Mayor Marion Barry yesterday ordered an immediate review of all the city's contracts with all "Pride" organizations in the wake of allegations of theft and misappropriation of funds by a spinoff firm of the black, self-help group.
The mayor issued the directive, during a 45-minute meeting with three of his top advisers, to ensure that all the city's contracts with Pride are in proper order.
Barry, who helped found Youth Pride Inc. in 1967 and used it as a springboard into city politics, also issued his first statement yesterday on the allegations against three officials of a Pride real estate firm, P.I. Pproperites, including Mary Treadwell, Barry's former wife.
"As a cofounder of Pride, the mayor is quite naturally concerned about these serious allegations involving the organization," the two-sentence statement read. "It is his understanding that the matter is under grand jury investigation and he therefore feels it inappropriate for him to further comment at this time."
When reporters pressed the mayor for elaboration on the statement issued by his press office, he strolled silently into his office.
None of the allegations has implicated Barry in anyway, but the mayor met with three of his top aides to discuss how he should respond.
During the meeting with general assistant Ivanhoe Donaldson, press secretary Florence Tate and Herbert O. Reid, the mayor's legal counsel, Barry was urged to act quickly to establish some distance between himself and the allegations of theft involving the group he helped found.
Key Barry aides expressed concern that unless the mayor acted he could be hurt by the scandal because he was married to Treadwell during the time when many of the alleged thefts occurred.
"People just aren't going to believe that there was that kind of relationship for so long and no knowledge of what was going on," one said.
Another said, "Just by virtue of association there's negative fallout. People don't read everything carefully. All they have to see is it's his ex-wife and there's some money involved."
Barry has said previously that it was a matter of record that he and Treadwell always filed separate income tax returns. Barry and Treadwell separated in 1976 and were divorced in 1977.
In an interview with Post reporter last November, Barry said he had severed his ties with Pride "as best ad I can recall" in February 1978. Asked if he had ever been associated with P.I. Properties, the real estate spinoff of Pride that is the subject of the allegations, Barry replied, "Never have been."
He said in the interview that Treadwell told him in 1974 she was interested in buying the Clifton Terrace apartments and he responded by saying he "didn't want to participate" because he was planning to run for the City Council and "I wouldn't be there to help out."
"I said, 'This is a tough project.' I said, if you're going to take it on, more power to you. But it's tough. But mainly," Barry recaled telling Treadwell, "I wasn't going to be there."
Since being elected mayor, Barry has not initiated any new city contacts with Pride, aides said yesterday. Before he became mayor, however, Pride Enviromental Services, another spinoff, had been awarded an exclusive franchise to install trash cans on city streets and sell advertising on them.
Barry helped to found PES and served on its board until February 1978.
Pride also was one of more than a dozen organizations to which the city has given federal funds from the Comprehesive Employment and Training Act (CETA) to provide job training services for the hardcore unemployed.
These contracts were among those referred to by Barry yesterday when he asked aides to review all city links to the organization.
Meanwhile yesterday, federal grand jury subpoenas were issued by the U.S. attorney's office here for a wide range of documents identified in the Post articles.
The secret subpoenas order that the documents be turned over by next week to a grand jury sitting here, sources said.
At least two senior prosecutors in the fraud division of the U.S. attorney's office here have been tentatively assigned to the investigation, which will be coordinated by U.S. Attorney Carl S. Rauh and Assistant U.S. Attorney John T. Kotelly. The prosecutors handling the grand jury phase of the case will be Assistant U.S. Attorneys Raymond Banoun and William D. Pease.
Prosecutors working on the case yesterday reportedly asked auditors from the U.S. Department of Housing and Urban Development to speed up an audit into the companies' books and report as soon as possible on the result.
In addition, the Washington field office of the FBI reportedly has been asked to assign agents to the case in an attempt to locate and question several witnesses and gather additional documents.
The U.S. attorney's office opened its investigation into P.I. Properties after the first of the Post articles about the alleged theft fo $600,000 in U.S. and tenant funds.
Possible crimes being investigated include conspiracy to defraud the United States, mail fraud, false statements to HUD officials, and obstruction of justice.