Multi-Agency Investigation Into Canceled Inaugural Ball

By Keith L. Alexander and Meg Smith
Washington Post Staff Writers
Sunday, February 8, 2009

Angela Luckey was excited about working her first inaugural ball. The Obamas were supposed to be there. Maybe the Clintons, too. And two dozen beauty queens. The $250 and $500 tickets would go to a good cause: injured Iraq war veterans. She signed up as a volunteer on the Web site and enlisted two friends to join her.

Then she met the promoter, Darryl Dante Hayes.

No sooner had Hayes picked up Luckey and her friends at the airport than he told them that the Veterans Presidential Inaugural Ball wouldn't be held at the downtown St. Regis Hotel after all. Instead, it would be at a Hilton in the Virginia suburbs.

Then he asked the three volunteers from Grand Prairie, Tex., to put $64,000 in ball expenses on their personal credit cards.

"That's when I knew something was wrong," Luckey said last week.

The day before it was to take place, the ball was canceled with no explanation, although some tickets had been sold. The $50,000 check Hayes gave the St. Regis for a security deposit bounced, a hotel official said. The hotel and volunteers said they repeatedly tried to reach Hayes by phone and e-mail but never got a response.

The veterans ball is the only one of 10 official and 45 unofficial inaugural balls under investigation.

The U.S. attorney's office, Secret Service and D.C. attorney general's office are looking into whether Hayes committed financial fraud, officials at the agencies said. Investigators are trying to determine whether Hayes used Obama's name and sympathy for veterans organizations to boost donations and ticket sales and whether Hayes actually planned on throwing such a ball.

"We're investigating what the hell happened with the money," said D.C. Attorney General Peter Nickles.

Hayes is a longtime Republican who ran a successful inaugural ball for George W. Bush in 2001. This year, he advertised his veterans ball on area radio stations and on the Web site of the Congressional Education Foundation for Public Policy, which he runs. The ads characterized the ball as a fundraiser for wounded Iraq war veterans.

Reached at his mother's home in Baltimore, Hayes, 52, said he was forced to cancel after all but two of the ball's 15 corporate sponsors pulled their support. Hayes said he had expected they would each contribute $10,000 to $15,000.

The Psychiatric Service Dog Society, an Arlington County group that places guide dogs with the disabled, donated $5,000. Its president, Joan Esnayra, said the money has not been refunded.

Hayes originally said he would share the list of the remaining 14 corporate sponsors with The Washington Post but called back to say he could not find the list. He said he thought he left the list in a rental car.

He says he intends to refund the money raised for the ball, whose problems were first reported in the Air Force Times.

"I'm getting the short end of the stick for trying to help these veterans, but I did nothing wrong," he said in a telephone interview. "All monies raised from that event were going to be donated to veterans organizations."

His financial problems date to the 1990s, when he accumulated more than $330,000 in unpaid taxes, according to court documents. He filed for bankruptcy protection in the District five times between 2001 and 2003. A civil suit in Prince George's County Circuit Court led to a $2.85 million default judgment against him in 2003 for breach of contract, fraud and misrepresentation.

He created the Congressional Education Foundation eight years ago to educate minorities on such issues as health care and welfare reform and serves as its executive director. Although the foundation is listed as a 501(c) nonprofit organization, it is not in good standing, according to the IRS, because it has failed to provide financials for several years.

Hayes declined to comment on his financial history but said his personal affairs had nothing to do with his desire to help veterans.

And he had experience with balls. He helped produce the New Millennium Unity Inaugural Ball at the Four Seasons for Bush's first inauguration. R. Ronald Evans, former vice chairman of the D.C. Republican Party, called the event, which was aimed at African American Republicans, a success.

"I'm not sure he had the same connections with the Democrats as he did with the Republicans," Evans said.

According to Hayes, the Obamas were invited to appear at the veterans ball. A White House spokesman said the Obamas attended the 10 official balls and declined all other invitations. The spokesman said no record was kept of the other invitations.

When most of the sponsors failed to come up with the money, Hayes said, he spent a week scrambling to find replacements. He said that is when he asked volunteers to donate their money, too.

Nikki Slater, 17, Miss Teen Montana Galaxy from Missoula, was one. She was to have been one of 24 pageant winners working as greeters. She was instructed to bring a gown and her crown and sash.

Her mother, Debbie Slater, insisted that she and her husband chaperone. Hayes agreed to cover their expenses, too.

The Slaters bought Nikki a gown. She was interviewed by the hometown newspaper for a profile of the local girl flying to Washington for a ball to benefit veterans and a chance to meet the new president.

Less than a week before the inauguration, the Slaters had not received plane tickets or hotel reservations. Debbie Slater said they called Hayes, who assured them that they would have their itinerary in hand that evening. Then, Slater said, Hayes asked her to make a donation. Slater said he told her he would repay them after the ball when the donations were tallied. The Slaters donated $5,000.

The tickets never came. And since then, Slater said, Hayes had not returned dozens of her calls or e-mails. She described her daughter as "devastated."

"Here is a gentleman who said he was going to help raise money for the widows, the children, these people who have been injured," she said. "What a fantastic cause. How great that makes you feel to be able to help them. To this day, it's like, how can somebody do that?"

Hayes said he would issue a $5,000 refund to her credit card.

Some contractors for the ball were out of money, too.

Painter Michael Israel of Boca Raton, Fla., was promoted on the Web site as entertainment. He said he was engaged to paint portraits of the Obamas and the beauty queens for auction. Israel's celebrity paintings have sold for more than $100,000 at charity auctions.

Israel said he called and e-mailed Hayes repeatedly before the ball seeking confirmation of flight and hotel information. As the day approached, Israel said, he spent $10,000 to ship his paints, costumes and equipment to Washington. Israel said Hayes assured him he would be reimbursed for his expenses after he received proceeds from the ball.

"I feel used," Israel said.

Hayes said that he never intended to mislead donors and that he will make full refunds.

"I wanted to raise money to buy houses for families of injured veterans," he said.

"I wasn't trying to do anything wrong. I'm going to show the world I didn't take the money and run."

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