Joseph P. Yeldell, a key aide and confidant to Mayor Waslter E. Washington, and Dominic F. Antonelli Jr., a millionaire parking lot and real estate magnate, were indicted yesterday on bribery and conspiracy charges in the allegedly corrupt awarding of a city lease.
The indictment by a federal grand jury here charged Yeldell benefited Antonelli financially when Yeldell's Department of Human Resources leased an Antonelli-owned building at 60 Florida Ave. NE for $5.6 million over 20 years. Antonelli bought the building for only $800,000, completing the purchase only after being informed that the city government lease had been approved, according to the indictment.
In, return for Yeldell's help with the lease, the indictment alleged, Yeldell received numerous gurantees by Antonelli on an outstanding loan he had at an Antonelli bank and ultimately received a $33,000 loan from Antonelli himself that was hidden through a "straw man" arrangement, teh indictment said.
The indictment further alleges that Yeldell took several unusual steps to help Antonelli with the lease, including his slipping Antonelli confidential city documents that Antonelli then used to help secure financing for the project.
According to the charges, Yeldell's government actions benefiting Antonelli were often taken only weeks - and sometimes days - after Yeldell had received help from Antonelli in connection with his continuing personal financial trouble.
The result, according to the indictment, was that the District of Columbia failed to have "the conscientious, loyal, faithful, disinterested and unibiased services, actions, and performance of official acts and duties by Joseph P. Yeldell. . ."
Yeldell has been a close political ally of Mayor Walter E. Washington since both were appointed to the city government in 1967 - Washington as mayor and Yeldell than as a City Council members. Since allegations of Yeldell's tangled financial ties with Antonelli sufaced more than a year ago, Yeldell has remained at key position in the city government and is now considered the third most important person in the Walter Washington administration behind Washington himself and city administrator Julian Dugas.
Washington, who testified before the grand jury that investigated the Yeldell-Antonelli case transfered the leasing authority to Yeldell that resulted in the 60 Florida Ave. NE arrangement, and ultimately signed the lease for the building. However, Washington was not found to be personally involved in the alleged criminal scheme nor is he mentioned by name in the 14-page indictment.
Yeldell emerged from a conference with aides around 8 p.m. to describe the charges as "groundless," and say he had asked Washington to place him on administrative leave. At about the same time in the District building, Washington was issuing a statement saying Yeldell has been placed on administrative "at my own initiative."
Antonelli, who has consistently refused to comment on his alleged involvement with Yeldell, proclaimed his innocence of the charges through his attorney yesterday afternoon. The attorney, Axel kleiboemer, said an honest and forthright defense will vindicate Mr. Antonelli and will show him to be a decent and productive member of his community."TThe indictment traces Yeldell's financial relationship with Antonelli back to 1973, when Yeldell was head of the Department of Human Resources. At the same time, Yeldell and six other persons were involved in a failing travel agency business called Entreprenuer Travel Association, Inc.
On Dec. 13, 1973 Antonelli endorsed a Madison National bank note for Yeldell and the six other promoters of the travel agency. Antonelli later guaranteed several other notes for them that varied in amount from $11,000 to $21,500, according to the indictment.
Antonelli is a founder, major stockholder and member of the loan comittee at the bank.
Details about the 60 Florida Ave. NE. lease and Antonelli's loan to Yeldell were first revealed in articles in The Washington Post in late 1976 and in 1977.
The Post has reported that Yeldell earlier ignored city policy and objections from other city officials in order to lease for DHR the Antonelli-owned building, which if off North Capitol Street in a warehouse district of town.
The indictment charges that Yeldell participated in 39 overt acts to further the year-long conspiracy that resulted in the awarding of the lease. According to the details of the indictment, other documents and interviews concerning the lease procedure, the following picture emerges:
On July 16, 1975, Yeldell told a staff member at DHR to inspect the building for possible use as a community service center. Two weeks later, Antonelli - who already had an option to but six other pieces of property across the street - "for the first time" offered to buy 60 Florida Avenue from People Drug Stores, Inc., which owned the building.
Nine days later, Antonelli made the first of several guarantees of Yeldell's ETA loan at Madison National Bank that are mentioned in the indictment. The same day Antonelli made the guarantee, Yeldell asked the city's Department of General Servoces - which then had authority over DHR leasing activities - to lease the building.
