The D.C. Chamber of Commerce yesterday asked a federal judge to quash a grand jury subbpoena issued last week for chamber records that the jury wants to examine to determine whether the chamber's president, James L. Denson, misappropriated funds.
A lawyer who said he represented the executive committee of the chamber's board of directors told the court it would be impossible for the chamber to turn over all its business records for the past six years. A decision by the court is pending.
Denson, who also is chairman of the D.C. Board of Elections and Ethics, returned to the District from Paris yesterday morning, met briefly with Mayor Marion Barry, and then declared his intention to stay in his city post. "I have no reason to resign at this point," Denson said.
The motion was filed by Richard J. Hopkins, a member of the chamber and assistant counsel at Howard University. It was not clear to some chamber board members reached last night whom Hopkins was representing. The chamber's general counsel, Sidney Friedberg, of Arent, Fox, Kinter, Plotkin & Kahn, resigned last week, protesting the board's failure to act on what he said was evidence of misappropriated funds.
The chamber's board meets at 8:30 this morning for the third time in a week.
Other members of the executive committee of the board could not be reached for comment. One member reportedly said that she had not been polled to authorize the filing of the motion.
Denson acts as chairman of the executive committee. He could not be reached for comment after the motion was filed.
In an apparent attack upon those members of the board who have been critical of Denson's management, the motion reads, ". . . certain members of the board of directors of the chamber acting without the authorization of the full board . . . made allegations to the press and to the U.S. attorney's office that an executive officer of the chamber had expended funds of the organization without . . . approval. . ."
The motion contends that the "complaining minority of board members resigned after making various statements to the press designed to damage the reputation of the chamber . . ."
In addition, the four-page document says that "any violation of federal laws, if any exist, are technical at most," and therefore, "the best interest of the chamber would be served" by limiting the request for records."
Hopkins argued that the present scope of the subpoena will require so much work assembling records "that the board of directors . . . could not function, forcing the chamber into bankruptcy."
Federal prosecutors are expected to respond within a few days to the motion.
The grand jury subpoena called for the chamber to turn over all its corporate books and records dating back to 1974. The records were to be turned over on Thursday.
However, D.C. Inspector General Joyce Blalock, acting under orders from Mayor Barry, has issued a subpoena for the same records, with a deadline of 4 p.m. today.
The investigations followed Washington Post reports based on chamber records that Denson had misappropriated thousands of dollars from chamber accounts over the past year. An accounting by the chamber's finance committee for 1979 and 1980 showed that Denson commingled his personal funds with chamber funds, $13,730 which are unaccounted for. Denson also took a series of steps during the year to promote his personal business interests, often using the name and financial resources of the chamber, the organization's records show.
Denson acknowledged in an interview that he may have broken some laws, but insists that he did nothing "intentionally illegal."