The director of the District's ethics office said last week that companies that hold contracts with the city can give unlimited cash, land and other gifts to the District treasury without running afoul of conflict-of-interest laws.
Keith Vance, director of the D.C. Office of Campaign Finance and Ethics, said that there are "frequent" gifts of property and cash to the city treasury, but they do not violate District regulations unless it can be proved the gifts influence an official's decision.
"They give land, they give money," said Vance, citing the recent gift of 100 computers to the D.C. public schools by IBM Corp. Using a hypothetical example, Vance said, "There's no illegality if Datacom a city contractor gives $1 million to the city. It doesn't mean that public works has prejudice to give Datacom a contract."
A former consultant to Datacom Systems Corp., which has contracts to assist several cities with their parking ticket operations, was charged last week with making $20,000 in payoffs to a former New York City parking official, and a Datacom vice president was charged with extorting $150,000 from a New York subcontractor.
D.C. Public Works Director John Touchstone has acknowledged that he improperly accepted free travel and hotel accommodations from Datacom. Vance said that as he interprets and applies the policy on gifts, Touchstone's error was not in accepting the travel and lodging, but rather in failing to have Datacom pay the District treasury directly for them.
John Malin, director of the Council on Municipal Performance, a New York research group, said it is unusual for cities to accept gifts from companies or individuals doing business with the city.
Touchstone disclosed in January that he and an aide accepted a trip to New York from Datacom, which receives an estimated $4 million from two District public works contracts. On Thursday, Touchstone said he and the aide accepted lodging in Philadelpia from Datacom when they were in the city in 1985.
"He should have had Datacom send the check to the D.C. Treasurer," Vance said. "Under our law, Datacom has a perfect right to give a gift to the D.C. government."
Touchstone said the trips involved official business. He recently reimbursed Datacom for the expenses he and his executive assistant, Maria Timm, incurred.
Vance said Touchstone can ask to be reimbursed by the city for the trips because he was conducting city business. If Datacom then wanted to complete the circle by sending Touchstone's payment back to the city, it is a legal donation to the city, Vance said.
The trips involved District business, Vance said, because Touchstone visited Datacom operations in New York and because in Philadelphia, while Touchstone and Timm were already in the city, Datacom invited them to meet with Philadelphia officials who did business with the firm.
As director of the Department of Public Works, Vance said, Touchstone is one of a number of city officials with "gift authority," which allows a District official to accept gifts of up to $25,000 on behalf of the District. Under city regulations, Vance said, private firms cannot pay for officials' travel unless the official's agency has gift authority.
Because the city contracts won by Datacom were put out for competitive bids, although Datacom was the only bidder, Vance said he is satisfied there was no impropriety caused by acceptance of the trips.
"It would be inappropriate for me to go on a fishing expedition," he said. "If I receive information that Datacom got favorable treatment, this could open it up further."
As a result of Touchstone's disclosure of the second trip, which was made to Vance two weeks ago, a special meeting of Mayor Marion Barry's cabinet was held March 21, according to Annette Samuels, the mayor's press secretary.
Vance also said he is sending letters to top officials in the Barry administration to instruct them that travel is included in the definition of a gift. "My office requires that public officials report gifts of $100 or more that are made to them," Vance said, "and the gift definition does not clearly say that travel is a part of that."
Vance added that because Touchstone has satisfied District reporting requirements by amending his gift forms and reimbursing Datacom, he considers the case a "technical" violation that warrants no action by the city.