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D.C. Council member Jack Evans received stock just before pushing legislation that would benefit company

D.C. Council member Jack Evans (D-Ward 2) in May 2017. (Jahi Chikwendiu/The Washington Post)

A consulting firm owned by D.C. Council member Jack Evans received 200,000 shares of stock in a digital sign company just before Evans promoted legislation that would have benefited the company by allowing it to operate in the District, emails and other documents show.

Evans (D-Ward 2) created his firm, NSE Consulting, in 2016, just as the sign company, Digi Outdoor Media, was trying to enter the D.C. market.

Shares in Digi were issued to NSE Consulting on Oct. 28, 2016, according to the stock certificate, which was obtained by The Washington Post. A month later, Evans asked the council chairman to place emergency legislation on the next agenda that would have allowed Digi to install its signs.

Evans would later pull the bill when it became clear it did not have the votes to pass.

Asked about the stock on Thursday, Evans sent a text message saying, “The stock certificate was returned to Digi as soon as it was received.” He declined to answer additional questions by text or in person outside his office.

The stock in the privately held company was worth perhaps $100,000, based on transactions made by other shareholders in the previous year.

Since February, Evans has answered questions several times from The Post about his relationship with Digi and its founder, Donald E. MacCord. But he did not respond to a list of written queries sent Dec. 10 about his interactions with MacCord.

Several of those interactions involved the transfer of money. About 11 weeks before Digi issued the stock certificate to NSE, Evans’s firm received two $25,000 checks from MacCord. When The Post asked Evans about the checks in April, he produced a letter dated Aug. 25, 2016, from him to MacCord indicating that he had returned the money. He said at the time that the money was a retainer for future consulting work.

The letter to MacCord said Evans had learned the company was “engaged in a potential dispute” with the District about the construction of its signs and that “it is in both of our best interests for me to delay the initiation of a business relationship with your company while this potential conflict exists.”

But the conflict was not resolved in October — in fact, it was heating up — when Evans received an email on his personal AOL account from MacCord’s Digi email account. The subject line was “NSE Share Issuance.”

“Jack, I hope you are having a wonderful bithday and a great week,” the email said. “Attached are the share issuances we discussed. I owe you a great birthday dinner. Let me know when we can get together.”

Through an attorney, Brian West, MacCord declined to answer questions. MacCord faces federal charges in California in an unrelated case alleging he defrauded investors.

The D.C. Board of Ethics and Government Accountability opened an investigation into Evans’s interactions with the sign company in January, according to two city officials familiar with the matter.

In recent months, the board suspended its inquiry. Board officials declined to give a reason, but in other cases they have stepped aside in deference to law enforcement investigations.

Interviews, emails and other documents obtained by The Post show MacCord tried to win over Evans through political fundraising and payments to his new firm.

And they show that the lawmaker took actions that would benefit the entrepreneur.

Evans and MacCord

Evans, 65, who was elected in 1991 and is now the longest-serving D.C. Council member, first met MacCord nearly two decades ago. MacCord, 51, was born in Washington, dropped out of college and launched himself into business, according to 2016 testimony he gave in a civil case against him. He began buying and selling Land Cruisers before moving to antifreeze recycling and then outdoor advertising — signs on bus shelters, benches, rooftops and billboards.

By 2001, MacCord had joined a venture that planned to erect giant fabric signs on the sides of District buildings. MacCord learned then that navigating past community opposition to signs is one cost of doing business, he would testify 15 years later.

“If you do not have the ability to work within the political spectrum in D.C., you’re pretty much going to fail,” he testified.

MacCord’s business and a couple of others got more than 30 of the wall signs approved by District officials before neighborhood activists stirred opposition.

MacCord got help from consultant David Abramson, who had been an adviser to Evans during his failed 1998 mayoral bid. Abramson “guided me to work within the city government to actually rewrite the zoning code” to create a new category of “special signs,” MacCord testified.

Evans introduced legislation in 2001 to allow those giant, fabric “special signs,” persuading the council to pass a bill that enabled MacCord’s venture, according to a 2001 Post report.

In about 2005, MacCord sold his stake in the venture for millions of dollars, he testified.

Years later, MacCord founded Digi Outdoor Media, his plan for a bigger venture. He wanted to install large digital signs across the District, relying on an ambiguity in the city’s regulations that he said he thought allowed them.

Beginning in 2013, MacCord led an effort to raise millions for the venture. In a filing with the Securities and Exchange Commission, his company said it believed “success will depend heavily upon our ability to quickly develop and build out our digital signage network and to secure long-term lease agreements for our signs at prime locations before our competitors can do so.”

The company claimed it had “expended approximately $3,500,000 on pre-construction of numerous digital sign sites.”

But according to a complaint in an ongoing SEC case, MacCord used much of the investors’ money for personal expenses, such as a London vacation, apparel from Italian clothiers, payments on a $177,000 Land Rover for his wife, and a $20,000-per-month rented mansion in Southern California.

Those allegations were not yet public, and MacCord forged ahead with his plan.

Constituent fund

“I would like to come in and bring you up to date on our project,” MacCord wrote to Evans and one of his aides in a January 2015 email.

