TODAY IS APRIL 6, 2011 — DAY 91 OF THE GRAY ADMINISTRATION

PREVIOUSLY — Theater, music, art shows to be subject to sales tax under Gray proposalAudit: Kwame Brown’s 2008 campaign sent funds to brother’s company

Early reports of D.C. Council Chairman Kwame R. Brown’s vindication appear to have been somewhat exaggerated. The Office of Campaign Finance audit released yesterday, far from clearing Brown, revealed that his 2008 re-election campaign “failed to account for more than a quarter-million dollars in donations and expenses, and used a now-defunct political consulting firm to pass $239,000 to a firm operated by his brother,” Tim Craig reports in the Post. “In a blistering critique of his bookkeeping, the audit cited widespread irregularities and discrepancies in how Brown (D) raised and spent money to win a second term as an at-large council member.” Brown’s comments have sought to emphasize that all the money is accounted for, that there is “no missing money,” but that’s not exactly true: About $240,000 of the $825,000 he raised made it into the account of his brother Che Brown’s company, Partners in Learning. How that money was spent remains less than clear. For instance: About $169,000 went to “day labor,” without an itemized accounting of what exactly that was. Adding to the questions: The money went to Partners in Learning via a pass-through, Banner Consulting, in an apparent effort to shield the fact that Brown was doing business with his brother’s company. Also troubling: “Despite a District law barring campaigns from using cash for purchases of $50 or more, the audit found that Brown’s committee issued eight checks totaling $31,590.70 that were made out to cash.” OCF is expected to level serious fines in the coming weeks; more after the jump.

AFTER THE JUMP — More potshots at the Gray budget — how death affects taxes — Wal-Mart protesters make point via ping-pong — Fenty says he’ll make at-large endorsement — Norton tells GOP on House floor that its needle-exchange ban has “killed men, women and children in the District of Columbia”

*** MAIN COURSE ***

FOLLOW THE MONEY — “Che Brown declined to comment on why his firm’s money was routed through Banner. But he said he used it to pay for Kwame Brown’s aggressive field and get-out-the vote efforts. ‘You name it, with my father, it’s the guts of what Kwame does on the campaign,’ said Che Brown, referring to Marshall Brown, a longtime D.C. political strategist. ‘I am pleased with the work that we did. I am pleased with the tireless work of the campaign.’ In an interview, Banner’s [Charles Hawkins] said he and Che Brown decided to set up companies to do work for Kwame Brown’s 2008 reelection campaign because they ‘worked well together’ during the council member’s 2004 race. ... When asked why Kwame Brown didn’t report the payments to Che Brown’s firm, Hawkins said, ‘Primary contractors use subcontractors all the time.’ ... Kwame Brown, who noted that he’s been cooperating fully with auditors, said Banner partnered with his brother’s firm because it needed more expertise in running a top-notch get-out-the-vote effort. ‘It wasn’t trying to be hidden,’ Brown said. ‘We initially went with Banner ... but in terms of what we were trying to accomplish field-wise, they couldn’t make it happen, and they decided to subcontract.’ According to the audit, Hawkins and Che Brown signed their partnership agreement June 1, 2007, more than a year before Brown’s reelection. ... Kwame Brown said he takes ‘full responsibility’ for the problems associated with his campaign, adding that he will rely on a ‘professional firm’ to handle his bookkeeping, instead of volunteers, from now on. ‘We now know, when you get to a certain level, you can’t have a volunteer doing it,’ Brown said.”

MORE ON KWAME — Freeman Klopott notes in Examiner: “Brown had no opponents in the 2008 Democratic primary and won the general election by a wide margin. His campaign raised and spent $825,000, although it only reported about $612,000 of those expenditures, the audit found. In 2010, Councilman Phil Mendelson spent less than $300,000 on his contested campaign for an at-large seat, Mendelson’s most recent finance report shows.” He also raises questions about whether OCF’s finding will be accompanied by real penalties. More from WaTimes, Loose Lips (”Council Chairman Kwame ‘Fully Loaded’ Brown is in a world of hurt”), WTTG-TV (”We’re excited that this audit is finally over...”), WUSA-TV (”We wanted to make sure [voters] didn’t forget about the at-large race...”), WAMU-FM. Also: Check out the Partners in Learning Web site!

