investigations last year after The Post published allegations by Sulaimon Brown, a 2010 mayoral candidate, that he was paid and promised a city job in return for disparaging Fenty on the campaign trail on Gray’s behalf. Gray has denied the accusations.
The Post later reported that Brown received money orders tied to a Gray campaign aide and that the campaign had an unusual practice of accepting a large number of money orders and also converting cash into money orders.
Gray has said it was “no secret” that he sought campaign contributions from Thompson. He declined to say whether he had personally obtained checks from Thompson and then delivered them to his campaign staff, saying he would “let the investigation unfold.”
Orange did not recall details about soliciting donations from Thompson or whether he or someone else in his campaign received the checks and money orders on March 10, 2011.
“This is the ordinary course of business with him, as I understood it,” Orange said. “He had raised money for lots of candidates. I’ve never heard anything bad, one way or another, about him except he’s an upstanding guy.”
Dorothy Brizill, a local government watchdog, publicly questioned Thompson’s bundling of contributions more than a decade ago when Williams was mayor.
Staff researcher Jennifer Jenkins contributed to this report.