Over the next two months, Antonelli made lease proposals for the building. But, at the same, time Yeldell was being told that the city's General Services Department was prepared to lease the building from someone other than Antonelli. That offer, from a small contractor, Emanuel Logan, was less than the leasing agreement later made with Antonelli for the same space.
Both offers were sent to Yeldell, but about a week later DHR said it did not have the money to lease the building and was no longer interested in the site.
Later that month, Yeldell resurrected a previous request seeking autonomous leasing authority for his own agency. Meanwhile, Anotnelli proceeded with his planned purchase of property in the Florida Avenue area and again guaranteed Yeldell's ETA loan.
In one of the more critical time periods in the indictment, Mayor Washington - without following his usual procedure of soliciting views of city department heads - signed the DHR leasing authority on Dec. 19, 1975.
Three days later, Yeldell "directed a staff member to negotiate" with Antonelli for a lease on the building. The lease proposal by Antonelli was sent to DHR four days later, nearly two weeks before the city's Department of General Services director even knew DHR had been given the authority to negotiate such leases.
It was in February that Yeldell "caused to be delivered (to Antonelli) . . . a confidential DGS-prepared 'talking paper', which, based on a DGS appraisal of the value of the property" stated the D.C. government could legally pay $123,792 in rent for the property, the indictment said.
Antonelli used that document to seek financing on the building at the same time he was again guaranteeing Yeldell's travel agency loan.
Meanwhile, Antonelli arranged a meeting between Yeldell and a real estate consultant - not named in the indictment, but identified elsewhere as Justin Hinders - to discuss the possibility of hiring the consultant as a lease negotiator for DHR. The Post has learned that Hinders was once an officer of a land development firm in which Antonelli had a financial interest.
Hinders has said, according to a city leasing report issued a year ago, that Antonelli called him in February 1976 and asked him if he was interested in being DHR's consultant. An appointment was arranged with Yeldell that same afternoon, and Hinders has said he is "absolutely positive" Yeldell knew he had been recommended for the position by Antonelli.
Hinders ultimately recommended a 20-year lease with Antonelli on the building, rather than a 10-year lease option that had been previously discussed.
Yeldell asked a real estate appraiser to appraise the property for DHR in mid-February, and directed a staff member to prepare a contract for the appraiser. At the same time, Antonelli asked the same appraiser to inform him when he had finished appraising the property.
There was little further visible activity, according to the indictment until March 25 - the day when Antonelli asked an employe of Commonwealth Land Title Insurance Co. to conduct a title search on Yeldell's home at 1729 St. NW a step normally taken before a loan is made.
The new real estate appraisal for 60 Florida Ave. NE came into DHR within the next week, and provided a basis for a higher rent payment than previously authorized on the same building. Antonelli then submitted a new lease proposal based on the new appraisal.
Then, the following acts reportedly occurred:
April 26, Yeldell forwarded to the corporation counsel the proposed Antonelli lease.
April 25-29, Yeldell telephoned an assistant corporation counsel to request "urgent action" on the lease.
May 13, Antonelli again guaranteed the Yeldell-ETA loan.
May 17 - Yeldell informed Antonelli the lease would be accepted by the District government.
May 15-20 - Antonelli instructed an employe of Commonwealth Title - identified elsewhere as Lawrence A. Sinclitico, a friend of Antonelli who handles much of Antonelli's land title searches - to draw up a note in the name of a nonexistent "straw man" relating to a $33,000 payment to Yeldell.
May 20 - Antonelli wrote a $33,000 check to a Commonwealth employe, "the proceeds of which were to be applied to pay off the financial obligations of the defendant, Joseph P. Yeldell."
May 24 - Yeldell signed a deed of trust on his home and a $33,000 note that Antonelli the next day "caused to be delivered" to a Commonwealth employe.
Antonelli then signed a lease to be delivered to DHR for the property and the final arrangements were made for the purchase of 60 Flordia Ave. NE and adjoining property for $800,000. Antonelli than told DHR that he had purchased the property, and according to the indictment, the final act of the alleged conspiracy took place:
"On or about June 9, 1976, the defendant Joseph P. Yeldell sent to the mayor of the District of Columbia foring to the indictment the final act of ecuted by the defendant Dominic F. Antonelli Jr., for the building at 60 Florida Ave. NE."
