Citicorp said yesterday that the $28,200 the banking giant gave Woodrow Boggs Jr., the political adviser to D.C. City Council member Charlene Drew Jarvis, was a contract fee for Boggs' help in satisfying the council's community investment rules.
Citicorp, elaborating for the first time since confirming Friday that the payments were made, said through a spokesman that Lucius P. Gregg, a Citicorp vice president in charge of the banking giant's lobbying of the D.C. government, paid Boggs the money "for a consulting contract to help in preparing Citicorp's community investment plan."
The contract was signed weeks after the council gave final approval Jan. 14 to legislation backed by Jarvis to allow Citicorp and other bank companies outside an 11-state region to enter the District.
The new law requires the banks to make substantial investments in the city, including creating 200 jobs and providing $50 million to $100 million in loans and credit to development projects in poor neighborhoods.
Jarvis (D-Ward 4), chairman of the council committee that oversees bank licensing in the District, has directed representatives of Citicorp and four other major bank holding companies to meet with Boggs in the last year to discuss how to win council approval to open or acquire banks in the District, although Boggs has no official connection with the council.
Jarvis has said that Boggs had functioned merely as a sounding board for her. Disclosure of the payments, however, makes public a longstanding private debate among lawmakers and business leaders over whether Boggs has used his close relationship with Jarvis to enhance his private consulting business.
Squire, Sanders & Dempsey, which represents the four other bank holding companies -- Chase Manhattan Corp., J.P. Morgan & Co., Chemical New York Corp. and Bankers Trust New York Corp. -- said yesterday that it is upset that it was told to discuss business strategy with Boggs without being told that he was on the payroll of its clients' archrival, Citicorp.
Citicorp, which has recalled Gregg to New York pending the outcome of its internal investigation of the payments, has said that Gregg was the only Citicorp official to authorize the payments.
Several council members said yesterday after their meeting that they, too, were disturbed by reports during the weekend that Gregg had authorized the payments to Boggs.
Council member Frank Smith (D-Ward 1) said the authorization of funds to Boggs "certainly detracts from the image of the council . . . . As competitive as the council is, I don't think anybody is gloating over this because it taints all of us."
"It reflects very badly on the council," said another council member.
U.S. Attorney Joseph E. diGenova said Friday that federal prosecutors have received allegations of possible improprieties involving Boggs and Jarvis in connection with out-of-state banks. He said his staff is evaluating the information to determine whether an investigation is warranted.