Mayor Marion Barry's administration is anxious for the District government to begin issuing millions of dollars in tax-exempt revenue bonds this year. The mayor says that the bonds could prove to be an invaluable tool in stimulating economic growth and bringing new jobs to Washington.
But as Barry and City Council members understand quite well, the bonds also constitute an important potential source of patronage to be dispensed to benefit favored businessmen and lawyers.
The businessmen who are allowed to finance construction or expansion with low-interest District revenue bonds that are indirectly subsidized by the federal government will save millions of dollars in interest payments on their loans.
About 30 businesses and nonprofit groups have applied for bonds so far, and more are expected.
Barry already has doled out a substantial hunk of patronage by retaining three law firms to serve as bond counsels. The firms will be entitled to large legal fees for handling the bond issues, including one percent of the gross proceeds from the bond issues, after making certain deductions.
Robert B. Washington Jr., a political ally of the mayor's, and his law firm of Finley Kumble Wagner Heine Underberg & Casey, were retained to handle industrial revenue bond issues.
The firm of Melrod Redman & Gartlan will oversee bond issues to nonprofit groups. And Reynolds Mundy & Gibson, a minority law firm, will serve as cocounsel in issuing both industrial and nonprofit revenue bonds.
Barry recently ended the city's contract with attorney James L. Hudson, who for years served as the District's bond counsel, and who also coincidentally advised Patricia Roberts Harris in her unsuccessful campaign against Barry last fall.
The political importance of the city's plans to step up the use of revenue bonds was underscored by the jockeying for control now going on at the District Building. Last week, Ivanhoe Donaldson, deputy mayor for economic development and Barry's top political adviser, testified before a council committee that while the council alone has the authority to issue revenue bonds, the mayor's office should retain authority to "receive and process" the applications.
In this way, Barry's office would continue to control the flow and timing of action on proposed bond issues. Businessmen who are unhappy with the reception they get from the mayor's office wouldn't be able to take their case directly to the city council.
Also, council members Charlene Drew Jarvis (D-Ward 4) and John A. Wilson (D-Ward 2), are struggling behind the scenes for control of the revenue bond applications once they reach the council for action.
Jarvis, chairman of the Housing and Economic Development Committee, proposed that her committee be given principal jurisdiction for reviewing requests for revenue bond issues--a responsibility currently entrusted to Wilson's Finance and Revenue Committee.
Wilson, irritated by Jarvis' efforts to wrest control, plans to ask the full council to rule that his committee should handle all future requests for revenue bonds.
Jeffrey N. Cohen, a Washington developer and banker, said last week that revenue bonds could prove to be a major boon to the city, but he fears that conflict or misunderstanding between the mayor's office and the council could snag the whole program.
"It's got a potential for being a huge mess," Cohen said.
The mayor and the Hotel and Restaurant Employees Union Local 25 did a little fence-mending last Tuesday when the mayor made a surprise appearance at the installation of union officiers.
Local 25, which represents about 10,000 workers at more than 100 restaurants and hotels, endorsed Harris over Barry in last fall's Democratic mayoral primary. Moreover, Ron Richardson, the union's executive secretary-treasurer, has criticized Barry on a wide range of issues, including changes in the District's unemployment compensation law.
But last week Barry was all smiles at the Howard Inn as he praised Richardson and Minor W. Christian, the union's president for their unopposed reelection. "I would have voted for them too," Barry said.
The mayor even pledged his support--in advance--for plans to unionize the new 700-room Marriott Hotel when it opens across the street from the District Building.
"We've got to figure out a way to deal with that Marriott," Barry said. "I don't want a big 700-room hotel to open up that doesn't let workers decide what they want. It'll be a tough struggle with J.W. (Bill) Marriott."