Federal investigators have broadened an ongoing probe of D.C. government contracting to include the city's choice of bond underwriters and the award of several architectural and engineering contracts, according to city officials and contractors.
In addition, Mayor Marion Barry said in a telephone interview Thursday that a federal grand jury has subpoenaed records of his 1986 reelection campaign's expenditures and contributions. District officials said prosecutors asked for the financial records more than six months ago, apparently as part of a separate investigation.
Anita Bonds, who served as the mayor's campaign manager and now works as his general assistant, testified last week for the second time before a federal grand jury. She shook her head negatively when reporters asked if she were finished testifying.
Sources said yesterday that a grand jury subpoenaed certain architectural and engineering contracts after the disclosure May 22 of an FBI investigation that used an undercover agent to penetrate the city's contracting process.
One source said investigators are apparently attempting to determine whether former city administrator Elijah B. Rogers, an assistant managing partner with the accounting firm of Grant Thornton, played any role in the award of such contracts by the Department of Public Works.
The head of a local engineering and architectural firm, who asked not to be identified, said he was questioned by an FBI agent last week about whether contracts were divided among favored firms. He said he also was asked to describe relationships between Rogers, Public Works Director John E. Touchstone and Horace Jones, the agency's former deputy director and contracting officer.
A spokesman for the public works agency said yesterday that Touchstone could not be reached for comment. Jones, who resigned last year to work for an engineering firm, declined to comment.
Maurice Whalen, managing partner of Grant Thornton's Washington office, said, "Any such allegations" of impropriety "are totally groundless. They've been looking at Elijah for four years. He has nothing but the cleanest of hands."
The grand jury also recently subpoenaed records of D.C. bond deals from R.W. Corby & Co. Inc., a local investment banking firm that has helped underwrite a number of city bond issues. Three investment bankers who do business with the District also said in interviews that at least one other underwriting firm has received a subpoena.
The subpoena to R.W. Corby asked for records of bond issues since 1985 and records of the firm's political contributions. A spokesman for the firm said, "We understand that we are not a target of this investigation and that other firms have received subpoenas as well. We are cooperating fully with the investigators."
Sources said the company's employment of Alphonse G. Hill after he resigned as deputy mayor for finance in March 1986 may be of interest to prosecutors. Hill, who is no longer connected to the firm, pleaded guilty in May to defrauding the government and income tax evasion and is serving a prison sentence.
Sources said FBI agents have also interviewed Wardell Lazard, the president of a New York-based investment banking firm that serves as one of the city's financial advisers on bond deals.
Lazard's firm, W.R. Lazard & Co. Inc., said in a statement, "As one of the District's financial advisers, it is our intention to cooperate fully with any investigation involving the District, as it is our policy to cooperate in any inquiry involving any of our clients."
The mayor, asked about the apparently broadened scope of the investigation, characterized the probe as a "fishing expedition."
"Throw out a big net. Parade people before a grand jury . . . . A lot of it is just fishing," he said.
The mayor said he found it strange that no one has been charged with a crime 11 weeks after disclosure of the undercover investigation. "Two months of things going on since then and no indictments," he said. "Check with other U.S. attorneys' offices. That's unusual."
He said that after the D.C. police department announces an undercover operation, "we make arrests." He characterized U.S. Attorney Joseph E. diGenova's effort in part as "theatrics," but acknowledged, "There may be some things that aren't right. I don't have the powers of the FBI. I can't subpoena and wiretap people."Staff writer Nancy Lewis contributed to this report.