A sweeping federal investigation of political corruption in the District has entered a new and fast-paced phase targeting suspected violators of city campaign finance laws, authorities said.
The guilty plea of former D.C. Council member Michael A. Brown to bribery charges Monday was the latest public development in a broader investigation that has now spanned two years and that prosecutors said will move quickly in the coming weeks.
Brown’s plea not only laid bare a $55,000 bribery scheme; it also detailed a connection to the alleged financier of a secret, $653,000 effort to back the mayoral campaign of Vincent C. Gray (D) in 2010. Brown said that he accepted an illegal donation from the same contributor, giving investigators new ammunition in a case that has dogged Gray since he took office.
People close to the case also confirmed for the first time that authorities are talking to at least one other D.C. Council member over campaign finance issues. Vincent B. Orange (D-At Large) on Tuesday acknowledged that he had recently met with federal prosecutors about his past campaigns, which had ties to the same people implicated in the Gray “shadow campaign” — expenditures on behalf of the candidate that went unreported to campaign finance authorities.
Orange said he is cooperating and has provided documents requested by the prosecutors, but he declined to discuss details from the meetings, citing prosecutors’ request for discretion.
“Certainly the U.S. attorney is doing their due diligence,” he said.
The common thread between Brown, Gray and Orange are businessman Jeffrey E. Thompson and public relations consultant Jeanne Clarke Harris. Plea deals signed by Brown and Harris describe a tag-team effort by Thompson and Harris to subvert city campaign finance laws, which limit donations from individuals and businesses.
Prosecutors have not accused Gray of having direct knowledge of the illegal scheme. And although people close to the case describe Thompson as a prominent target in the investigation, he has not been charged. Thompson, once the owner of accounting and health-care firms that did billions of dollars in business with the city, is the subject of a grand-jury investigation, according to a recently unsealed court document.
According to plea agreements signed by Harris and Brown, Thompson provided hundreds of thousands of dollars in secret funds that were funneled through companies owned by Harris to benefit candidates Thompson did not want to support publicly. Thompson has not been identified in those documents, but several people close to the investigation said he is the person referred to as “Co-conspirator.”
Neither Orange nor his campaign aides have been named in court pleadings. He is connected to Thompson and Harris most directly through the financing of his 2011 campaign, which returned him to the D.C. Council after a hiatus of more than four years. During that campaign, Orange accepted 30 money orders and three cashier’s checks, worth a combined $26,000, from contributors tied to Thompson or Harris. As much as $75,000 more from sources connected to Thompson came in the form of conventional checks.
Orange noted that the materials requested by prosecutors are similar to the ones he provided to the D.C. Office of Campaign Finance after the money-order allegations were first reported last year by several Washington news outlets, including The Washington Post. An audit by that office found minor discrepancies but did not sanction the Orange campaign.
“I think they’ll come to the same conclusion the Office of Campaign Finance did,” Orange said of federal prosecutors.
Several workers on Orange’s campaigns have also been interviewed recently, according to people familiar with the probe. Joseph F. Johnson Jr., who was chairman of Orange’s three most recent campaigns, said he has not been contacted by federal investigators and was not aware of anyone else who has. “That doesn’t mean that they will not,” he said.
Two people familiar with the matter said prosecutors have also issued subpoenas seeking campaign finance records from members of the Choi family who own properties in the Northeast wholesale market area and who have been frequent contributors to Orange’s campaigns.
A. Scott Bolden, a lawyer representing the Chois, confirmed the subpoenas but declined to discuss what they sought.
Orange was admonished by a city ethics board last month after intervening in December when health inspectors attempted to close a business in the market for a rat infestation. Orange, who was found to have “knowingly used the prestige of his office for the private gain of that business,” agreed to attend ethics training to settle the matter.
Thompson has not commented on the shadow-campaign investigation since the probe became public in March 2012, when federal agents searched his home and offices. His attorney, Brendan V. Sullivan Jr., has repeatedly cited a policy of not commenting on pending client matters.
