The D.C. Office of Inspector General has been investigating for more than a year allegations that Deputy Mayor for Finance Alphonse G. Hill improperly defaulted on a personal Small Business Administration loan, officials said yesterday.
Inspector General Joyce Blalock concluded in an initial report to Mayor Marion Barry last fall that "there was no criminal violation" involving Hill, according to Annette Samuels, Barry's press secretary.
Blalock, who can recommend civil, criminal or administrative actions against city employes, declined to comment yesterday on the substance of the allegations or the nature of the investigation. She described the inquiry as "quasi-active," adding: "There are some matters left open that haven't been resolved."
Samuels said the inspector general's investigation began in the spring of 1982 and involves the same allegations cited in a civil suit filed by the U.S. attorney's office Tuesday in U.S. District Court.
In that suit, the federal government contends that Hill and his wife, Jeweline, concealed and lied about $50,000 in personal assets that could have been used to help pay off the defaulted SBA loan in 1977, before Hill joined the city government.
Hill and his wife were due back from a vacation in Jamaica late last night and were not available for comment.
Hill's attorney, Dovey Roundtree, said yesterday that the filing of the suit came as a surprise and that she had not discussed it with her clients. Roundtree said she had not heard from the inspector general since last fall. "As far as I'm concerned, that investigation was concluded in his favor," Roundtree said.
"It was a long, extended investigation," said Roundtree. "We presented them with extensive documents. We presented whatever was lawful that they wanted. They couldn't get him on a criminal charge so they came back on a civil charge."
Hill, a Chicago accountant whom Barry hired as city controller in 1979, was promoted by Barry to deputy mayor in January to oversee all of the city's finances.
Samuels, who said Barry has been kept informed of the inspector general's investigation, said yesterday that Barry regards the allegations "as a personal matter" for Hill and would not comment on them. Samuels said the allegations investigated by the inspector general do not involve the use of any city funds.
The U.S. attorney's civil complaint contends that the Hills obtained SBA-guaranteed loans totalling $123,000 to buy and operate a Chicago laundry and dry-cleaning business, which they purchased in 1974 with a third partner.
In 1977, according to the suit, Hill and his wife defaulted on the loans and asserted in a written statement filed with the SBA that they had no means of paying off the loans. Based on their statement, the suit said, the claim was settled by a payment of $1,300 from the Hills.
The suit contends that at the time Hill and his wife settled the claim, they had $50,000 in U.S. Treasury bills, money market funds, and certificates of deposit.
The suit, which law enforcement officials said was sought by the SBA, asks recovery of the $123,000 plus interest and a penalty of another $123,000 under the federal False Claims Act.
Roundtree said yesterday that she had met at least three times last year with the D.C. inspector general to go over the SBA claims. Calling Hill "a fine and aggressive young man in this town," she said the suit was "highly regrettable."