LOOK WHO’S CALLING FOR FURTHER INVESTIGATION — “Council member Jim Graham (D-Ward 1) said the chairman needs to quickly produce an ‘itemized report’ for what Che Brown spent the campaign funds on. ‘If he can’t provide one, then people are going to have to reach their own conclusions about what happened, and an investigation would be a subsequent step,’ Graham said.”

GRAY’S BUDGET ‘AUDACIOUS’? — Jonetta Rose Barras takes a whack at Mayor Vincent Gray’s budget proposal in her Examiner column, writing that Gray has “sidestepped many hard decisions.” Jonetta continues: “Instead of reducing the size and ultimate cost of government, Gray has put it on an obesity plan. For example, he has added new offices — D.C. Open Government and two deputy mayors — that will cost more than $8 million in 2012; the price tag increases in subsequent years. In fact, costs in nearly every major category are expected to increase from 2013 to 2015, according to the budget.” Unmentioned: $8 million represents 0.14 percent of the $5.6 billion in local spending Gray proposes. And local costs are going up because federal support is down. Jonetta is on more solid ground in accusing Gray of using “gimmicks and a slew of onerous revenue enhancements” to close the budget gap, alighting on the $46 million one-time hit gotten by changing the way workers’ income taxes are withheld. She quotes Jack Evans comparing it to the infamous “fifth quarter,” when Mayor Sharon Pratt booked five quarters of revenue to cover four quarters of expenses in the fiscal 1993. Here’s the burn: “Oddly, Gray’s 2012 budget mimics in many ways those submitted by former Mayor Adrian M. Fenty. As council chairman, Gray railed against those plans. Now, he has proved he’s equally adept at nickel-and-diming residents.”

DEATH AND TAXES — Fab item from WBJ’s Michael Neibauer on how the city’s bottom line might well depend on how many rich people die this year: “The estate tax may be the budget’s saving grace. But there’s no way to know. The CFO’s revenue estimate for the estate tax is $35 million in fiscal 2011, with the same amount slated for 2012 and 2013. But whether it hits the mark, falls short or soars past is wholly dependent on who dies. It’s a morbid thought, sure, but the deaths of the District’s wealthiest residents can mean a windfall for city coffers — especially in a bull market. In February, the District benefited from a single $8 million estate tax payment, bringing the annual collections to $29 million, a mere $6 million shy of the estimate with seven months still to go in the fiscal year. The tax collection for fiscal 2011 is up 135 percent over fiscal 2010, though that may be a result of last winter’s devastating snow storms, which caused major processing delays. ... How ironic would it be if one uberwealthy D.C. resident dies this year, and resulting estate tax payment negated the need for an income tax hike on the uberwealthy? We won’t know until it happens.”

COUNCIL PING-PONG — Yesterday’s D.C. Council legislative meeting was most notable for a brief protest from anti-Wal-Mart activists. Writes Tom Howell Jr. at The Washington Times: “Walking straight up to the dais while the Council was in session, they presented [Muriel Bowser] with a bag of pale yellow ping-pong balls with ‘frowny faces,’ a tongue-in-cheek play on the Wal-Mart logo, to voice their opposition to a plan that would bring the box store to a site at Georgia and Missouri avenues in Northwest. The sudden disruption caused several council members to ask them to stop, while a few ping-pong balls bounced along the Council chamber floor.” This led Harry Thomas Jr. to propose more ropes for the council chamber. Says DCist: “I’m not sure what’s more ridiculous: the fact that Thomas infers that Wilson Building security is so inept that they wouldn’t be able to catch someone who was carrying harmful materials into the building, or his assertion that ropes would somehow erect a force field which would prevent someone from throwing said materials at Councilmembers.” In other news: Kenneth Ellerbe was unanimously confirmed as fire chief a day after clashing with David Catania over pensions (primarily his own).

FENTY AT GU — Fenty paid a visit to Georgetown University Tuesday night for a student lecture. The Georgetown Dish has a report: “Fenty likened his commitment to education reform and willingness to ‘risk it all’ to President Lyndon Johnson’s pushing through civil rights legislation after his 1964 landslide. Johnson knew that ‘if he didn’t get it done [now], maybe it would not get done”’ even though LBJ knew it would make him unpopular in the next election. ... In the Q&A, Fenty reiterated his position that school systems should ‘get rid of unions completely [and it] needs to happen now’ because parents can’t wait the extra time and there are enough protections and accountability through the voters and their elected officials. However, ‘absolutely’ he would learn from his mistakes and ‘do a better job’ of talking to all sides. ... In other responses, Fenty declined (for the moment) to make an endorsement in the at-large council race, said it was ‘too early’ to pass judgment on his successor and revealed that he is for term limits for mayor but not for councilmembers because it’s important to keep their ‘institutional knowledge.’” For more recap I direct you to the Twitter feed of Jake Sticka, GU student and ANC commissioner: “Fenty’s #four26DC endorsement coming in the next few days. “Check the newspapers soon”; “Fenty: I don’t believe in unions in schools at all”; “Fenty: I agree with [Scott Walker] in many ways but don’t think getting rid of collective bargaining completely was wise.”