Monday’s plea deal for Brown places new scrutiny on Thompson, several people close to the case said.
Brown admitted in court papers made public Monday to knowingly taking an illegal $20,000 donation that Thompson and Harris secretly funneled to his failed 2007 campaign for the Ward 4 council seat.
Though investigators made the 2007 donation scheme public Monday, Brown was not charged in connection with that conduct. The one-term at-large council member is cooperating with investigators, and his sentencing for the bribery conviction has been pushed back to the fall as he continues to do so.
Brown’s attorney, Brian M. Heberlig, said the former council member “will continue to cooperate with the government’s investigation as he has so far.”
Former federal prosecutors and people close to the case said including information in court documents absent a charge is designed in part to give a judge the entire scope of a defendant’s conduct. But it can also be done to lock in potential future testimony from a cooperating defendant or to send a message to others implicated in the scheme.
Brown’s cooperation may help the government establish a pattern of how Thompson allegedly operated and show the breadth of his alleged scheme, according to several people close to the case who requested anonymity because of the ongoing investigation.
While Brown would not be the star witness in any case against Thompson, they said, his testimony could help corroborate Harris’s description of the scheme.
Legal observers say prosecutors have been especially methodical in building their case against Thompson in part because Sullivan, his attorney, is known as a tenacious litigator who generally refuses to negotiate with prosecutors and instead opts to take his cases to indictment or even trial.
Prosecutors have spent much of the past year fighting with Thompson and his attorneys over the government’s right to review documents seized in the March 2012 raids. A March 2013 federal appeals court ruling said investigators could begin reviewing the documents, but the matter could still be appealed to the Supreme Court.
The newly disclosed Brown donation scheme contains elements common to the 2010 Gray campaign allegations.
Thompson, until recently a major city contractor, did not want his name attached to Brown contributions, because his business activities required him to “publicly support different candidates based on contemporaneous political dynamics,” according to the plea deal signed by Brown.
Harris, during her July plea hearing, similarly said that Thompson sought to shield his identity as a Gray donor to avoid angering incumbent Adrian M. Fenty.
“He did not want the sitting mayor to find out he was supporting his opponent,” Harris said in court. “If somehow the sitting mayor won, he would be in some serious contractual problems.”
Brown’s plea deal describes how Thompson and Harris made secret payments for the benefit of political candidates. While the Gray campaign benefited from the shadow campaign and straw donations, Brown also received money directly, through secret wire payments.
Brown admitted taking that money and depositing it in his campaign account, reporting it to authorities as a personal contribution. There are no legal limits on the amount candidates can contribute to their own campaigns.
What is also novel about the Brown prosecution is that it represents the first time prosecutors have alleged that Thompson directly interacted with a political candidate to arrange the illicit donations.
Court documents spell out that Brown — the son of former U.S. commerce secretary and Democratic National Committee chairman Ronald H. Brown, who died in 1996 — knew Thompson through “family connections and mutual friends.”
Brown described in his plea deal that, in a meeting at Thompson’s office in the spring of 2007, the two men discussed how Thompson would not publicly contribute to Brown’s campaign. Brown would later sign an agreement with Harris describing the $20,000 payment, sent from Thompson through a company owned by Harris, as a loan. In his plea deal, Brown acknowledged that the agreement with Harris was a “pretext intended to provide a legitimate, albeit misleading basis” for the payments.
Robert S. Bennett, who is representing Gray in the ongoing investigation, said Tuesday he believed there is “no message” contained in the Brown plea to the mayor or Thompson.
U.S. Attorney Ronald C. Machen Jr. on Monday declined to address the state of his office’s investigation into Thompson or the Gray campaign. But he said that an absence of outward activity did not mean the probe has stalled, and he said the investigation would continue to move swiftly.
“All of these investigations are extremely fast in pace,” he said. “Even the investigations you’re talking about with the mayor, they’re still moving very, very quickly.”
Nikita Stewart and Jennifer Jenkins contributed to this report.