Investigators hired by the D.C. Council concluded that Evans and his staff took official actions to benefit the company against a “backdrop of benefits and intermittent financial entanglements,” according to a 97-page report of their findings.
New details in the report include a finding that two months after Evans acknowledged that his private relationship with Digi posed a potential conflict of interest — prompting him to return a $50,000 retainer fee, he said — the lawmaker inquired about receiving stock in the company.
In an emailed response, the company’s founder, Donald E. MacCord, reassured Evans that the stock was coming and arranged for Digi to issue 200,000 shares of stock to Evans’s consulting firm, says the investigative report prepared by the law firm O’Melveny & Myers.
“Evans could not explain why more than two months after he ended his contractual relationship with Digi because of potential conflicts, he was comfortable requesting and receiving” the stock, the report says.
The report also says that when Evans agreed to consult for Digi Outdoor, he was aware of MacCord’s potential aim of persuading the D.C. Council to pass legislation that would help the company.
The Washington Post reported last year that Digi issued stock to Evans’s consulting firm — where Evans was the sole employee — a month before the lawmaker promoted legislation that would have benefited Digi Outdoor.
Evans’s dealings with Digi have also attracted the attention of federal prosecutors. Evans has not been charged with a crime.
Evans has told The Post that he returned the stock “as soon as it was received,” just as he had returned the retainer fee.
In a written response to the report, Evans’s lawyers, Mark Tuohey and Abbe Lowell, pointed to Evans’s decision to return the stock and money. They called the report biased and said it “inaccurately states the facts and mischaracterizes the nature” of the stock transfer.
“To punish Mr. Evans for thinking the relationship with Digi over and correcting course — which occurred before there was one word of protest or scrutiny from the media, his colleagues, or anyone else — would be to punish him for doing exactly what any citizen would expect of a responsible public official,” the lawyers wrote.
Evans’s lawyers said his actions as a lawmaker were not related to his consideration of the sign company as a client. “The actions Mr. Evans or his staff took were in keeping with his positions on pro-business, antiregulation, etc.,” they wrote.
MacCord is serving time in federal prison for a wire fraud conviction related to Digi Outdoor but unrelated to his dealings with Evans. Reached by the council’s investigators, he declined to provide testimony without immunity from criminal prosecution, a guarantee the investigators could not provide, the report says.
During more than a year leading up to the 2016 consulting agreement, MacCord was in touch with Evans and his office about D.C. sign regulations, the report says. MacCord planned to rely on an interpretation of District code that the city’s Department of Consumer and Regulatory Affairs (DCRA) would later contest.
“Evans’ support of Digi’s operations was of such critical importance to Digi’s investors that they ‘would not have gone forward with the [investment]’ without it,” the report says, citing testimony from an investor.
In early 2016, Digi’s investors met with Evans to gauge MacCord’s access to him as well as his ability to resolve municipal issues that the project encountered, according to the report.
Days after the meeting, MacCord secured millions of dollars in funding from the investors, the report says.
That July, as MacCord’s company erected signs across the District, City Administrator Rashad M. Young issued an emergency rule to prohibit them. Also that month, Evans created a company called NSE Consulting and solicited Digi to be among its clients, the report says.
Evans created two retainer agreements, one for Digi Outdoor and one for a Digi affiliate, and MacCord directed a company official to issue two $25,000 checks to NSE. The agreements were to go into effect on Aug. 1, 2016, according to copies of the agreements.
On Aug. 16, the DCRA issued MacCord’s company a “stop work order.” The next day, according to the report, MacCord emailed Evans: “DCRA is out of line, we need to get them to back off.” Evans, who was at a Hillary Clinton fundraising event on Nantucket island that MacCord also attended, referred the email to his chief of staff, Schannette Grant, the report says.
When The Post asked Evans last year about the checks, he produced a letter dated Aug. 25, 2016, from him to MacCord indicating that he had returned the money. In explaining the decision to council investigators, Evans said he had begun to doubt the appropriateness of his business relationship with MacCord’s company, the report says. He said he consulted Grant and the prominent D.C. lobbyist Bill Jarvis, both of whom urged him to return the money.
Jarvis, who helped Evans set up NSE and negotiate its contracts, advised Evans to document his return of the checks, the report says. In a letter that Evans told council investigators Jarvis drafted, Evans said he had learned that MacCord’s company was “engaged in a potential dispute” with the District over the sign construction 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.”
According to the investigators’ report, the potential conflict did not prevent Evans from asking for the Digi Outdoor stock.
A Digi executive, Mark Scott, told the council’s investigators that he believed the stock was payment for NSE’s consulting services.
Evans told the council’s investigators that he told MacCord he could not accept the stock as a gift and intended to purchase it. “So if you’re representing somebody or you’re dealing with somebody, if you can get stock at a [sic] insider price, so to speak – [...] It becomes public, and then you can make a fortune,” Evans told investigators, according to the report.
In late September, MacCord emailed Evans to say “Shares are coming my friend,” according to council investigators, who read the email to Evans during their interview with him.
Evans responded, “Okay,” according to a transcript of the interview.
The lawmaker asked MacCord to gather political contributions for a Virginia congressional candidate, LuAnn Bennett, and for Hillary Clinton, the report says. On Oct. 23, the report says, “Evans used an email to MacCord about additional contributions to the Clinton campaign as an opportunity to check the status of his Digi shares, which were still outstanding.”
“Any chance to get checks Monday. Also haven’t gotten anything on stock,” Evans’s email said, according to the report.
MacCord replied, “I will stop by with checks, and you should have your stock certificates any day now,” according to the interview transcript.
A week later, MacCord emailed Evans a copy of a stock certificate and a FedEx tracking number.
Evans’s lawyers said he had contemplated buying the stock at market rate but never consummated the transaction and decided to return the stock certificate.
Evans told council investigators that “from my perspective, the appearance of this was terrible. So that’s why I gave it back,” according to the transcript. “I got in the car and drove and gave him the stock back.”
Grant corroborated Evans’s account.
Three weeks after Evans received the stock, he and his legislative director, Ruth Werner, met with MacCord and his lobbyists about the legislation MacCord wanted, the report says. Werner told investigators that the proposed legislation, which was placed on the agenda at Evans’s behest two weeks later, had been written by MacCord’s lobbyists.
The bill, which Evans tried but failed to win enough support to advance, would have allowed MacCord’s signs while heading off any competitors who tried to follow.
Evans told investigators that, given his return of the money and stock and the proposed legislation’s failure to advance, he felt he hadn’t done anything wrong, according to the transcript. “I can’t imagine what else I could have done that was more right than what I did.”