Mayor Marion Barry acknowledged yesterday that some District employes "violated elementary procedures" in aiding former deputy mayor Ivanhoe Donaldson in his scheme to defraud the city government of more than $190,000.
"There were some procedures violated and that is not unusual in bureaucracies," said Barry, adding that what occurred was no worse than recently disclosed instances of wrongdoing in the federal government and private corporations.
Barry declined to say whether he planned to investigate the conduct of six District officials who were linked in court documents to Donaldson's scheme. The mayor said there was "no indication they engaged in any criminal activity."
The mayor's comment that administrative procedures may have been violated went beyond his previous statements on the Donaldson case, in which he emphasized that his administration had closed the accounting loopholes that permitted the frauds to occur between August 1981 and April 1984.
Donaldson, a longtime friend and political adviser of Barry who served as acting director of the D.C. Department of Employment Services and deputy mayor for economic development, pleaded guilty Dec. 10 to charges of interstate transportation of fraudulently obtained funds, obstruction of justice and tax fraud. He faces up to 23 years in prison and up to $360,000 in fines.
Barry, at his monthly news conference, also took issue with comments made by City Council Chairman David A. Clarke, who said he had identified enough revenue to cover the pay increases for D.C. police officers approved earlier this week by the council.
Barry countered that the police contract, which he had opposed, would place pressures on a city budget already facing a "tight squeeze" because of a sluggish economy. He predicted that the three-year pay hike, which will cost $23 million more than the mayor's proposal, would result in reduced services or a tax increase.
On the Donaldson case, Barry said his lawyers advised him that it would not be "proper" to take any administrative action against the employes who were involved in the illegal scheme until a federal investigation of the case ends.
Barry would not say what he will do about the administrative violations other than: "I have a plan."
D.C. Auditor Otis H. Troupe, who was appointed by the City Council, announced last week that he will conduct an audit of the Donaldson affair and the role of the District employes.
The six city officials named in the court document are Curtis McClinton, deputy mayor for economic development; Matthew Shannon, director of the Department of Employment Services; James George, Employment Services deputy director; Robert Robinson, administrative officer for the office of the mayor; Sandra Hill, a former employe in Employment Services and now an assistant to the public works director; and Lillian Manson-Neal, Employment Services associate director for contracts and support services.
Barry did not specifically address which actions by D.C. employes he considered violations, except in the case of a $65,000 contract given to the Poor Peoples Development Foundation. The contract, which prosecutors said was the final transaction in the systematic theft scheme, was one in which Donaldson ordered the issuance of checks after he had left District government to join E.F. Hutton & Co. as a vice president.
"That was wrong," Barry said, alluding to Donaldson's influence over city workers.
According to the prosecutors, a $32,500 advance was paid to the Poor Peoples Foundation in violation of D.C. government procedures and the final payment for the same amount was made despite the fact that the work product was not completed.
Prosecutors said they were given two versions of how the contract was authorized. According to the first version provided by Shannon, McClinton told him that Donaldson wanted a contract given to the foundation, operated by Cornbread Givens. Shannon said he simply passed the information along to George who, with Neal, authorized and monitored the contract.
George told prosecutors, in the second version of what happened, that it was Shannon who ordered that the $65,000 contract be awarded to Givens.
George also was cited elsewhere in the prosecutors' account as the individual who approved checks on at least five occasions without supporting documentation. Donaldson converted those checks, in two instances with the help of Hill, to his own use