Mayor Vincent C. Gray knew of campaign finance violations in January, sources say

Mayor Vincent C. Gray knew in January that associates spent money on behalf of his successful 2010 election that was not properly reported, a violation of campaign finance laws, according to people with knowledge of the ongoing criminal investigation.

Gray (D) was said to have discussed the expenditures in a private meeting with Jeanne Clarke Harris, the public relations consultant who admitted Tuesday to helping orchestrate an illegal secret campaign on his behalf.

On Wednesday, Harris confirmed the meeting, which she said took place Jan. 10 in Gray’s private suite on the sixth floor of the John A. Wilson Building. She declined to describe the nature of the meeting, but three people close to the federal investigation who have knowledge of the meeting said it concerned the 2010 campaign and the investigations into it.

The disclosure of the meeting marks the first indication that Gray knew of undocumented funds before the federal raids in March at the homes and offices of Harris and business associate Jeffrey E. Thompson, who is believed to have funneled more than $650,000 in unreported funds to a “shadow campaign.”

The disclosure also comes as Gray faces mounting political pressure to make a fuller accounting of his role in the campaign. The city’s political fabric showed signs of fraying Wednesday as three of 12 D.C. Council members became the first elected officials to call for his resignation.

At the time of the January meeting, the official Gray campaign was pulling together an amended report to submit to the D.C. Office of Campaign Finance, which is conducting an audit. Gray and Harris discussed the unreported spending, and Gray later told her to submit records of any expenditures to his campaign staff, according to the people with knowledge of the meeting.

One person said that before the meeting, Harris had prepared invoices for the secret spending so that, if asked for, they might be provided to Gray’s legitimate campaign for reporting. It is unclear whether Harris exchanged information with Gray or his campaign staff or whether Gray knew about the source of the money or the amount of the spending.

Asked Wednesday when he first knew about unreported expenditures, Gray said, “That’s part of the investigation.”

Robert S. Bennett, Gray’s attorney, declined to comment about the January meeting. “This is a pending investigation, and I don’t think it’s appropriate to comment on it, and I have so advised the mayor to do the same,” he said.

On Thursday, a person close to Gray confirmed the January meeting, saying the discussion marked the first time the mayor heard of a “shadow campaign.” During the meeting, the person said, Gray told Harris to submit her expenses immediately with the city’s Office of Campaign Finance to comply with the law.

“He never heard back from her again,” said the person, who discussed the matter with Gray on Thursday.

Harris, 75, pleaded guilty Tuesday in U.S. District Court to obstruction of justice and conspiring to break federal and local campaign finance laws. She faces 30 to 37 months in prison under federal sentencing guidelines. Among the acts she admitted to was helping to disburse and conceal $653,800 in campaign funds secretly spent by Thompson.

Thompson has not been charged, and his attorney has said he won’t comment on pending investigations.

U.S. Attorney Ronald C. Machen Jr. said Tuesday that the 2010 mayoral race was “corrupted by a massive infusion of cash that was illegally concealed from the voters of the District.”

Two other Gray campaign operatives have pleaded guilty to federal felonies related to illicit payoffs made to Sulaimon Brown, a mayoral candidate who alleges that he was paid to verbally harass the incumbent, Adrian M. Fenty (D).

The city audit of the Gray campaign, expected to be scathing, is pending.

In light of disclosures by prosecutors, the campaign finance office is “expanding the scope” of its efforts to include the $653,800 in unreported expenditures, said Wesley Williams, an agency spokesman.

During his first public appearance after Harris’s plea Wednesday, Gray declined to address specifics, but he decried the idea of a “shadow campaign” in general terms. “This is not the campaign that we intended to run,” he said.

However, three former colleagues on the D.C. Council called on Gray to step down — David A. Catania (I-At Large), Mary M. Cheh (D-Ward 3) and Muriel Bowser (D-Ward 4).

“The people you chose to surround yourself with engaged in a criminal conspiracy to undermine the election process in this city, which means as the leader of that campaign, you forfeit the fruits of that effort,” Catania said.

He said he considered it immaterial whether Gray knew about campaign violations. He also said: “Does any reasonable person believe that Jeff Thompson invested $653,000 in a shadow campaign and didn’t tell the beneficiary? That makes no sense. None.”

Cheh, who supported Gray’s campaign against the inclinations of many of her constituents, left the mayor a voice-mail message late Wednesday telling him that she was calling for his resignation.

“I don’t see how there is any way out except by him stepping aside,” Cheh said. “The more I thought about it, whether he knew about it or not, it’s such an extraordinary election fraud, he has to take responsibility for it.”

Cheh, a constitutional law professor at George Washington University, called Gray’s situation as one that is described in law books as “willful blindness.”

“How could all this go on and you don’t know?” Cheh asked.

Bowser also said Gray should resign because the public has been asking him for months to disclose what he knew about problems with his campaign. “The best thing a person who loves this city could do for this city is to step aside so he can concentrate on his legal issues and we can get on with the business of the city,” said Bowser, who supported Fenty in 2010 and is now mentioned as a potential mayoral candidate.

Council Chairman Phil Mendelson (D) said in a statement that the spending revelations are disturbing but that it is premature to call for Gray to resign when he has not been charged with a crime. In a mild rebuke to his colleagues, Mendelson said the call for Gray’s resignation “creates instability at a time when we need just the opposite.”

Pedro Ribeiro, Gray’s spokesman, said calls for the mayor’s resignation were reckless. “This is the kind of irresponsible talk we’ve come to expect” from Catania, he said in an e-mailed statement. “It’s disappointing however that a constitutional scholar of Cheh’s caliber would call for a resignation before an investigation is complete.”

Disappointment over the allegations extends to former workers in Gray’s mayoral campaign. Mo Elleithee, a political consultant, called the shadow operation “shady, illegal and politically stupid.”

“That shadow campaign has tainted the hard work of staff and volunteers who worked on the legitimate campaign,” Elleithee said. “I haven’t had any evidence that the mayor knew anything about it at the time. I trust and I hope that was the case.”

Elleithee urged Gray to speak out in more detail about campaign dealings. “By remaining silent, it just generates more questions and it fuels people’s mistrust of the government,” he said. “He could be a voice for our community’s shared betrayal.”

In what one person described as a “pep talk,” Gray met Wednesday afternoon with senior staff, including the city administrator and his four deputy mayors, and he encouraged them to stay focused on the city’s business. He also told them that he is not resigning.

Asked at his Wednesday news conference whether he planned to serve out his full term, which ends in January 2015, Gray said, “I have no plans to do otherwise.”

Gray said he remains able to lead the city, and he urged the public to distinguish between the “issues” in his 2010 campaign and his mayoral administration.

He entered the race “for the right reasons,” he said. “I got out there to be involved in this because I loved the District of Columbia. . . . I know who I am. I get up every morning and look in the mirror, and I see someone I respect.”

Gray would not discuss the identity of the figure — described by Harris but unnamed in court — who is said to have planned the shadow campaign.

“I feel absolutely certain . . . that that will be revealed as this investigation continues to unfold,” he said. The Washington Post reported in March that Vernon Hawkins, a close Gray associate, played a key role in organizing the shadow campaign. Prosecutors said Tuesday that it was “coordinated” with members of the official campaign.

Otherwise, Gray generally declined to comment on specific allegations in the criminal investigation before his security team whisked him away to his sport-utility vehicle.

“I would like to comment on all of this, to be honest with you,” he said. “This investigation is continuing. . . . Obviously, there is additional information that is unfolding.”

Mike DeBonis covers local politics and government for The Washington Post. He also writes a blog and a political analysis column that runs on Fridays.
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