Federal prosecutors have interviewed several key District government officials this week in an apparent acceleration of their probe into the leasing and financial activities of suspended D.C Human Resources director Joseph P. Yeldell and parking lot executive Dominic F. Antonelli Jr.
According to persons who have been questioned by prosecutors, the investigation is focusing on a possible connection between a $33,000 loan to Yeldell and a D.C. Department of Human Resources lease of an Antonelli-owned building. Public officials are prohibited by criminal statutes from accepting gratuities in any form for their public acts.
Among those questioned by the U.S. Attorney's Office is city a administrator Julian Dugas, Mayor Walter E. Washington's chief political adviser.Next to Yeldell, Dugas has figured most prominently in the city' decision to sign to controversial $5.6 million, 20-year lease for an old office building owned by Antonelli.
The building and other property, located at 60 Florida Ave. NE, was purchased by Antonelli for $800,000.Yeldell and Dugas urged leasing of the facility even though other city officials had earlier opposed the action, arguing that the terms of the lease were too expensive.
Dugas spent more than two hours with prosecutors on Thursday. Others know to have been interviewed include Sam D. Starobin, director of the Department of General Services; Sam Eastman, press spokesman for the mayor; Martin K. Schaller, executive secretary to the mayor: William H. Whitehurst, DHR's associate director of planning and state agency affairs; and Emmanuel Logan Jr., a small businessman who unsuccessfully tried to buy the Florida Avenue property himself to lease it to the city.
The Florida Avenue lease was the first of several decisions made by Yeldell, while he was DHR director, that benefited Antonelli financially, The Washington Post has reported.
Yeldell also approved extension of necessary development permits for Doctors Hospital to allow its directors to construct a replacement facility on property owned by Antonelli. And Yeldell tried to have the city purchase the Metropolitan Hotel, which is owned by a corporation in which is owned by a corporation in which Antonelli has a financial interest, as a re-location facility for physically disabled patients at Glenn Dale.
But it is the Florida Avenue lease that has become the focus of the federal probel, according to persons who have talked with prosecutors.
Those sources say prosecutors are particularly interested in the timing of the leasing agreement and how it might possibly relate to a $33,000 second trust loan made to a Yeldell on what appear to be preferential terms.
The building on Florida Avenue was the first property leased by Yeldell after the DHR director was given his own leasing and contracting authority by Mayor Washington in December, 1975.
Prior to that all DHR leases had to he approved by the Department of General Services, whose director, Starobin, had already once rejected the Florida A venue leasing terms as too expensive.
Negotiations to lease the building from Antonelli were not completed until April, 1976 although the millionaire developer and owner of Parking Management Inc. (PMI) did not actually sign the agreements to purchase the property from a previous owner until May 20 and 24.
The $33,000 loan to Yeldell was extended to him last May 25, just one day after Antonelli signed the Florida Avenue purchasing agreement. In July, the city began paying $22,063 a month in rent to Antonelli to lease the building as a community service center of the DHR agency.
Yeldell received the loan as a second trust on his home from a man indentified as John Halloran. Sources have told The Washington Post, however, that Halloran is not the actual lender and that Yeldell is repaying the loan to a man named Lawrence A. Sinclitico.
Sinclitico is named in public land records as one of the trustees of the loan. He is in charge of the K Street branch office of Commonwealth Land Title Insurance Co. and has previously acknowledged that he is a "good friend" of Antonelli.
Part of the loan money was reportedly used by Yeldell to pay off another loan of more than $10,000 from Madison National Bank, an institution in which Antonelli has a major financial interest.
Prosecutors are known to have questioned Sinclitico about how he happened to arrange the loan for Yeldell and whether ANtonelli influenced the lending decision in anyway.
Yeldell's attorneys declined yesterday to comment on any aspect of the investigation.
The former DHR director was suspended from his directorship last Dec. 3 following allegations of nepotism, cronyism and leasing irregularities in his department.
Seven city reports disclosed so far on DHR hiring practices have found no hard evidence of improprieties on Yeldell's part. A final report from the mayor's Office of Municipal Audit and Inspection is due next week. it will cover the 60 FLorida Ave. lease.
Yeldell's 120-day suspension as DHR director is scheduled to end April 2 - just days after the final report is to be released. The mayor has said he has found nothing in the seven reports so far that would prevent him from reinstating Yeldell as DHR director, the mayor does not plan to make a final decision until after the final report is received.