By Tim Craig and Mike DeBonis
Tuesday, March 15, 2011; B01
Former mayor Adrian M. Fenty did nothing wrong when his administration doled out city contracts for parks and recreational centers two years ago, according to the findings of an 18-month investigation made public Monday. But the probe found that two of the mayor's close associates may have overcharged the city for work and had unexplained financial ties to each other and to subcontractors.
The report, authorized by the D.C. Council and conducted by the law firm Trout Cacheris, recommends that U.S. Attorney Ronald C. Machen Jr. investigate the dealings of Omar Karim, whose Banneker Ventures won a bid to manage $87 million in contracts, and Sinclair Skinner, who co-owns an engineering firm, Liberty Engineering and Design, or LEAD, which received subcontracts handed out by Banneker.
"Multiple ties," both personal and professional, existed between Karim and Skinner, but neither would answer detailed questions about the extent of their relationship, investigators said. LEAD, hired by Banneker to do surveying and engineering work, had to hire outside firms and employees to complete its work, the report found, marking up its cost significantly - as much as 400 percent for site surveys.
When the council and its pro bono attorneys tried to unravel the controversy, Skinner and Karim were uncooperative. "The witnesses' claimed failure of recollection was so extensive and so complete that it was unworthy of belief," the report said. "Karim and Skinner essentially thwarted the investigation, and their performance left us with the clear impression that they believed they had something to hide."
The law firm, headed up by Robert P. Trout, concluded that there is evidence of "undisclosed conflicts of interest, or worse, an unlawful scheme" between Skinner and Karim.
But in a news conference outside the John A. Wilson Building hours after the report's release, Skinner said he was "vindicated" by the report's findings and lashed out at D.C. Council members who, he said, used unfounded allegations to pursue a political vendetta against Fenty (D).
"What they've done is have a smear campaign," Skinner said, wearing a crimson jacket bearing the logo of the Kappa Alpha Psi fraternity, to which Karim and Fenty also belong.
The report states that there was "no wrongdoing" by Fenty in the controversy that helped unravel his political career in the months leading up to last year's Democratic primary.
Fenty's opponent in the primary, Mayor Vincent C. Gray (D), used the controversy to try to paint the former mayor as unethical. Gray called Fenty "surreptitious, clandestine and circuitous" because his administration awarded the contracts via the D.C. Housing Authority. That meant the council did not have a chance to vote on the spending.
But the report concludes Fenty routed the money through the Housing Authority because of a "sincere desire . . . to expedite the completion" of new recreational amenities for residents.
Gray also frequently accused Fenty of improperly issuing more than $80 million in contracts, but the report notes the Office of the Deputy Mayor for Planning and Economic Development directed only $6.2 million to the housing agency. Only $4.4 million was in turn sent to Banneker.
In a statement released through an aide, Gray said he " trusts that the council will examine all findings and recommendations and act accordingly." He said he will review the report thoroughly and "will work with the council to implement any associated remedies."
A top mayoral development aide, David Jannarone, appeared to have some bias toward Banneker Ventures, Trout found. But his investigation found no evidence that Jannarone personally benefited from his actions to aid the firm. And it found there was "no evidence of improper influence in the selection and scoring process" that Banneker, partnered with another firm, ended up winning.
Banneker's activities after winning the contract were more questionable, the report said.
In choosing LEAD, Karim teamed up with a small, inexperienced firm that "did little of the work itself" but instead hired other firms to do site surveys and technical engineering, charging markups of as much as 400 percent for "management, direction, and supervision." That, the report said, "amounted to little more than scheduling and transmitting their work product."
The report called it "an extremely expensive layer of management . . . resulting in, at the very least, considerable waste to the taxpayers."
Trout also questioned why Banneker chose four firms that had ties to Karim or Skinner as general contractors for various parks projects. Those firms, the report said, "made substantial payments" to entities owned by the pair "close in time to procurement of the general contractors, but the payments were not disclosed during the selection process."
Neither man would discuss the payments with investigators. A. Scott Bolden, an attorney for both Skinner and Karim, defended the secrecy, referring to the payments as "private contractual matters" between firms who took no part in the parks contracts. "You cannot link apples and oranges," he said, adding that there was "absolutely no link" between the payments and the contract awards.
Council members who ordered the probe said the findings highlight a need for greater oversight of city procurement practices. "The report indicates many points along the way where we deviated from best practices and may have migrated to worst practices," said Mary M. Cheh (D-Ward 3).
Fenty was unavailable for comment, but Peter J. Nickles, a close confidant who served as his attorney general, praised Trout for a "thoroughgoing" report.
"I regret that it wasn't finalized sooner," he said. "It would have taken away from [Gray] the argument that [Fenty] had provided these individuals with D.C. contracts. . . . It might well have had an effect on the election."