District officials pride themselves on taking socially responsible stands. For example, late last year they adopted a law that requires the city to withdraw investments from banks or other financial institutions that operate in racially segregated South Africa or make investment loans there.
The City Council passed the bill, Mayor Marion Barry signed it and the measure went into effect in March.
But when it came time for the District to issue $150 million in short-term notes two weeks ago, the Barry administration chose as its chief underwriter Salomon Bros. Inc., a New York firm with ties to Anglo American, South Africa's largest and most influential corporation.
Proponents of the law, including City Council member John Ray (D-At-large), its chief sponsor, howled that Barry had violated "the spirit," if not the letter, of the legislation. A loophole allows the city to contract with or purchase from companies with South African connections.
But the administration's actions merely underscored a harsh reality that, when it comes to big-time municipal financing, it's not always easy to put principle ahead of interest.
Salomon Bros. is one of the largest private banking firms in the United States and has worked with District officials over the past three years in devising a strategy for the city to enter the private financial markets without assistance from the U.S. Treasury.
The connection between Salomon Bros. and the South African firm is several times removed, but unmistakable. Anglo American owns Minerals and Resources Corp. of Bermuda, which in turn owns 22 percent of the total shares of Phibro-Salomon Inc., a publicly held international investment banking firm that controls Salomon.
District officials, anxious that their first big effort at short-term borrowing take place without a hitch, stuck with Salomon Bros. and risked taking some heat for doing business with a firm with South African connections.
"Looking at the face of it, one might say the spirit, or intent in using Salomon Bros. is on the borderline, but I don't think so," Alphonse G. Hill, deputy mayor for finance, said last week.
Hill insisted that the city's use of Salomon Bros. is permissible under the law. However, he conceded that the legislation may need some fine-tuning to clarify some gray areas. "We're not interested in violating the letter or intent of the law," Hill said.
Still, there are those who are upset that the Barry administration wasted little time in skirting legislation that many in this predominantly black city feel is important in signaling strong displeasure with South Africa's apartheid policies.
"Here's a company that's going to handle $150 million worth of city bonds and they D.C. officials didn't take the South African connection into consideration," said Ray.
Angered by reports of South African government raids on 30,000 homes in black townships, Ray last week introduced a bill that would eliminate the loophole in the D.C. law. He had planned to wait until January to introduce the measure, but decided something had to be done right away.
"We must send as strong a message as we can to the South African government that we cannot, and will not, support apartheid," Ray said.
Another critic of Barry's action, who declined to be identified, recalled that the administration had come down hard on Frank Higgins, former chairman of the D.C retirement board, when Higgins argued against the legislation because it would put a crimp in the board's investment strategy.
Yet now the administration is ignoring the spirit of the new law when its serves its purposes, the critic said. "It's a double standard," he said.
Barry announced last week the kickoff of a new awards program to honor D.C. employes for distinguished service to the District. Awards and plaques will be given in 14 categories, including "Distinguished Public Servant," "Outstanding Employe Suggestion" and "Technology Application Award."
Not surprisingly, the most coveted award is "Employe of the Year," which carries a $3,000 cash prize. Winners will be announced during a bash at the D.C. Convention Center May 24.