Officials of P.I. Properties Inc. created a separate company to provide security guards for the dilapidated Clifton Terrace apartment complex in the mid-1970s and then routinely tapped the security firm's checking account to pay for nearly $13,000 in personal expenditures, P.I. Properties' former bookkeeper testified yesterday.
Zellene Laney, 37, one of the government's key witnesses at the fraud and conspiracy trial of Mary Treadwell, president of the defunct P.I. Properties, testified that Treadwell and two other P.I. Properties officials wrote 15 checks out of the account, including a $1,000 check to pay for a Jamaican vacation for Treadwell.
"It was Miss Treadwell's Christmas bonus," Laney said during more than 3 1/2 hours of testimony on her third day on the witness stand.
Asked by Assistant U.S. Attorney William D. Pease whether any Clifton Terrace tenants accompanied Treadwell on her trip, Laney replied, "No, and me either."
P.I. Properties was a real estate affiliate of the Youth Pride self-help organization that trained many of Washington's jobless in the 1970s. According to Laney, P.I. Properties contracted with another Treadwell-run, Pride spin-off company, Pride Economic Enterprises Special Police, to provide security guards at Clifton Terrace.
Laney said the Special Police firm was paid about $8,500 a month to provide security at Clifton Terrace and another apartment complex managed by P.I. Properties, the Kenesaw on upper 16th Street NW. The bookkeeper testified that the guards' salaries only totaled only about $3,000 a month.
Laney said that Treadwell and two other officials of P.I. Properties, Robert E. Lee, the firm's general manager, and Joan M. Booth, Treadwell's sister who was Clifton Terrace's project manager, used the Special Police account to pay expenses totaling nearly $13,000 in the mid-1970s. Lee and Booth have pleaded guilty to conspiracy and other charges in the case and may be called as witnesses against Treadwell.
HUD had sold the Clifton Terrace complex to P.I. Properties in 1975 and to a limited degree monitored the firm's expenditures. By 1977, Laney said, HUD wanted 16 to 18 monthly expense reports prepared that P.I. Properties had neglected to file with the federal agency.
Laney said that, after a HUD audit, the firm reimbursed HUD for some improper expenses, as well as a bit more money to "make it look a little better for us."
But when Laney complained to Lee about the altering of records, she recalled Lee telling her "that I would do the books the way Mary wanted them done because she was the boss."
Among other things, prosecutors have focused on Treadwell's attitude toward the impoverished tenants at Clifton Terrace.
Pease questioned Laney about the living conditions at Clifton Terrace, where Laney lived for 3 1/2 years while working for P.I. Properties. "Living at Clifton Terrace is an experience like no other," Laney said. "There were times you were ashamed to go into the buildings because they were so dirty. I was a tenant like everyone else, and I got tired of not getting the service we deserved."
But Laney said that when she complained to Treadwell about the conditions, Treadwell replied that the tenants there were "just ignorant niggers."
John W. Nields, Treadwell's court-appointed defense attorney, started his cross-examination of Laney yesterday and drew an admission from her that some of her 1981 grand jury testimony about Treadwell's financial transactions may not have been totally accurate.
"At this time in 1981 I was not trying to remember that hard," Laney told Nields. "I was not trying to help the prosecutors at all."
Laney, who replied to Pease's questions matter-of-factly, turned hostile toward some of Nields' suggestions that she had lied in previous testimony in the case.
"Isn't it true that for the last 3 1/2 years you have made repeated false accusations about Miss Treadwell . . . . ?" Nields asked.
"Mr. Nields, no, that is not true," Laney heatedly replied.