Ten people took the witness stand yesterday to bolster Mary Treadwell's defense against fraud and conspiracy charges, including some who testified that the financial practices she followed with the Clifton Terrace apartment complex in the mid-1970s were not unusual, and others who vouched for her honesty.
G. Richard Dunnells, a former acting assistant secretary of Housing and Urban Development, disputed the government's contention that P.I. Properties, Inc., the real estate firm that Treadwell headed, illegally had accepted a management fee to operate the dilapidated Clifton Terrace apartments at a time when the complex was steadily deteriorating.
Dunnells, who is now a Washington lawyer, said that a management fee--under which P.I. Properties was paid 7 percent of the monthly rent receipts at Clifton Terrace--"is an expense of a project. It's an normal or usual operating expense."
Moreover, Dunnells said, once HUD had approved the management fee the agency had "no concern with how it's used" and that it would have been HUD's responsibility, not that of P.I. Properties, to ask that the money be used to offset the firm's substantial operating losses.
Prosecutors have argued that a HUD provision prohibited Treadwell or other officials of the nonprofit P.I. Properties firm from receiving any of the rent monies.
Dunnells said, however, that this provision applied only to the distribution of year-end profits, not to a basic fee paid to the operating manager of an apartment complex.
Dunnells' testimony came on the 25th day of Treadwell's trial. She is accused of using P.I. Properties to defraud the federal government and the impoverished tenants at Clifton Terrace of thousands of dollars to enrich herself.
Her defense attorneys hired Donald R. Simpson, a consultant on executive compensation, to analyze Treadwell's income for the years from 1974 to 1978 to determine whether the money she received had been reasonable compensation for the amount of responsibility that was hers in operating P.I. Properties and several other firms.
Simpson testified that Treadwell's pay, which had averaged $48,680 during those years, "was quite reasonable."
During that time, Simpson said, an average of $15,060 a year came from P.I. Properties. He said that, compared with other firms, Treadwell's income from P.I. Properties ranked in the 25th percentile, meaning that three-fourths of the executives in similar companies were paid more.
Treadwell's character witnesses included Carroll B. Harvey, a cofounder with Treadwell of the 1970s job-training venture known as Youth Pride, attorney Dovey J. Roundtree, and a Pride alumnus, Gerald Bruce Lee, who is now a practicing attorney.
Harvey said that Treadwell's "reputation for strength, straightforwardness and honesty was clear to everyone in the community. Mary was as constant as the coming of the seasons."
Lee testified that Youth Pride had "encouraged me to do something with my life."
He described Treadwell as an administrator who "insisted on integrity from her staff."
Ella McCall, a former counselor at Pride, described Treadwell as "the most honest woman I've ever known, other than my mother."