Mayor Walter E. Washington yesterday temporarily reinstated Joseph P. Yeldell as director of the D.C. Department of Human Resources and announced that later this week Yeldell will leave DHR to become general assistant to the mayor with a "high priority" assignment.
Mayor Washington said in his opinion none of the published accusations against Yeldell involving nepotism and cronyism in DHR hiring, abuse of the agency's leasing and contracting authority or conflict of interest had been "substantiated."
"There has been no substantiation of the allegations," the mayor said, explaining why he had decided to bring Yeldell onto his own staff. Yeldell's initial assignment will be to develop a residential job corps center for unemployed and underemployed city youths.
"I think when I would move to bring him into my office and to say that this is a very major and important task to do that further substantiates the fact that I not only have a desire for him to continue (in city government) but also that I think he can perform an outstanding service."
Despite the apparent effort by the mayor to placate Yeldell in the terms and language of his amouncement, sources close to Yeldell said the DHR head and his lawyers were dissatisfied.
Yeldell had hoped for a longer period at DHR, the sources said, and expected his duties in the mayor's office to be outlined in greater detail. Yeldell and his lawyers were reported to be considering several possible responses to the mayor's offer, including rejection.
The major suspended his longtime political ally from the DHR post Dec. 3 and detailed Yeldell to the obscure post of chairman of the city's Board of Appeals and Review. The 120-day suspension formally ended yesterday, and the mayor had to decide to reinstate Yeldell, extend the suspension or begin personnel proceedings against him.
The major said he and Yeldell agreed that DHR, whose services daily touch one of every five city residents, could function best under different leadership because of the controversy tht has surround Yeldell personally. Sources close to Yeldell have said privately for some time that Yeldell did not want to return to DHR permanently, but merely wanted to make a symbolic return to the position to prove he had not done wrong.
Albert P. Russo who had become acting director of DHR during Yeldell's suspension, will resume the acting directorship when Yeldell moves to the mayor's office later this week, the mayor said.
Mayor Washington said yesterday Yeldell would have been moved directly to the general assistant position, but in order to satisfy civil service procedures Yeldell had to first be returned to the position from which he had been suspended.
The mayor's action does not end the controversy. The U.S. Attorney's Office here is investigating allegations of conflict of interest in the DHR director's dealings with developer and millionaire parking lot magnate Dominic F. Antonelli Jr.
In the past two weeks, several of the mayor's top aides - including City Aministrator Julian Dugas.Executive Secretary Martin Schaller and press secretary Sam Eastman - have been interviewed by prosecutors.
Yeldell, who has not appeared with the mayor at the half a dozen press conference on the subject since the allegations began Nov. 18, did not appear yesterday either. Yeldell's lawyers did attend, but would not comment on the mayor's announcement.
The latest controversy involving Yeldell began more than 130 days ago with allegations in the news media that Yeldell had improperly used his position to help relatives and friends as well as political allies of the mayor obtain jobs in city government. The news reports also raised questions about the hiring of Yeldell's wife Gladys as a programs analyst in D.C. personnel department, and reported allegations Yeldell had taken several official actions that appeared to result in financial benefits to Antonelli.
The allegations of nepotism, cronyism and mismanagement in DHR capped more than a year of similar accusations against Yeldell's stwewardship of the city's largest department.
The D.C. auditor, Office of Municipal Audit and Inspection and Dugas investigated the alleged hiring irregularities. In seven reports, they disclosed the department's personnel operations were sometimes chaotic and operationable, but no hard evidence of wrongdoing by Yeldell was reported.
An eight and final report on DHR leasing was released Saturday and recommended DHR be stripped of leasing authority and that the Corporation Counsel investigate a controversial 20-year, $5.6 million lease DHR signed with Antonelli to see if rental terms are more expensive than city law permit.
The mayor said yesterday he is still studying those recommendations, but their outcome would not affect return of Yeldell.
The final report also did not examine possible conflicts of interest between Yeldell and Antonelli. David Legge, director of the municipal audit office, said that aspect of the probe was "serious,' but Antonelli refused to appear before auditors.
DHR signed the $5.6 million lease on a vacant two-story building at 60 Florida Ave. NE which Antonelli had purchased shortly before for $800,000.At about the same time the lease was signed, Yeldell received a $33,000 personal loan from Lawrence A. Sinclitico, a friend of Antonelli's.
In addition, kegge disclosed Saturday, Antonelli recommended the consultant DHR hired to evaluate the lease. The consultant, Justin Hinders, told DHR Antonell's proposed price was fair and also urged DHR to sign for the longer lease Antonelli desired. Hinders told investigators he was "absolutely positive" Yeldell knew he was recommended by Antonelli.
Legge acknowledge Saturday the report was incomplete because the conflict-of-interest accusations could not be probed. But Mayor Washington said yesterday the findings available were sufficient information on which to make his decision.
"I have to make a decision on the basis of what I have before me," the mayor said. "The detail is up. I've had a very fine set of auditors backed up by the lawyers from the police department. They have done what I call an objective audit."
Corporation Counsel John R. Risher Jr. had withdrawn from the investigation following disclosure that as a private attorney he had represented Antonelli before becoming corporation counsel. In addition, some of the leases under investigation had been approved originally by the Corporation Counsel staff. The police department lawyers were the only other city attorneys available for the task.
Yeldell's new job, if he accepts it, will be a $47,000-a-year, GS-18 position, the same that he holds as DHR director. The mayor said Yeldell would answer directly to him and Dugas. Sources close to the mayor described Yeldell's post as a "trouble-shooter" job.
The Yeldell controversy has posed one of the most serious political crises for Mayor Washington since he became city's first elected mayor in 1975.
Throughout the course of it, Washington has been criticized for what was called his slow handling of the situation, and some political observers felt he was consistently outmaneuvered by Yeldell.
When the allegations first appeared, for example, the mayor tried to keep a low profile. But Yeldell defied a directive by the mayor and staged a noontime rally of more than 2,000 supporters - including DHR employees - to declare "Joe Yeldell aint' going nowhere."
The mayor then immediately placed Yeldell on indefinite leave. Yeldell was finally suspended when he threatened to return to work if the mayor did not bring formal charges against him. "This may involve many people in the District government," Yeldell said at the time. "I am prepared to let the chips fall where they may."