Thomas may have had help to divert funds, D.C. council report finds

April 26, 2012

Convicted former D.C. Council member Harry Thomas Jr. may have had help from someone in city government when he stole nearly $350,000 from a nonprofit, a council report has concluded.

But in the extensive report, to be released Friday, the council’s Committee on Human Services said it did not have enough information to name anyone who could have provided that assistance. The report faults officials at the Children and Youth Investment Trust Corp. for failing to detect the fraud.

Thomas, a onetime rising star in District politics, pleaded guilty in January to using trust funds intended for youth sports for personal use, including trips and a sport-utility vehicle. He faces 37 to 46 months in prison under federal guidelines when he is sentenced Thursday.

The preliminary report raises as many questions as it answers, prompting committee Chairman Jim Graham (D-Ward 1) to request that the council grant him subpoena authority so he can compel more witnesses to testify. “It is only by that authority that we will be able to obtain information necessary to the objectives of this investigation,” the report states.

The committee examined how Thomas was able to divert money through the trust. Its conclusions come amid federal investigations into donations to Mayor Vincent C. Gray’s 2010 campaign and contributions to several council members.

“Former Council member Thomas is being held accountable for his actions,” the report states. “However, we find that his criminal actions could not have occurred without the actions of Trust staff and perhaps others.”

The report, a copy of which was obtained by The Washington Post, portrays the trust as an organization that gave Thomas preferential treatment and did not abide by its own rules, inappropriately accelerated payments to a group Thomas controlled, had lax oversight over how taxpayer money was used, and succumbed to influence from a top Thomas staffer, Neil Rodgers.

The council’s analysis also questions whether Gray, then council chairman, and council member Tommy Wells (D-Ward 6), who then headed the Human Services Committee, should have more closely scrutinized Thomas’s interaction with the trust.

The nonprofit was created in 2000 by Mayor Anthony A. Williams as a quasi-public agency that would more efficiently get public and private dollars to support disadvantaged youth.

Thomas’s scheme began after he convinced his colleagues to approve $400,000 in 2007 for “youth baseball programs” as part of $12 million in earmarks council members awarded to favored projects. But the report, based on more than 1,500 e-mails and numerous interviews, concluded that Thomas’s earmark was the only one approved by the council “with no specific grantee.”

“Those responsible for close supervision of [the budget] were surely aware of this anomaly,” the report states.

Wells, according to the report, recalls meetings with Gray “directly relevant to these issues” in 2007 and 2008. But Wells, the report states, now “has an uncertain recollection of what was said.”

The report did not specifically say why the committee believes other people may have been involved and mentioned only e-mail exchanges between city and trust officials.

In December 2007, after unknown trust staffers reached out to Thomas to set up a grant, the organization signed an agreement with Marshall Banks, executive director of Langston 21st Century Foundation.

The agreement stipulated that the grant would give youngsters exposure to “golf, softball, baseball and tennis . . . field hockey and badminton.” The Langston 21st Century Foundation, which prosecutors allege Thomas controlled, was to provide quarterly progress reports to the trust and upload monthly expenditures onto Webstar, an online accounting tool, according to a copy of the agreement.

But the report concludes that trust officials ignored parts of the agreement, which allowed checks to flow to the foundation without a proper accounting. The biggest red flag, according to the report, was that Rodgers served as the intermediary between the foundation and the trust.

“We are not aware of any other instance when a council member — not the grantee organization — handled reporting on a trust grant,” the report stated.

Rodgers has not been charged in the case. Banks pleaded guilty earlier this year to concealing the theft.

Days after the agreement was signed, Rodgers e-mailed from his council account requesting an initial $100,000 from the grant. “How soon can we get the first check,” Rodgers wrote to Ellen London, then director of communications and government relations for the trust, on Jan. 9, 2008.

Less than two weeks later, the trust issued a $100,000 check.

On May 14, 2008, the trust issued a second payment for $96,000 after “Thomas’s staff” submitted its first quarterly report. But “the most cursory review of that report . . . shows virtually no detail and no documentation,” the committee concluded.

On Sept. 30, 2008, Rodgers again wrote to London “hoping to receive the check this week” for the remaining $200,000 of the grant.

London, who later became the trust’s chief executive but was dismissed earlier this month, pressed Rodgers for more documentation. At the time, senior officials of the trust, including the vice president of finance, were raising concerns that the Langston Foundation had not been meeting its reporting requirements.

But Millicent D. West, who was the trust’s CEO at the time, allowed the payment to proceed without the data being entered into Webstar, the report states.

“I talked to Millicent and she is o.k. in proceeding without the data being entered,” Timothy Fitzsimmons, then vice president of finance, wrote to agency leaders on Oct. 1.

Rodgers and West, the city’s former director of homeland security, did not return calls seeking comment. West has previously said it is not uncommon for some trust grants to deviate “from the normal operating procedure.”

Rodgers has previously declined to comment.

But e-mails released by the committee show that the senior officials frequently raised concerns about Langston’s lack of reporting. On Oct. 3, Jacquelyn L. Lendsey, then vice president for programs and communications, wrote to other agency leaders hoping to break the payment in half, releasing $50,000 immediately and another $50,000 after more reporting requirements were fulfilled.

But the committee determined that, “curiously,” that did not happen. On Oct. 8, 2008, one $100,000 payment was issued to Langston.

“The committee has been given no explanation for the change or who authorized it,” the report states.

In December of that year, the trust issued a final $100,000 payment to Langston, but only after London and other trust officials worked with Rodgers to make sure the appropriate documentation was submitted.

But the committee found that final report “every bit as skeletal and questionable as all prior reports.”

When it arrived on Dec. 11, Fitzsimmons questioned who submitted it.

“Neil has been doing all the submissions for the program since its inception,” London replied.

Fitzsimmons responded: “Okey-doke. Just wondering if you got frustrated and did it yourself?”

“Almost . . . but not quite,” London responded.

The following day, according to the report, Williams and London intervened to rush Langston its final check, a week earlier than agency budget officials had planned.

“This is the Harry Thomas grant,” London wrote to Fitzsimmons. “Do you want to let Millicent know about the schedule? Not on the tattling front . . . just that she might get the phone call.”

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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