FBI agents are attempting to determine whether documents showing who approved a $24,990 contract to a sting company set up by the FBI were stolen from contract files at the D.C. Department of Human Services after the FBI's undercover operation was unveiled, sources said yesterday.
Authorities also are trying to determine whether Michael Davis, a former midranking agency employe and friend of D.C. businessman John B. Clyburn and former top city official David E. Rivers, acted as an intermediary in directing agency business to specific firms, sources said.
Federal authorities questioned at least 10 agency officials this week about the missing documents and numerous other alleged contract irregularities at the agency during Rivers' tenure as director and after he became secretary of the District of Columbia in December.
The interviews suggest that prosecutors are attempting to prove that Rivers was able to use his influence with Human Services officials to manipulate the contracting process -- while he headed the agency and later after he had left the agency.
Rivers yesterday declined to comment on the investigation. His attorney, John F. Mercer, said, "The government is fishing and fishing and doing more fishing. There's no substance. They can talk to friends, to coworkers, they can even talk to honest enemies, they just aren't going to find any fish."
Repeated attempts to reach Davis, who resigned in May from his post as special assistant to Dr. Reed V. Tuckson, the agency's public health commissioner, were unsuccessful.
B&C Management Consultants Inc., a firm set up last year by an undercover FBI agent with Warren E. Barge Jr., an unwitting Detroit area businessman, won two contracts from the Human Services agency to conduct energy audits. The first contract, with a subcontract to a firm headed by Clyburn, was awarded for $24,990 in October while Rivers still headed the agency. The second, for $108,000, was awarded in March while Byron Marshall served as the agency's acting director.
Agency officials -- following U.S. Attorney Joseph E. diGenova's disclosure of the undercover probe on Friday, May 22 -- have been unable to locate original documents showing the agency's approval process for the first contract. The city received a subpoena for the B&C contracts on May 22, along with numerous other subpoenas.
During the weekend after diGenova's announcement, Marshall and Frank Dollison, a former agency official who served as contract administrator for the B&C contracts, visited the agency's offices and obtained the B&C contract files, according to a source.
Marshall did not return phone calls to his office yesterday. Dollison has declined to comment on the investigation. Numerous other agency officials also had access to the contract files, sources said.
In interviews this week, FBI agents told agency officials that a critical contracting document is missing and asked whether it was stolen from the agency's files. The document -- the original copy of a so-called 62 form -- would show who in the agency's top ranks first requested the contract, according to sources. On a copy obtained by the FBI, the signatures of top officials are missing.
Some contracting officials told FBI agents that they are certain they saw a 62 form with all the signatures, before processing the contract, but they do not know what happened to the document subsequently, sources said.
Grady C. Williams, a top contracting officer at the agency, has said Dollison told him Rivers requested the award of B&C's second contract in March, though Rivers had no authority over the agency at the time. Dollison resigned as the agency's director of facilities in May.
In their interviews, FBI agents questioned contracting officials about why both B&C contracts were awarded without the required signature of an official from the agency's controller's office. Sources have said the second B&C contract also was awarded without the approval of the agency's contract review committee, which is supposed to approve all contracts over $25,000 awarded without competitive bidding.
FBI agents asked agency officials to identify other instances in which contract procedures allegedly were subverted and any agency officials who may have been involved.
In questioning officials about Michael Davis, authorities have attempted to determine whether he exercised improper influence within the agency as a result of his friendship with Rivers, sources said. They also asked officials to describe what role Davis played in contract awards and how he was hired, sources said.
Health commissioner Tuckson, Davis' supervisor, said yesterday that Davis would not have had direct responsiblity for contracts, though he may have tried legitimately to obtain general information about contracts in order to determine how programs associated with them were progressing.
In one instance, however, Davis may have tried to intervene in an award for a purchase order, according to an agency official. W. Gary Nelson, who heads the agency's procurement branch, said yesterday Davis repeatedly urged him to process a contract to a firm called Glo-Walk, which specialized in providing temporary clerical services.
The firm obtained a purchase order for $7,560 in October -- later increased by $6,000 -- to provide clerical services for the mental health division. Tuckson said Davis would not have had any responsibility for contracts in that division at that time.
Agency officials say they believe Rivers initially hired Davis at Clyburn's request. Davis has described himself to acquaintances as a friend of Clyburn's.
In a search warrant issued for Clyburn's offices on May 22, FBI agents said they were searching for documents related to Davis, among numerous other individuals.
The search warrant also asked for documents related to Gloria Walker, who heads Glo-Walk, and Miriam Holman, a former employe in the DHS procurement branch who sources identified as a friend of Clyburn's. After she resigned from the agency, Holman was employed by Glo-Walk, according to sources.
FBI agents asked contracting officials about at least two other contracts besides those to B&C: a contract to Pitts Motor Hotel to house homeless families that has been repeatedly criticized as costly, and a contract awarded to JMC Associates Inc. to treat the mentally ill.
The JMC contract, intended to provide a less expensive alternative to St. Elizabeths Hospital, wound up last year costing nearly three times as much as the hospital would have.
Sources said one agency official told the FBI this week that DHS contracting officers voiced objections to the cost of the contract during contract negotiations. But the sources said Gladys Baxley, who then headed the agency's mental health division, overruled the objections after discussing the contract with Rivers.
Baxley could not be reached for comment yesterday. She has previously declined to comment on the investigation. FBI agents, in their May search of Clyburn's offices, looked for any records relating to Baxley.
Though FBI agents focused this week on DHS contracts, investigators also are looking into a Department of Corrections contract to Sylvan Learning Corp. that was awarded after representatives of the firm approached Rivers. Sylvan is an Alabama-based education "The government is fishing and fishing . . . they just aren't going to find any fish."
company specializing in tutoring programs.
A source said that intermediaries introduced Sylvan representatives to Rivers last year, when the company was attempting to obtain District contracts. The source said Rivers spoke to representatives of the company, then referred them to Hallem H. Williams Jr., who was then a top aide to City Administrator Thomas M. Downs and is now director of corrections.
Sources said Sylvan representatives later met with Clyburn and successfully submitted a proposal for a $399,000 prison education contract to the Corrections Department. Decision Information Systems Corp., a firm then headed by Clyburn, was to serve as a subcontractor, sources said.
One source said Sylvan also intended to use Data Processing Institute, another firm controlled by Clyburn, as a second subcontractor.
Corrections officials have declined to comment on the contract, which was awarded in May under competitive bidding procedures but has since been canceled. Sylvan officials have declined to comment.