Millionaire developer Dominie F. Antonelli Jr. made his first efforts to purchase a Northeast Washington building only after the D.C. Department of Human Resources expressed interest in renting the building, a federal jury was told yesterday.
At the time, the Department of Human Resources was headed by Joseph P. Yeldell, who is on trial with Antonelli on bribery and conspirary charges. Other testimony in the trial has also shown that Antonelli had already met Yeldell and had given Yeldell personal assistance in obtaining a $21,500 loan from a bank in which Antonelli was a major stockholder.
K. Donald Menefee, who is now board chairman and president of Madison National Bank, testified yesterday morning that the bank bypassed some of its normal procedures in granting the loan to Yeldell and several associates in a now-defunct travel agency venture because of financial guarantees from Antonelli and Antonelli's long time business partner, John W. Lyon. Anotonelli is a Madison director and executive committee member.
Menefee, who was called as a prosecution witness, told the jury in U.S. District Court that the loan for Yeldell and his associates was approved by the bank's executive committee three days after Lyon applied for it in Yeldell's behalf in December 1973. Such normal procedures as requiring personal or corporate financial statements were waived. Menefee testified. When Yeldell later failed to make loan payments on time, Menefee testified the bank did not contact Yeldell himself, as would have instead dealt with Lyon and Anotonelli.
Antonelli's negotiations over the Northeast Washington building occurred nearly two years after the wealthy real estate developer had first guarranteed the loan for Yeldell, according to yesterday's testimony.
The description of Antonelli's intense, personal efforts to arrange a city government lease for a rundown, two-story office building at 60 Florida Ave, NE was provided by Wallace B. Agnew, a real estate broker who testified for the prosecution yesterday afternoon. The building, which was eventually leased to DHR from a partnership controlled by Antonelli, is central to the charges on which Antonelli and Yeldell have been indicted.
Agnew, who at the time was a senior vice president for commercial sales and leasing at Walker & Dunlop, Inc., testified that the first learned of DHR's interest in leasing the Florida Avenue building in the spring of 1975 and soon gave a group of DHR officials a tour of the buildings, on July 15, 1975. Afterward, the DHR officials expressed "very favorable comments" about the building, Agnew said.
Before this time, court testimony yesterday indicated. Antonelli had shown no interest in acquiring the 60 Florida Ave. building, which was then on sale from its previous owner, Peoples Drug Stores, Antonelli had negotiated to buy six other nearby tracts of land owned by Peoples but had excluded the 60 Flordia Ave. property from his purchase proposals.
Shortly after Antonelli learned from Agnew of DHR's interest in the building Agnew testified, Antonelli took a series of steps to try to arrange terms both to buy the property from People and to rent it to DHR.
Antonelli and his associates quickly drew up a contract proposal for purchasing the tract and then made at least two proposals for leasing the building to the city government. When the second draft of the proposed lease was prepared, Agnew testified, Antonelli himself accompanied Agnew to the District Building with it on Oct. 1, 1975.
All of those initial proposals were rejected for varying reasons, Agnew testified. Yesterday's court session ended before Agnew had completed his testimony and Agnew is expected to return to the witness stand this morning. Agnew was not asked yesterday whether Yeldell had been involved in any of Antonelli's initial efforts to arrange the Florida Avenue lease, and Agnew did not give any indication whether Yeldell had played a role.
The prosecution has charged, nevertheless, that Yeldell later went to considerable effort to overcome obstackles that temporarily prevented DHR from leasing the building from the Antonelli partnership that eventually bought it. Antonelli allegedly concluded the purchase of the building from Peoples and the lease of the building to DHR in early June of 1976.
In a grand jury indictment, Yeldell is accused of conspiring with Antonelli in the allegedly corrupt award of a 20-year, $5.6 million lease for the Florida Avenue building in exchange for Antonelli's guarantee of the $21,500 Madison National Bank loan as well as a later, separate $33,000 loan given secretly by Antonelli to Yeldell.
Defense lawyers have contended that no conspiracy existed between Antonelli and Yeldell and that the two men did not engage in any wrong-doing. The lawyers have argued that the Florida Avenue lease was fairly negotiated and highly advantageous to the city. They have asserted that Antonelli's financial assistance to yeldelli's financial assistance to Yeldell amounted to nothing more than honest efforts by one businessman to help another.
In one move apparently designed to shoe that the Madison loan did not amount to special favor for Yeldell, Antonelli's chief defense lawyer, Edward Bennett Williams, asked Madison president Menefee yesterday whether the loan to Yeldell had been "a highly profitable loan" for the bank."Yes, sir," Manefee replied.