D.C. Department of Employment Services Director Matthew F. Shannon, Deputy Director James George and two other agency officials have been placed on administrative leave with pay for their reported roles in the Ivanhoe Donaldson corruption case, Mayor Marion Barry announced yesterday.
Barry said the facts in the case remained "confused" and did not rule out further action once a criminal investigation by a federal grand jury is completed.
"I feel satisfied now that what we have done is sufficient at this time to assure the public of the integrity of the agency and of the integrity of its programs," he said.
The mayor, speaking at a news conference the day after his former top aide Donaldson was sentenced to a seven-year prison term for stealing more than $190,000 in city funds and orchestrating a coverup of his crimes, took the offensive in containing the biggest scandal to touch his seven-year administration.
Following several days of meetings with close advisers and the officials who were removed, Barry:Sharply disputed U.S. Attorney Joseph E. diGenova's assertion Monday that the District government has inadequate financial controls and major problems in the awarding and monitoring of contracts to consultants and private firms. Established through executive order a public integrity unit within the D.C. police department to investigate criminal wrongdoing involving D.C. employes. He said this will augment the work of the D.C. inspector general's office, which, he said, primarily performs audits and management reviews. Announced he soon will set up a special telephone hot line at the inspector general's office to receive tips alleging wrongdoing in the city government. Declared that the federal grand jury investigation had gone on "too long" and said he had asked diGenova to "speed up this investigation . . . . " Barry said diGenova had "assured me that within the next 30 to 60 days he would try to bring the matter to a conclusion."
Barry named Floyd S. Goff, currently a deputy director of the Employment Services Department, to be the department's acting director, replacing Shannon. He named Charles Simpson, an official in the D.C. controller's office, to assume George's duties as deputy director in charge of finances and administration.
Also placed on leave with pay were Lillian Manson-Neal, associate director for contracts, and Cornelius Haynes, a grants management supervisor.
Barry, who in the past has accused diGenova of being out to get him, said the U.S. attorney's office on Monday had made some "misleading, dangerous and irresponsible reflections on our government."
"One would get the impression that there are no controls and that everybody around here is a thief and that the mayor did not ferret it out when he finds out about it," Barry said.
DiGenova declined to respond yesterday to Barry's criticism of his characterization of D.C. government, and said "the facts speak for themselves."
He denied that he promised the mayor that he would limit the investigation to 30 to 60 days, and vowed that the probe "will go on as long as it needs to get the facts and assess the culpability of all individuals. That may be painful for Barry and others, but unfortunately that is something that has to be done."
He said prosecutors had put sufficient information on the public record for the mayor to take whatever administrative action he needs to. "If he chooses not to, that is his decision," diGenova said.
In court documents filed Dec. 10, prosecutors detailed repeated violations of the agency's contracting regulations committed by Shannon, George and Manson-Neal while they obeyed Donaldson's orders to issue payments to associates who funneled the money back to him.
George personally authorized or gave instructions on how to handle seven checks totaling $42,000 issued to Donaldson's friends and associates, despite the lack of written justification for the expenditures, the documents stated. Shannon was involved in unjustified payments to two contractors who served as middlemen for Donaldson, prosecutors said. Manson-Neal helped set up a bogus $65,000 contract to antipoverty worker Cornbread Givens that was ordered by Donaldson, according to prosecutors.
Haynes was not named in those Dec. 10 documents, but was cited in a presentencing memo filed by prosecutors last week as one of several other Employment Services workers who were aware of irregularities but took no action to report them or halt them.
Barry defended his decision not to discipline other officials who were named in the prosecution documents. Robert Robinson, administrative officer for the mayor's office who was named as having issued two payments without supporting documentation, was spared discipline for now, Barry said, because he was not an agency head and did not have control over D.C. funds.
Barry did not respond to reporters' questions about D.C. Public Works official Sandra Hill, previously an Employment Services employe, who prosecutors said helped Donaldson cash forged checks, and deflected questions about Curtis McClinton, deputy mayor for economic development, who succeeded Donaldson in that post.
McClinton, according to prosecutors' documents, told Shannon that Donaldson wanted a $65,000 contract issued to Givens. According to an account Shannon gave to a grand jury of a conversation in early 1984, McClinton told him he had " 'talked to the coach Mr. Donaldson last night,' who told him that Shannon had 'some unfinished business with Cornbread Givens.' "
Barry noted that McClinton never gave testimony to the grand jury and added, "I've learned in life that people can say anything. The question is, can you corroborate it?"
Barry said his decision to place the four on leave may not be the final action. He said that he will continue to try to get to the bottom of what happened and that much depends on the outcome of the grand jury investigation.
Barry would not speculate on whether the officials could return to their jobs, but an aide said it is unlikely they will resume their positions. The aide said the mayor wants to give the officials due process and ample opportunity to respond to the latest disclosures.
Barry called on Acting Inspector General Vernon Gill to recount the city's investigation of Donaldson and Alphonse G. Hill, deputy mayor for finance, who said the city's system of financial controls was in good shape. Barry again claimed credit for uncovering the wrongdoing that led to Donaldson's conviction.
Barry said it was the more detailed information contained in the sentencing memo filed last Thursday that caused him to act yesterday to dispel a cloud over the agency. But City Council Chairman David A. Clarke, who is preparing a bill to create an independent city investigative unit, questioned Barry's failure to act sooner.
"The mayor can't have it both ways," Clarke said. "If the mayor's work in unraveling this is as thorough as he says it was, it seems to me he could have known about these same things that came out Thursday in the sentencing memo before then."