D.C. mayoral aide Joseph P. Yeldell lied to investigators from the municipal auditor's office last year when he denied that millionaire developer Dominic F. Antonelli Jr. had helped him obtain loans from a bank in which Antonelli is a major stockholder, according to court evidence yesterday.
Yeldell, former director of the city Department of Human Resources, also apparently lied to the auditors by claiming that he had not told Antonelli about DHR's newly authorized leasing powers at a time when Antonelli was negotiating for a DHR lease, the evidence presented by federal prosecutors in U.S. District Court shows.
In the final hours before the prosecution rested its case in Yeldell's and Antonelli's bribery and conspiracy trial yesterday, the jury listened in a hushed courtroom for about 25 minutes to parts of an often-muffled tape recording of an interview in which Yeldell had been questioned by investigators for the city government's municipal auditor's office about his links with Antonelli and DHR's leasing practices.
In the tape-recorded interview conducted March 4, 1977. Yeldell made a number of statements that appeared to have been contradicted by previous court testimony and by two additional witnesses who appeared later in the afternoon. The dramatic playing of the tape recording and the final witnesses marked the conclusion of seven days in which federal prosecutors have produced 30 witnesses to testify about Yeldell's allegedly corrupt relationship with Antonelli.
The municipal auditor's investigation had taken place at a time when Mayor Walter E. Washington's government was engulfed in a deepening controversy that eventually led to Yeldell's and Antonelli's indictments. The controversy was prompted, in part by disclosures by The Washington Post about Yeldell's efforts to arrange a DHR lease for Antonelli.
Parts of the municipal auditor's findings were never made public, however, and Mayor Washington later pointed to a series of reports issued by the audit office as a basis for reinstating Yeldell as DHR director. The mayor said the audit reports disclosed no evidence that would prevent Yeldell's return to public office.
Municipal audit director David Legge had said at the time that his investigators had been unable to determine whether Yeldell's actions constituted a conflict of interest. Yeldell, who had been suspended by the mayor for 120 days, was briefly reinstated as DHR chief and then named to a new job as a top mayoral aide. He is now on unpaid leave from this post.
Yeldell and Antonelli, a parking and real estate executive, have been charged with conspiring to arrange a lucrative, 20-year DHR lease for a two-story office building at 60 Florida Ave. NE from a partnership controlled by Antonelli. In exchange for the $5.6 million lease, Antonelli is alleged to have secretly given Yeldell a $33,000 loan after helping him obtain a series of other loans from Madison National Bank, in which Antonelli is a major stock holder and director.
The investigators from the municipal audit office, a division of the city's Office of Budget and Management Systems, questioned Yeldell about many facets of these allegations but, according to the tape recording played for the jury yesterday and other evidence during the trial, Yeldell failed to divulge key aspects of his links with Antonelli and some of his actions as DHR chief.
The prosecution played the tape recording for the jury in an apparent attempt to demonstrate that Yeldell had concealed his leasing efforts and personal financial ties with Antonelli from D.C. government officials - a central allegation in the single conspiracy count on which both men have indicated.
During one part of the tape-recorded interview, an audit investigator asked Yeldell, "Since you became director of DHR, did you obtain any loans from the Madison National Bank?"
Yeldell responded, "Yeah, I personally obtained a loan for $4,000 from Madison National Bank, a personal signature loan."
Then the investigator asked, "Was Mr. Antonelli involved in any manner with this loan?"
"He was not," Yeldell replied.
Previous testimony by bank officials and other witnesses in the trial has shown, however, that Yeldell not only received the $4,000 loan that he mentioned to the audit investigators, but that he and his business associates in a now-defunct travel firm had previously obtained a succession of short-term Madison loans of up to $21,500, all of which had been personally guaranteed by Antonelli and arranged with Antonelli's help.
In addition, testimony in the trial has indicated, Yeldell received the $4,000 loan that he cited in response to the auditor's question only after Antonelli had mentioned it to two key Madison officials. An FBI laboratory report found that what appeared to be Antonelli's initials had been written on Yeldell's application for the $4,000 loan by a bank official and then blocked out with a black, felt-tipped pen.
Another part of the audit investigator's interview dealt with a proposed lease for the 60 Florida Ave. NE building that was submitted by Antonelli on Dec. 26, 1975, shortly after DHR had obtained independent powers to lease privately owned buildings. Yeldell was asked whether he had told Antonelli about DHR's new leasing authority before DHR received Antonelli's Dec. 26, 1975 proposal.
"No, I didn't notify Mr. Antonelli of anything," Yeldell replied.
Nevertheless, one of Yeldell's key DHR aides, Virgil C. McDonald, the agency's assistant director for administration, has previously testified that he was called to Yeldell's office on Dec. 22, 1975, for a meeting with Yeldell and Antonelli at which Yeldell initiated negotiations over Antonelli's proposals for leasing the 60 Florida Ave. NE building from DHR.