Warner B. Jenkins, one of the D.C. officials who grant building permits for the city's booming construction and home renovation industry, three times lowered permit fees after receiving personal payments from the applicants, according to canceled checks, documents and interviews with those who said they paid him.
In addition, the D.C. government could be losing several million dollars a year in fees because of a lax system in which construction costs -- the basis for the fees -- have been routinely underestimated, according to records and interviews.
The permit fee paid to the city is the equivalent of a tax -- $38 for each estimated $1,000 of work.
In one of the three alleged incidents of improper payments, Helmut Hawkins, a federal government employe, said in a series of interviews that last Dec. 9, Jenkins lowered the estimated value of his proposed renovation on his house in Mount Pleasant from about $14,000 to $2,000. That lowered the permit fee from about $500 to $76. Hawkins said he wrote a check to the D.C. treasurer for $76.
At the same time, Hawkins said, Jenkins asked him to make out a second check for $75 and leave the payee space blank. Hawkins did. When that canceled check was returned, Hawkins said, the payee had been filled in as "W.B. Jenkins." The check had been endorsed by a signature of that name and deposited, Hawkins said.
Two reporters showed Jenkins a copy of the check during an interview yesterday in his office at 614 H St. NW. "No question, that's my signature," he said. Later, he said, "It looks like my signature."
Jenkins denied any wrongdoing. He said there was no connection between the check and the permit application. The check was probably for interior design work, which he does, he said, in addition to his $24,527-a-year job for the city. Hawkins said no such work was done or discussed.
The most recent alleged incident occurred March 25. Tony Ruggerio, a construction employe for McDonald's Corp., said Jenkins lowered the value of proposed renovations on a restaurant downtown from $45,000 to $25,000. Jenkins then asked him to make out a check for $950, the amount of the fee, but to make the check payable to Jenkins, Ruggerio said.
The check, drawn on Ruggerio's personal account, bounced, Ruggerio said. Ruggerio subsequently wrote a second check for that amount, payable to the city treasurer and obtained a bona fide permit. Jenkins later complained that he received no money himself, according to Ruggerio.
In the third alleged incident, Brian Fitzpatrick went to obtain a permit for renovation of his Capitol Hill row house in November 1980. Fitzpatrick estimated the value of the work at $30,000. Jenkins lowered the estimate to $3,000, reducing the fee by more than $1,000.
Fitzpatrick said that he wrote one check to the D.C. treasurer for the fees and another check for $250. He made the second check payable to himself, Fitzpatrick said, endorsed it and then gave it to Jenkins. Fitzpatrick said that Jenkins' name appears on the back of the canceled check. But Fitzpatrick declined to show the canceled check to reporters.
In another alleged instance in November 1979, Jorge Flores, a suburban Maryland contractor, said Jenkins offered to reduce the estimate for a $40,000 renovation job to $14,000, lowering the fee due the city from $1,520 to less than $600. Flores said Jenkins wanted $150 for himself.
Flores declined to make the payment, submitted a new application with a lowered estimate and received a permit for the lower fee from another official in Jenkins' office without making any personal payment, Flores said.
On Tuesday, FBI agents here began an investigation of the alleged incidents after Hawkins, following several interviews with reporters, informed the U.S. attorney's office of his payment.
A review of city records and dozens of interviews with building permit applicants revealed numerous times when estimated costs were lowered, resulting in lower fees paid to the city. The applicants said they made no personal payments to Jenkins or other officials to obtain the reduction.
Several architects, builders and contractors interviewed said the city's system is so loose in its review procedures that projects are routinely undervalued and the cash-strapped city government is deprived of revenues. City officials estimate that $1.6 million will be collected from such fees this year. Many of those familiar with the system said the sum could be much greater.
Architect Ben Baker said, "There is no question that the city treasury is being gouged."
Some architects interviewed said they routinely undervalue their projects -- at times by as much as 90 percent - and find their applications approved with no request for justification of the estimates. At other times, city examiners lower the estimates on projects that were already undervalued by the applicants, the architects said.
"They're way underestimated . . . People lie, and to tell you the truth, there's no way of knowing," said architect Peter E. Ellenbogen of OKE, Inc, of Silver Spring.
"The thing is, the checks and balances aren't there. It just needs to be better organized," Ellenbogen said.
The total value of renovation work done in the city last year was $46 million dollars, according to figures compiled by the U.S. Department of Commerce and based on permits supplied by city officials.
All construction in the District -- from a basement renovation in a home to a condominium conversion project to a new high-rise office building -- must be approved by a variety of city officials before it can begin.
Jenkins is one of four structural engineers for the Building and Zoning Regulation Administration of the D.C. Department of Housing and Community Development that gives final approval to all construction plans after they have been reviewed by other city inspectors -- including plumbing, mechanical, zoning and electrical examiners. The engineers also set the permit fee.
"We are the last sign-off section before they go down and get permits," Jenkins said in the interview yesterday.