The aide responded that Evans could not meet but asked MacCord to update a staffer. Those emails and the relationship between Evans and MacCord were first reported and detailed by Jeffrey Anderson of the District Dig website.

MacCord persisted, writing that he wanted one of his key investment partners to “meet Jack as he will be very important part of our project going forward.”

Many of the sites where MacCord planned signs were in Evans’s downtown ward. By February 2015, MacCord’s persistence with the lawmaker had paid off.

“Jack, Thank you for your time today,” MacCord emailed Evans. “We look forward to contributing and working with you going forward and well into the future. Also let me know if I can help with any issues that come up.”

On his iPhone, Evans typed a reply, emails show. He was raising money for his constituent services fund — meant to promote the “general welfare” and used by other council members to help constituents with unpaid electric bills or similar emergencies. Evans often used his to buy tickets to sporting events, according to disclosure filings.

“We have raised $25,000 so far,” Evans wrote. “We can raise up to $40,000. You can give a maximum of $500 per person or entity. Thanks.”

MacCord replied that he would get right on it, adding, “Have a great weekend my friend and when you have some free time let’s grab dinner and talk about old time[s].”

A few months later, MacCord, a business partner and 10 other people and entities connected to them contributed $6,000, according to required disclosure reports filed by Evans.

By late 2015, executives at competing sign companies, including a Georgetown-based company, Capital Outdoor, heard about MacCord’s business plan and moved to head him off. The competitors learned that instead of seeking sign permits, MacCord would rely on an ambiguity in the District’s sign regulations, according to minutes of D.C. Construction Codes Coordinating Board meetings at which representatives for the competitors spoke.

The rules exempted signs “within a building” from needing a sign permit. MacCord’s company would later argue in court filings that a sign was “within a building” if installed within a “building area,” such as outdoors under an overhang — even if its intended audience was outside.

Representatives for Capital Outdoor persuaded then-council member Vincent B. Orange (D-A Large) to create emergency legislation that would clarify the ambiguity in a way that thwarted MacCord’s venture. Evans was aware of the effort, lobbying records and emails show.

Orange withdrew the legislation just before it came up for council discussion. It is not clear why, and Orange said he does not remember. But records show District lawyers had raised issues of whether the bill would pass legal muster.

In January 2016, MacCord sent an email to Evans and his chief of staff. “We have finally completed our sign order and our financing is in place and our guys want to come in on Wednesday and say thank you,” MacCord wrote.

D.C. Council member proposed bill that would have helped company that offered a job to his son

Three months later, MacCord offered a summer job to Evans’s son.

“Let’s catch up in the near future,” MacCord wrote in an email to Evans in March 2016, “and Jack remember we would love to have your son as an intern this year with Digi.”

Evans emailed MacCord that his son, who was then a 19-year-old college student, “is interested in the summer intern job.” The lawmaker’s staff arranged a meeting between MacCord and the younger Evans, emails show. Later, a Digi Outdoor Media executive emailed an offer letter to the son, but he did not end up working for Digi.

“His interest was in art; Don’s company does ads,” Evans told The Post this year. “My son had no interest in doing that.”

An alleged signage 'blitz'

Even as the SEC subpoenaed documents from MacCord’s company, he brought on more investors. An Australian firm agreed to raise $19 million. In a memorandum, the firm said MacCord’s company had been negotiating with the D.C. Council and engaging consultants to make sure permits were issued smoothly, according to a May 2016 article in the Australian Financial Review.

During the first half of 2016, MacCord’s company embarked on what the D.C. attorney general’s office would later call in a court filing “a blitz of illegal construction.” Relying on the ambiguity in District sign regulations, MacCord’s company did not get exterior sign permits. It got permits only for brackets to hold the signs and for electrical work to power them.

District officials, meanwhile, had been working to remove the ambiguity. City Administrator Rashad M. Young issued an emergency rule in early July 2016 clarifying the permit exemption. A week later, the District revoked Digi’s permits for brackets and electrical work.

That month, Evans created a company called NSE Consulting, registered at his home in Georgetown. He got help from William Jarvis, a lawyer and lobbyist.

Jarvis, who was initially the registered agent for Evans’s company, would soon lobby Evans on behalf of the Washington Nationals baseball team as it pushed for legislation allowing digital billboards in and around Nationals Park. In an interview, Jarvis said he has nothing to do with NSE and merely helped Evans with the paperwork because they are friends.

Nats get the go-ahead for digital billboards

Three weeks later, MacCord’s company wrote two $25,000 checks to NSE, according to city officials with knowledge of the payment.

That month, MacCord also helped Evans gather contributions for a Hillary Clinton campaign fundraiser on Nantucket at a home owned by fellow Georgetown resident Elizabeth Bagley, emails show. Evans collected checks for $2,700 each from MacCord and several associates.

MacCord’s company continued installing signs, despite the District’s objections. When MacCord needed overnight access to a closed Metro station entrance in one of the buildings, an Evans staffer emailed the transit authority for help, according to the email.