Yeldell, in his only public interview on the subject, acknowledged to The Washington Post last spring that he had a long-standing financial relationship with Antonelli. But he denied that it constituted a conflict of interest or that he had ever used his public position improperly because of it.
"This is what disturbs me about these news reports," Yeldell said at the time. "I don't ever get into negotiations in this department, I never negotiated Antonelli's lease or anybody else's lease. It's all done outside this office and there are many reviews of actions taken here."
In that interview with the Post, Yeldell said he had twice sought Antonelli's help in arranging two loans totaling $54,500 - the original travel agency loan plus the later $33,000 loan from Antonelli. Yeldell said it was only because he thought Antonelli was so helpful with the first loan that he contacted him for the second loan.
Yeldell said then that he did not know - and has never asked - whether Antonelli might actually have been the real source of $33,000. "I guess what he (Antonelli) did was look around to see if he knew anyone with any ideas," Yeldell said about Antonelli's help with that last loan.
One of the questions raised about the loan was whether it was unusually beneficial to Yeldell in terms of interest rates and extending his obligations. It was an 8 per cent annual rate loan over a 15-year period, at a time when other lenders were charging 10 to 12 percent interest rates for such loans, financial sources have said.
"I don't know if it (the loan's terms) was that great or not, but it made sense to me and it gave me the opportunity to meet my obligations," Yeldell said.
The investigation that led to the indictment, conducted for more than a year by a federal grand jury under the direction of Assistant U.S. Attorney Richard Beizer of the fraud division and FBI special agent Phillip L. Buvia, reportedly uncovered numerous examples of Yeldell's financial problems and the questionable manner in which he sought loans from numerous sources.
Beizer said he could not comment on the investigation except to say that the probe of the 60 Florida Ave. NE transaction was completed with the filing of the indictment.
The indictment charges both Antonelli and Yeldell in one count of conspiracy to defraud the citizens of the District, and each in separate additional bribery counts. Antonelli is charged with paying the bribe to Yeldell in the form of the loan and Yeldell is charged with receiving the bribe.
Yeldell's five-year tenure as director of the Department of Human Resources was often alleged management problems in the city's largest agency. After The Post articles about 60 Florida Ave. and reports of negotism and cronyism that were published in The Washington Star, Mayor Washington transferred Yeldell to the opscure board of appeals and review.
Yeldell has since been made a special assistant to the mayor and is considered to be a key adviser to Washington on political strategy and a wide range of city matters.
Besides the Florida Avenue building lease, The Post has disclosed other examples of what appears to be a mutually beneficial relationship that involved Yeldell's power as a public official and Antonelli's connections as a millionaire developer and parking executive.
During the period from 1973 to 1976, Yeldell as DHR director:
Urged that the city sign the controversial lease on 60 Florida Ave.
Continually smoothed the way for construction of a downtown replacement facility for Doctors Hospital. At the time Antonelli was a stockholder and a member of the board of directors for the hospital's parent corporation.
Approved a shift in the site for a new Doctors Hospital to property owned by Antonelli. Yeldell, on three different occasion, ignored the advice of his health planning advisers that he disapprove the hospital's attempt to build a new facility. On the day he approved the hospital site shift, Yeldell and Antonelli met together with others to discuss the matter. The meeting took place about a week after Yeldell had obtained his $33,000 loan from Antonelli.
Yeldell and Mayor Washington were not the only city officials to involve themselves in events leading to the leasing of 60 Florida Ave., according to one other city official.
When the proposal was pending with the city's Department of General Serivces, city administrator Julian Dugas called the director of that agency, Sam Starobin, and urged him to expedite the leasing agreement.
Dugas, according to Starobin, told him it was "politically important" that the city lease the property. Dugas has denied ever taking any action on behalf of the building lease.
The controversy over the Florida Avenue building lease arrangement drew criticism about the city's leasing procedures from Capitol Hill. Congress ultimately put restrictions on the city's ability to negotiate long term leases, and shortly afterwards the mayor withdrew DHR's autonomous leasing authority and restored it to DGS.