He said few of the projects were approved at underestimated values. "If it's too low, I'll raise it," he said. "All I have to do is look at the plans and look at the cost," to know the accurate value.
Jenkins said he did not believe the architects' assertions that numerous underestimated projects are approved. "It might get by now and then. But it is something that hardly happens," Jenkins said.
Jenkins said applicants often include in their estimates parts of the job not covered by the permit regulations -- plumbing, electrical and mechanical work.
When he sees that, Jenkins said, he reduces the cost estimates. That explains many of the instances in which applications on file have original values crossed out and replaced with lower, Jenkins said.
Architects, builders, contractors, homeowners and city officials all have different interpretations of what should be included in the estimates. There is no written city policy.
Jenkins, for example, said mechanical work such as heating and ventilation ducts should not be included in the estimate. He also said that costs of labor should not be included if the homeowner does the work himself.
However, James E. Dickson, who is in charge of the division where Jenkins works, said, those costs should be included.
It was in this uncertain system that Jenkins, a 47-year-old GS-11 hired in August 1978, allegedly accepted improper payments on three occasions.
Hawkins said he went to the permit branch on Dec. 9 of last year to get approval for converting the unfinished basement in his Northwest Washington home into a rental apartment.
He planned to do much of the work himself in his spare time, he said, and had never obtained a permit before. He found the process confusing, inefficient and frustrating, he said.
Hawkins said he had taken a day off from work and spent hours there shuffling from office to office. "By the time I got to Jenkins, I was in shambles and desperate to get out of there," he said.
On the application, Hawkins had estimated the work would cost about $14,000. He said Jenkins punched the figures into a calculator and looked up and said, "Are you ready? This is going to cost over $500 [in fees]."
Hawkins, like other homeowners interviewed, said he had no idea of the fee structure. "That's a rip-off," Hawkins said he protested.
He said Jenkins asked him if he wanted to save some money. When Hawkins said he did, Jenkins told him to write out two checks, Hawkins said. Jenkins then wrote two amounts on an appointment pad, ripped out the sheet and handed it to Hawkins.
Hawkins wrote out the checks -- one for $75 and the other for $76, both with the payee space left blank -- and tried to give both checks to Jenkins. But Jenkins took only the one for $75 and told Hawkins to take the other one to the cashier's window, Hawkins said.
Ruggerio recalled that he first went to the permit branch on March 25 to get approval for the new second-floor eating area to be built at the McDonald's restaurant at 521 13th St. NW.
Ruggerio said that when his application reached Jenkins' desk, he told the engineer that he was surprised at the fees. Jenkins offered to reduce the proposed cost from $45,000 to $25,000, which would result in a fee of $950 instead of $1,710.
Jenkins wrote his name on a piece of paper, Ruggerio said, and turned it around for Ruggerio to see. "Make out a check in his name and I'll get you a permit," Ruggerio recalled Jenkins saying. Ruggerio said he gave Jenkins a check for $950 in Jenkins' name drawn on Ruggerio's personal account. [he expected to be reimbursed later, he said.] Jenkins gave him a permit, he said.
When he returned to his office, Ruggerio asked his supervisors whether they had ever made a check out to an individual instead of the D.C. treasurer when applying for a permit in the District. They told him they had not.
Ruggerio called his bank to stop payment on the check, he said. Bank officials told him that an attempt had been made to cash the check, but there were insufficient funds on hand.
Later, Ruggerio's superiors demanded a carbon receipt normally affixed to permits. Jenkins gave him one, according to Ruggerio. The receipt did not bear the usual cash register stamp indicating receipt by the D.C. treasurer.
Ruggerio said he then told Jenkins he was going to make out a new check for $950, this time to the D.C. treasurer."He said, 'Now I don't have anything,' or words to the effect or 'what about me?'" Ruggerio recalled in a recent interview. "I said, 'Don't worry, I'll take care of you.'"
However, Ruggerior said he never gave Jenkins any more checks, instead depositing the new check with the cashier.
Now Ruggerio has two permits for the same renovation job.
Flores, a contractor from Beltsville, said it was November 1979 when he went to get a permit for a $40,000 renovation job and Jenkins offered to reduce the fee from $1,520 to about $500 or $600. Jenkins wanted an additional $150 for himself, Flores said.
"I told him I didn't know if I could do that and that I would have to check with my supervisor," said Flores, who is self-employed and has no supervisor.
Flores said that he later submitted a new application with a reduced estimate to another examiner and obtained his permit.
Jenkins said yesterday he could not remember any interaction with Ruggerio, Flores, Hawkins or Fitzpatrick, but if he had accepted checks, it was for interior design work not connected with the permit applications.
"The only thing I can say is that the checks I got from most of them were just for work done or going to be done," he said. CAPTION: Picture 1, WARNER B. JENKINS . . . allegedly got personal payments; Picture 2, Helmut Hawkins' building permit application showing a change in the estimated cost of work and Hawkins' check made out to W.B. Jenkins.; Picture 3, Cost of work on Brian Fitzpatrick application shows change from $30,000 to $3,000.