D.C. Council member Harry Thomas Jr. is relinquishing control of the powerful Economic Development Committee while authorities investigate allegations that he used more than $300,000 in taxpayer money for his personal use.

Thomas (D-Ward 5) has vowed to fight the allegations. He initially resisted calls to step down from the committee post, but he made the request Wednesday in a letter submitted to D.C. Council Chairman Kwame R. Brown (D).

“I hold our institution in the highest regard,” Thomas wrote. “Therefore, any diminution of my personal prerogatives must be secondary to the Council and its perception among District residents.”

Brown said in a statement that the committee’s responsibilities would be temporarily transferred to the Committee of the Whole, controlled by Brown. It delays an unprecedented and difficult decision to potentially reshuffle council panels midterm.

Attorney General Irvin B. Nathan filed a civil suit against Thomas on Monday, alleging that he directed city funds to a nonprofit group that, in turn, sent $316,000 back to groups controlled by Thomas. He also stands accused of spending more than $80,000 in charitable donations on personal expenses. Thomas is alleged to have bought a $60,000 Audi SUV, use of a Nationals Park suite, golf outings and trips with the money.

Meanwhile, key council members are asking questions about the little-known group that handled the money alleged to have ended up under Thomas’s control.

The Children and Youth Investment Trust Corp. is a nonprofit organization created under Mayor Anthony A. Williams (D) in 1999. The CYITC was intended as an umbrella funder for community groups serving youth during “out of school time,” combining public money with private donations.

The D.C. Council sent $400,000 to the CYITC in 2007 to spend on “youth baseball programs.” That money was granted to the Langston 21st Century Foundation, also known as Langston 21, after a Thomas staffer indicated that he had “a clear direction for the funding,” according to Nathan’s lawsuit.

Langston 21, in turn, sent $316,000 of the grant back to two groups controlled by Thomas, the lawsuit alleges, and paperwork provided to the trust appeared to be prepared by Thomas’s staff. The documentation, which makes no mention of Thomas’s involvement, was bogus, the lawsuit alleges.

Council member Jim Graham (D-Ward 1), who chairs the Human Services Committee that oversees CYITC, said he wanted to know why the youth baseball spending wasn’t more closely scrutinized.

“There have been enough questions raised by the attorney general’s complaint for us to look at this,” Graham said. “We obviously are going to have to conduct oversight on what happened here.”

But others have raised questions about the influence some elected officials have wielded over the CYITC and its grantmaking process.

“There is pressure from the council to do what the council wants to do,” said Susie Cambria, a child advocate and public policy consultant. “The position that they’re put in is untenable.”

Although the trust has attracted some major private grants, it has always been heavily reliant on city money — and hence the politicians who control it. The board is entirely appointed by the city government.

About five years ago, D.C. Council members started “earmarking” funds for specific nonprofit groups in the annual budget. Often, the money would be sent through the CYITC.

In a high-profile example in 2008, council member Marion Barry (D-Ward 8) earmarked funds for several nonprofit groups he created and controlled. Two were given money via the CYITC, which required the groups to submit budgets, work plans and quarterly reports. The episode helped lead to an ongoing ban on council earmarks.

Ellen London, CYITC’s executive director, declined to comment, citing the ongoing investigations.

John W. Hill, who chaired the CYITC’s board from 1999 until 2008, said that the group had early qualms when it first started receiving earmarks.

“There clearly was not a nervousness but a concern when you had these kinds of earmarks,” he said, adding that some were outside the group’s stated mission. “We wanted to make sure that even though there were earmarks going through, they had operational requirements, and children were being served.”

Hill, who is chief executive of the Federal City Council, said he was unaware that Thomas had sought to direct the youth baseball grant and that it “would have been very unusual” for a council member to intervene in a grant-making process while he was on the board.

But elected officials have directly intervened with the trust on at least two occasions in recent years.

In 2009, the council sent $1 million to the CYITC for a “Ward 5 anti-crime youth violence initiative.” But the money was never competitively bid, London testified at a council hearing last year. Rather, Thomas met with CYITC staff and suggested groups that should have been funded.

Nathan said Monday that his office has not investigated those grants. Among the groups to which Thomas wanted to send money was Langston 21, although a CYITC source said that the group did not meet requirements and never got the anti-crime money.

More recently, Graham approached CYITC about using about $400,000 in gang-intervention funds sent to the group for “Green Teams” — workers that supplement city services by picking up trash, shoveling snow and removing graffiti.

The CYITC board rejected the request in February, saying it was too far outside the group’s mission. Graham defended his request and, more generally, the propriety of council members lobbying the group. “Of course, you should be able to weigh in if there’s a legitimate expenditure,” he said, adding that he readily accepted the board’s rejection regarding the Green Teams.

Graham said he was open to examining CYITC’s governance structure. “We all agree it should be independent,” he said.

But Hill said he doubted that the CYITC could be completely removed from political influence. “I don’t know how you do that unless it is a totally separate organization not subject to city funding,” he said. “A budget is a political process.”