Barbara A. Bullock, the former president of the Washington Teachers' Union, and Joy A. Arnold, a former top aide to D.C. Mayor Anthony A. Williams, pressured a city agency head to award a $296,500 contract to a friend of Bullock's, according to a D.C. auditor's report released yesterday.

Bullock used her position to influence Arnold, then the mayor's acting chief of staff, to engage in improper contracting practices, Auditor Deborah K. Nichols said in the report.

Charles F. Holman III, who was director of the D.C. Office of Human Rights in 2001, accused Bullock and Arnold of directing him to award a noncompetitive contract for legal work to the firm of Curtis Lewis, the brother of former union treasurer James O. Baxter II.

"The auditor found that excessive entanglement of the District government with private interests compromised the process and allowed Curtis Lewis to gain an unfair foothold in the contracting process," the report said.

Since the auditor began the investigation in May 2003, Bullock has been sentenced to nine years in prison after pleading guilty to embezzling $4.6 million in union funds from 1995 to 2002.

Arnold left the mayor's office in July 2003 to work as a senior adviser to the president of the National Capital Revitalization Corp., the District's publicly chartered economic development firm.

Arnold, who said she had not seen the report, declined to comment on the findings. Sharon Gang, a spokeswoman for the mayor, also said that Williams (D) had not reviewed the report. Neither Holman nor his attorney could be reached for comment.

Questions surrounding the contract surfaced when Holman filed a lawsuit in U.S. District Court in September 2002 alleging that he was dismissed improperly. Although there had been two accusations of racial discrimination and some complaints by his workers about his management style, Holman said that his dismissal was tied to his initial refusal to award the contract to Lewis's firm.

In the report, Nichols does not comment on Holman's personnel issues, but she does conclude that the city had violated its procurement rules when it awarded the contract.

Lewis's firm was hired to conduct investigations of discrimination complaints and to draft letters on findings. In all, Lewis was awarded three contracts, even though the quality of his work was substandard, the report says.

The report also says that Bullock was involved in meetings with the mayor's office about how Lewis would be paid, and that she urged that he receive the amount of compensation he had requested.

At one point, Bullock became agitated and "demanded" that the contract be awarded to Lewis, the report says. The auditor adds that Holman gave in to the "political pressure" exerted by Bullock.

"As a result, he permitted the [mayor's office] and Barbara A. Bullock to determine the terms, conditions and manner of awarding the third contract with Curtis Lewis," the report says.