Jim Graham, seen on the Metro board dais in 2010. (Mark Gail/The Washington Post)

A District government ethics board said there is “substantial evidence” that D.C. Council member Jim Graham (D-Ward 1) violated the code of conduct for city employees by intervening in a 2008 contract dispute. But the board said it could not formally sanction Graham because it had no authority to do so at the time the violations occurred.

The Board of Ethics and Government Accountability held that Graham “abandoned his impartiality and demonstrated inappropriate preferential treatment” in offering his support for a particular lottery contract bidder in return for the same bidder’s withdrawal from a real estate project. That offer, the board said, broke at least three provisions of the employee code of conduct.

Graham was motivated, the board said, to transfer the real estate project to a favored development firm that had given him campaign donations.

The board relied on the findings of an investigation performed by a law firm on behalf of Metro — on whose board of directors Graham served at the time of the alleged quid pro quo and on whose land the real estate project was located.

Under District law, the board could have launched a formal investigation of Graham, in which it would have undertaken a more intensive fact-finding process. But Chairman Robert J. Spagnoletti said Thursday that because the board had no ability to sanction Graham under laws in effect at the time of the violation, it would be an “unwise use of resources” to continue the probe,

William W. Taylor III, Graham’s attorney, criticized the board’s decision for drawing conclusions about his action and his motivations without giving Graham an opportunity to formally respond.

“We’re glad, of course, that the matter is concluded, but I think this an unfair and unjustified criticism and blot on his reputation that the proceeding ended in the way that it did.

The board, in its opinion, said Graham has been given numerous opportunities to explain his actions — in a deposition for the Metro investigation, in a letter to the ethics board and in Taylor’s arguments to the board last month.

Graham, in an interview, said he “categorically” denied acting to benefit the developer, LaKritz Adler, identified in the board’s opinion. He also criticized the board for drawing conclusions without undertaking its own investigation

“There’s no evidence to support it,” he said. “The board went way beyond the bounds of fairness. … If they want to investigate this, investigate it and then conclude.”