D.C. Rent Administrator John Hampton, who oversees the office that administers the city's rent control law, received a home purchase loan of nearly $10,000 in 1981 from James G. Banks, who was then the Washington Board of Realtors' executive vice president and a lobbyist for the board.
Hampton and Banks said in recent interviews that the July 1981 loan was in the form of a deed of trust on a house that Banks sold to Hampton and that the loan had been repaid.
At the time of the loan, Hampton was special assistant to the rent administrator and Banks acknowledged that he had rental property registered with Hampton's office. Hampton and Banks, however, said they did not consider their business deal a conflict of interest.
Hampton, who bought the Northeast Washington house as his personal residence, said he consulted a lawyer about the purchase and "I followed his advice." Hampton reported the loan when he filed an amended 1982 financial disclosure report with the D.C. Office of Campaign Finance in January 1983.
Banks "is an old friend of mine, a longtime friend," said Hampton. "He just took back a mortgage temporarily."
According to records in the D.C. Department of Finance and Revenue, the house, at 2918 26th St. NE, had an assessed value of $32,315 in 1981. Banks said he sold the house to Hampton for $25,000 because there was extensive termite damage. Hampton later built a new house on the foundation.
Keith Vance, who was deputy director of the Rental Accommodations Division in 1981 and 1982 and is now director of the campaign finance office, said yesterday that he had been unaware of the loan to Hampton.
"I am concerned," said Vance, who supervises the enforcement of the city's ethics and conflict-of-interest laws. "But I do not have sufficient facts to make any judgment one way or the other."
City records show that after Hampton became rent administrator in 1983 he questioned the actions of an employe in his office, Norman Smith, who had received a $3,000 loan from a landlord in July 1981. Smith was dismissed for soliciting and accepting the loan from the landlord, whose rental property fell under the jurisdiction of the Rental Accommodations office.
In a letter sent to Smith in 1984, Donald G. Murray, then acting administrator for the Department of Consumer and Regulatory Affairs, said that Smith's actions in requesting and accepting a loan from the landlord had violated procedures in the District's personnel manual and the D.C. Code.
Smith was told that employes should refrain from any action "which might result or give the appearance of their using public office for private gain" and should not solicit or accept any loan "from a person who singularly or in concert with others conducts operations or activities that are subject to regulation by the D.C. government."
Smith has appealed his case to the Office of Employee Appeals and is expected to have a hearing in June. His attorney, Simon Banks, questioned why no action had been taken against Hampton for accepting a loan from a landlord when he was in a position of greater authority than Smith.
"We insist that the ethical standard used by Hampton and the Consumer and Regulatory Affairs Department against Smith, who is innocent of any wrongdoing, be equally, strictly applied to Hampton," said Banks.
As the District's rent administrator, Hampton's responsibilities include drafting rules and procedures for the administration of the rent control law and receiving complaints and petitions from landlords and tenants about rent increases and evictions.
At the time of the loan, James Banks was a top official and lobbyist for the Washington Board of Realtors, which has long favored weakening the city's rent control law.
Lucenia Dunn, a spokeswoman for the Consumer and Regulatory Affairs Department, which includes the Rental Accommodations office, said yesterday that the department's research shows that "Mr. Hampton has no role that affects the interest of Mr. Banks in relationship to this department."
James Banks and Hampton stressed that Hampton's home purchase loan was merely a business transaction between friends and had no bearing on the positions that they held.
James Banks said it was no secret that the Washington Board of Realtors has always opposed rent control, but that he never lobbied the Rental Accommodations office.
"There wasn't any conflict then and there isn't now," said Banks, who is a consultant and lobbyist for the Board of Realtors.
In buying the property from Banks for $25,000, Hampton assumed a $14,000 mortgage on the house while Banks agreed to hold a deed of trust for the remaining $9,600 for three years at 13 percent interest.
The Federal Home Loan Bank Board shows that the interest rate for conventional financing in 1981 was 14.77 percent. District property records show that Banks' deed of trust was marked "paid and canceled" in November 1983.
Hampton said that he secured the loan from Banks and another loan of $14,000 from Hyattsville builder A. Frank P. Rubino, because the house, which was in poor condition, didn't qualify for a federally insured loan. Hampton said he renovated the house himself, obtained financing and repaid Banks and Rubino in 1983.