A. Jeffrey Mitchell, a close friend of D.C. Mayor Marion Barry who is expected to testify today at Barry's drug and perjury trial, is the subject of an FBI investigation into allegations that he bribed Bahamian officials in 1987, in part using money from Barry and another witness in the mayor's case, law enforcement sources said yesterday.
Mitchell, a Washington advertising executive, owns the Bahamian Media Connection Ltd., a Nassau-based company that won a contract to manage advertising space at Nassau International Airport. According to sources, the FBI has interviewed Bahamian officials in an effort to determine whether Mitchell paid $40,000 to secure the advertising contract in April 1987.
Mitchell, a longtime friend of Barry's from their days together in Pride Inc. in the late 1960s, could not be reached for comment yesterday. In previous interviews, he has said he obtained the Bahamian contract legitimately. The contract was for poster-type advertising at the airport, the same kind of advertising venture in which Mitchell has invested in the United States.
A law enforcement source said last night that no decision has been made on whether to seek charges in the matter, and that the investigation has been put on hold until after the Barry trial.
The FBI investigation started this year, sources said, after a former business partner of Mitchell's, Norman Beebe, told investigators that Mitchell had told him of the alleged bribe.
Beebe confirmed yesterday that he had provided information to the FBI, and he said Mitchell told him in 1987 that he had made a $40,000 payment to the Bahamians. Beebe said Mitchell told him he obtained $5,000 from Barry and $10,000 from Washington lawyer Lloyd N. Moore Jr.
Barry's attorney, R. Kenneth Mundy, said last night that he had not heard of Beebe's allegations or about the FBI investigation.
"I have no reason for believing that the mayor had any part of any such transaction," Mundy said.
Moore, who testified yesterday at Barry's trial and described several occasions on which he said he and Barry used cocaine, declined to comment about the FBI investigation involving the Bahamas.
The U.S. Federal Corrupt Practices Act prohibits payments to foreign officials in return for official favors.
Beebe, who has broken his business ties to Mitchell and is being sued by Mitchell in D.C. Superior Court, said yesterday that the Bahamian contract led to his falling out with Mitchell. Beebe also said Mitchell asked him to make a contribution toward the $40,000 payment.
Moore and Barry had not been involved in Mitchell's Bahamian airport contract before Mitchell's request for funds, Beebe said. "With regard to Barry's amount, Jeff said that it was a cash payment, and it was in the form of a loan" from Barry to Mitchell, Beebe said. "Somewhere down the line, there was the understanding" that the mayor would have part of any future profits from the airport contract. Beebe said Mitchell did not tell him whether he obtained the $10,000 from Moore in cash or in a check.
Beebe said he had an agreement with Mitchell that their jointly owned advertising company, BMY Enterprises, would handle the sales and marketing of advertising space at the airport and would receive 15 percent of the commissions. Mitchell, however, did not adhere to that agreement, Beebe said.
In a six-page memorandum to the FBI dated March 13, 1990, Beebe said that Mitchell stated he had been told by an associate of Bahamian Prime Minster Lyndon O. Pindling that Mitchell would have to make a payment to the Bahamian officials in return for the contract.
"The government was happy with the contract . . . . As soon as Mitchell came up with $40,000 for Prime Minister Pindling, all systems were go," Beebe said in the memo. The money was to be paid, according to Beebe's memo, to a Bahamian lawyer named Bannister.
Everette Bannister, a Nassau businessman and close Pindling associate, has been linked to several improper payment schemes, including a 1982 undercover FBI operation in which an agent passed $10,000 in cash to Bannister at a Miami hotel, according to published reports. A few days after the operation, a $10,000 deposit was made into Pindling's bank account, according to the published reports.
Pindling and Bannister could not be reached for comment last night.
Beebe also said in the memo that he and Mitchell traveled to Nassau in March 1986 to meet with government officials about obtaining the contract. The initial contacts with officials in Nassau were arranged by Michael Larrow, a Bahamian hotel manager and friend of Mitchell's, Beebe said.
Eventually, Mitchell formed a Bahamian company, Bahamian Media Connection, with Larrow as the corporate secretary. The contract, signed by Bahamas Transport Minister Philip M. Bethel, gave Mitchell and Larrow exclusive rights to sell advertising space at the airport for five years. Bethel, reached at his Nassau home, declined to be interviewed.
The contract does not set out how much Mitchell's company would earn, but it said the company must pay the government $1 million or one-half the gross advertising receipts, whichever was greater. Beebe said he expected the contract would have been worth at least $5 million over five years. The company initially leased the advertising space, but the contract's current status could not be determined yesterday. Larrow, in a telephone interview last night, said Mitchell dropped him from the business, and he said he felt he had been misled by Mitchell's promises.
"I never received anything from the contract or from Mitchell," Larrow said. Larrow said Mitchell did not tell him about the alleged payment to the Bahamian officials. Staff writer Jim McGee contributed to this report.