Before he disgraced himself as President Nixon's attorney general and was sentenced to 14 months in prison for his part in the Watergate scandal, John Mitchell was a high-priced bond lawyer in New York.
The dour, pipe-smoking Mitchell reigned for years as the master of the complexities of municipal bonds and notes.
When the late Gov. Nelson Rockefeller encountered legal obstacles to using New York state funds to finance his grandiose urban redevelopment plans, it was Mitchell who helped dream up something called "moral obligation bonds," which were used to finance the statewide projects.
Mitchell's own moral obligation had little value. As Nixon's top law enforcement officer and political adviser, Mitchell became a key figure in the Watergate break-in and subsequent illegal administration cover-up. He served 14 months in jail after his 1975 conviction for perjury, conspiracy and obstruction of justice.
Since then, Mitchell seemed to have faded into the nation's collective subconscious -- a brooding figure who works for an international consulting firm in Washington who rarely turns up in the news columns. But all that changed a week ago, when Mitchell chose to trash the District of Columbia government during a rare interview with Credit Markets, a bond industry trade publication.
Mitchell, never a fan of home rule in the predominantly black city, likened the D.C. government to the "Amos 'n' Andy Taxi Cab Co." He declared that the District would never be fit to issue municipal bonds and notes, as it is now in the process of doing, until its officials "become sufficiently educated so that they can conduct the District's affairs as a proper business enterprise."
D.C. City Council Chairman David A. Clarke immediately labeled the remarks as "racist." Mayor Marion Barry and Deputy Mayor for Finance Alphonse G. Hill, perhaps more shrewdly, dismissed Mitchell's remarks with mild irritation and humor.
"Mr. Mitchell has been away for some time, and unfortunately he is out of step with what is happening in the District," Hill said. "It is incumbent on him to update his thinking before he provides the press with his asinine comments."
At his news conference last week, Barry joked that Mitchell hadn't been fully rehabilitated during his prison stay. "I guess he hasn't learned to tell the truth," Barry said.
D.C. officials are downplaying the importance of Mitchell's remarks, but they couldn't have come at a worse time.
The District, which recently obtained clearance from Congress to begin borrowing from private investors, is preparing to market $80 million worth of long-term bonds to refinance loans from the U.S. Treasury.
In October, the city sold $150 million worth of short-term revenue anticipation notes after receiving the highest credit-worthiness ratings possible for that issue from Moody's Investors Service and Standard & Poor's.
But there are indications that the city will receive a lower rating for its proposed long-term bond issue, which would result in the District having to pay higher interest rates to borrow the funds.
Clearly, any last-minute negative statements or controversy over the District's handling of its finances and programs -- even Mitchell's repugnant and dubious statements -- cannot help the city in obtaining the most favorable bond rating.
In an interview this week, Hill insisted that Wall Street and investors would not be swayed by Mitchell's comments.
"I find it difficult to believe that anyone would use his statement," Hill said. "I don't think the financial market will react to it," he said.
A high-ranking executive from one of the two rating services agreed that Mitchell's comments would have little impact.
"To be perfectly honest, whatever he had to say about the District of Columbia went in one ear and out the other," the official said.