Immediately after the D.C. Department of Human Resources was granted independent powers to rent privately owned buildings, former DHR director Joseph P. Yeldell called in one of his key aides and told him to negotiate a lease with millionaire developer Dominic F. Antonelli Jr., the aide testified yesterday.
Virgil C. McDonald, assistant DHR director for administration, described his unexpected 1975 meeting with Antonelli in Yeldell's office as he recounted a series of steps taken by Yeldell to clear the way for the DHR lease of a building at 60 Florida Ave. NE from a partnership controlled by Antonelli. Yeldell's actions included choosing a real estate consultant and an appraiser to handle the deal, McDonald testified.
McDonald, who appeared as a prosecution witness in Yeldell's and Antonelli's bribery and conspiracy trial, portrayed the 1975 meeting with Antoneili as expected because only two months earlier. McDonald testified, Yeldell had instructed him to call off negotiations for the 60 Florida Ave. building. "As far as I knew, the issue was closed," McDonald said.
The prosecution contends that Yeldell had temporarily abandoned his plans for the Florida Avenue lease when he learned that the D.C. Department of General Services, which then handled DHR leasing arrangements, had decided not to negotiate the lease with Antonelli. When DHR later obtained its own leasing powers, the prosecution has charged, Yeldell overcame a series of obstacles to conclude what it has described as a highly porfitable, 20-year lease with Antonelli's partnership.
In return, Yeldell was given help by Antonelli in arranging a $21,500 loan from a bank in which Antonelli is a major stockholder and later received a separate $33,000 loan provided secretly by Antonelli himself, the prosecution has charged.
Yedell obtained independent leasing authority for his mammoth human resources agency on Dec. 19, 1975, by an order of Mayor Walter E. Washington, according to testimony in the U.S. District Court trial. On that same day, a Friday, McDonald was told to come to a meeting with Yeldell on the following Monday, McDonald testified. He said he did not know then what would be discussed at the Monday meeting.
McDonald said he went to Yeldell's office as scheduled on Dec. 22, 1975. Within what he described as "only a matter of minutes," McDonald testified a man whom he had never met before - and whom he had never met before - and who turned out to be Antonelli - arrived. "During the course of the meeting, Mr. Yeldell indicated to me that he'd like to go ahead with the lease for 60 Florida Ave.," McDonald said Yeldell then told Antonelli to submit his lease proposals to McDonald, the DHR aide told the jury.
Some time later, according to McDonald's testimony. Yeldell told him to employ two consultants to help work out the 60 Florida Ave. NE lease - Justin Hinders, a real estate consultant, and William S. Harps, an appraiser.
Yeldell's alleged decision to hire Hinders as a consultant because Hinders, the prosecutors contend, was selected and sent to Yeldell by Antonelli himself. The prosecution also has alleged that Harp's employment was arranged, although not initiated, by Antonelli's office.
McDonald testified that Yeldell's interest in the two-story Florida Avenue building dated back to the summer of 1975, when, he said, "Mr. Yeldell approached me and asked me to have a look at 60 Florida Ave." This is about the same time, other testimony has indicated, as Antonelli began his first efforts to buy the rundown Florida Avenue building from its previous owner, Peoples Drut Stores.
At one point, Assistant U.S. Attorney Richard L. Beizer asked McDonald whether Yeldell had ever told him of his personal financial relationship with Antonelli while discussion over the proposed Florida Avenue lease were underway. "No, he didn't," McDonald replied.
Judge Gerhard A. Gesell's willingness to allow Beizer to raise this issue appeared to be a pontentially significant victory for the prosecution. The prosecutor's attempt to demonstrate that Yeldell failed to disclose the existence of the loans he had obtained through Antonelli's help was part of an effort to prove one of the charges in the indictment - that Yeldell and Antonelli had maintained a corrupt financial relationship while "all the time concealing (it) from the people of the District of Columbia and its government departments, agencies, official and employes."
Judge Gesell had previously expressed uncertainty about how he would rule on this issue and had prevented one earlier witness from being asked about it. The judge said yesterday that he still had not decided what instructions he will eventually give the jury on this issue, which represents a central point in the single conspiracy count on which Yeldell and Antonelli have been indicted. The prosecutors and defense lawyers submitted opposing memorandums on what instructions they believe the judge should give the jury on the issue.
Under questioning by Yeldell's defense attorney, John A. Shorter Jr., McDonald acknowledge what the jury may view as one possible contradiction in his testimony about one conversation he said he had had with Yeldell. It was the only significant, apparently contradictory statement he admitted in nearly a full day on the witness stand.
McDonald insisted that he believed the conversation took place about Oct. 3, 1975 - a - day on which Yeldell was said to have been hospitalized. McDonald maintained, nevertheless, that he had never telephone Yeldell at the hospital. "I would not have disturbed him in the hospital," he said. The conversation whose date appeared to be in dispute was one in which McDonald quoted Yeldell as initially telling him to halt the Florida Avenue lease negotiations.
"Well, Virgil, I don't think we want to go ahead [with the proposed lease] - we don't have the funds," McDonald recalled Yeldell as telling him on Oct. 3, 1975.