In April, when The Post asked Evans about the checks he received from MacCord, the lawmaker said the payments were “a retainer for six months or a year or whatever it was.”

Asked what he had planned to do for MacCord, Evans said:, “We never got to that stage — I’ll be honest with you. It was kind of like consult with them about — they are a national — they did work in cities on advertising. So it was basically to consult with them about what they were doing.”

Evans, a lawyer, said his work would have focused solely on Digi’s ventures outside the District.

Digi did not have significant business outside the Washington area, records show. The company saw its venture in and around the District as a “first step,” after which it hoped to expand to other markets, according to an SEC filing. It never did.

Evans said, inaccurately, that “this was early on, if you remember, before they were involved in the District of Columbia.”

Asked whether there was a specific event that prompted him to return the checks, Evans said, “It was just an ongoing thought process that I was having.”

Digi lobbyists make push

Late in August 2016, a week after Evans says he returned the checks, D.C. Attorney General Karl A. Racine (D) filed suit, alleging MacCord’s company was installing prohibited signs “despite having no sign permits to do so and in clear violation of the District’s subsequent orders to stop.”

D.C. sues company, alleges LED signs pose a danger

As MacCord’s company fought the lawsuit in court, his lobbyists began drafting emergency legislation that would make the signs legal. Within a few weeks, one of them contacted Evans, according to a required disclosure report.

In early October 2016, MacCord and his associates contributed an additional $4,000 to Evans’s constituent services fund, according to required disclosures.

On Halloween 2016, MacCord sent an email to Evans’s personal account with a copy of a stock certificate attached and a FedEx tracking number. The email was among the exhibits attached to a sworn deposition related to civil proceedings in California involving MacCord’s divorce.

Three weeks after the stock transfer, one of Evans’s staffers, Ruth Werner, met with lobbyists for MacCord. Afterward, one of the lobbyists, Thorn Pozen, emailed her a copy of the bill they wanted passed.

“We’re also working on a more comprehensive package of background materials for use in talking to other members and staff,” Pozen wrote.

The legislation would have closed what some had called a loophole that MacCord’s plan relied on — clarifying what “within a building” meant. But it also would have grandfathered signs if they had already received permits for brackets and electrical work, as MacCord’s signs had.

The bill not only would have allowed MacCord’s signs and torpedoed the District’s lawsuit against his company; it would have headed off any competitors who tried to follow.

Pozen and Werner did not respond late Thursday to requests for comment.

'Do you have the votes?'

A few days after Werner met with MacCord’s lobbyists, she asked them for talking points for use by Evans, emails show. She also asked the lobbyists to get in touch with a contact in the district attorney’s office. “He is telling me the AG and the Mayor are adamantly opposed to this,” she wrote.

On Dec. 1, 2016, Evans sent a memo to D.C. Council Chairman Phil Mendelson (D), asking that the emergency legislation be placed on the following week’s agenda. “It is critical that legislation be enacted as quickly as possible to clarify the regulations regarding commercial signs,” Evans wrote.

The next Monday, the day before the meeting, Werner received confirmation from the city’s budget director and general counsel that the proposed legislation was in order, and she quickly informed MacCord’s lobbyists.

That afternoon, Werner emailed Pozen, “Do you have the votes?”

Pozen replied, “I’m told seven are firm and the remainders are being worked on now.” Because it was emergency legislation, it needed nine votes to pass the 13-member council.

Evans tried to persuade colleagues, including Charles Allen (D-Ward 6). “I did make clear to Jack that I was not going to be supporting it,” Allen said in an interview.

Mendelson also remembers Evans approaching him but said he, too, declined to support the measure.

During the next day’s council meeting, when the item came up, Evans asked that it not be considered.

“We pulled it,” said David Wilmot, an attorney for Digi and longtime friend of Evans. “You don’t put something up that you can’t get passed.”

Evans has argued that his office took no action on the legislation.

“Nothing happened. There was no legislation proposed, even though that’s the word you guys keep using,” he said in the interview in April. “There was nothing withdrawn, because there was nothing introduced.”

Wilmot said he had no knowledge of the checks or stock transfer to Evans, nor of an intention by MacCord to hire the council member to do legal consulting work.

A month after Evans withdrew the proposal, he refunded $2,000 in contributions from entities related to MacCord that had given to his constituent services fund, according to reports Evans filed with the District’s Office of Campaign Finance. It is not clear why.

Fraud case

A year passed before the securities-fraud allegations against MacCord became public, in November 2017. An indictment against him from federal prosecutors in California shows the pressure he faced as he tried to get the signs permitted.

His business model “required that local governments, including the government of Washington, D.C., either actively approve or, at the very least, not prevent or interfere with the installation of the signs,” the indictment says.

The federal case against MacCord is pending, as is the District’s lawsuit against the sign venture, which is being defended by investors who say they no longer have business ties to MacCord.

Evans’s firm, NSE Consulting, is still in existence. In a required 2017 financial disclosure, he reported income of between $101,000 and $250,000 from the firm. Evans declines to disclose his clients.

Peter Jamison, Carol D. Leonnig, Fenit Nirappil and Noah Smith contributed to this report.