AT-LARGE ROUNDUP — Biggest news: That Fenty said he plans to make an endorsement. Josh Lopez? Sekou Biddle? Patrick Mara? Himself as write-in? Other than that: Writing at DCist, Martin Austermuhle notes that a bunch of at-large D.C. Council candidates support a two-term limit. “The statements came in response to a question from a member of the audience, who asked whether the recent scandals in D.C. government hint that elected officials should be term-limited. District residents overwhelmingly voted in favor of term limits for councilmembers in 1994, only to have the option undone by the D.C. Council in 2001.” Those in favor: Bryan Weaver, Alan Page, Dorothy Douglas, Mara, Lopez and Biddle. Note that Vincent Orange and Arkan Haile did not attend the forum and thus went unpolled on the issue. In other news: The Board of Elections and Ethics has published an online voter guide for the April 26 special election, complete with those charming personal statements I so adore. Such as this one from Orange: “The past few months have been difficult for us. ...” And this one from Biddle: “Sekou Biddle was born and raised in Columbia Heights. He hasn’t spent his time hanging around the DC government making political deals. Sekou knows leaders must be as honest, competent and hard working as District residents.” Also: BOEE says the election will go on, federal shutdown or not, and it is in search of attorneys to serve as election monitors.

ON THE WARPATH — Eleanor Holmes Norton took to the House floor yesterday to browbeat Republicans over their willingness to restrict the city’s ability to fund needle exchange program. The Hill’s floor blog has a rundown: “]Norton] said the U.S. Congress has ‘killed’ Washington DC residents over the past several years by not allowing them to pay for their own needle exchange programs, and inferred racist motives to Republican efforts to impose their policy aims on the District. ‘We have the highest AIDS rate in the United States only because the Congress of the United States has killed — I used these words advisedly — killed men, women and children in the District of Columbia by keeping the District for ten years from using needle exchange so that AIDS would spread throughout the city,’ she said on the House floor. ... She added that DC has higher AIDS rates than other major U.S. cities ‘because of the wishes of the Congress of the United States, which is responsive to nobody in the District of Columbia.’”

*** SMALL PLATES ***

In wake of cocaine case, Kwame Brown moves to keep non-residents out of DCPS (WaTimes)

More from Gray on how a federal shutdown would hit the District (WTOP, TBD)

Why that Bloomberg story on Ward 8 unemployment was apples-and-oranges baloney (DCFPI)

What’s up with the schools budget? Who knows. (D.C. Schools Insider)

Also: OSSE aims to cap tuition for special-ed placements (D.C. Schools Insider)

Still more on the FEMS vs. DCFD battle (NBCWashington.com, City Desk)

Expand fleet share. Duh. (GGW)

DOH didn’t make copies of documents seized by the FBI in Cornell Jones case. Maybe that’s because they were seized? (WaTimes)

You better believe this midnight liquor sales things ain’t too popular (Life in the Village)

More on Catania pension bill (WAMU-FM)

Nalle ES in need of rehab (D.C. Schools Insider)

How to move beyond the filling of downtown? (The Bellows)

Orange raises money in Georgetown (G’town Dish)

New gym, pool in the cards for Cardozo? (Housing Complex)

Coffee scofflaw moves to California but not away from his tax debt (All We Can Eat)

Are D.C. cops meeting with prosecutors less often? (City Desk)

Are local politicians ignoring the “cheating scandal”? (The Washington Teacher)

*** ON THE MENU ***

Gray, Allen Lew, Eric Goulet appear before council for budget hearing, 10 a.m. in JAWB 500 — Gray holds weekly news conference, 2 p.m. in JAWB press room; does WHUR-FM interview, 7 p.m. — Kwame Brown hosts community forum on Kaya Henderson confirmation, 6 p.m. in Stuart-Hobson MS auditorium, 410 E St. NE.