A small firm owned by D.C. Council member Jack Evans (D-Ward 2) was paid $50,000 from a digital sign company but he returned the checks without cashing them. (Michael Robinson Chavez/The Washington Post)

Ethics officials are investigating D.C. Council member Jack Evans (D-Ward 2) for his dealings with a digital sign company that would have benefited from legislation he proposed, according to District government officials familiar with the matter.

Among other things, investigators are scrutinizing $50,000 the company tried to pay a small firm owned by Evans in 2016 — several months before the lawmaker circulated a bill that would have aided the sign business in a dispute with District regulators.

Digi Media Communications wrote two $25,000 checks on Aug. 11, 2016, to NSE Consulting, a company Evans had established less than a month earlier, according to city officials with knowledge of the payment. Evans did not deposit the checks and returned them two weeks later to Digi Media board member Donald MacCord, citing concerns about a potential conflict of interest.

Evans said in an interview that he negotiated the payment as a retainer for legal services he planned to offer the sign company in its business dealings outside the District. He said the arrangement would not have violated ethics rules because he could have recused himself from council votes affecting the sign company.

However, Evans said, he had second thoughts and returned the checks without depositing them.

“There was nothing improper about it,” he said. “From my perspective, I like to be very clean, for lack of a better way of discussing it, because the perception always becomes more important than reality. So I just didn’t even want to have a perception of a conflict of interest.”

Evans said no specific event had triggered his decision to return the $50,000. “It was just getting the checks and saying, ‘Hmm, I don’t think this is a good idea,’ ” he said.

On Aug. 25, Evans sent the checks back to MacCord with a letter — which the council member provided to The Washington Post — stating that he 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.”

Digi Media ran into trouble with city regulators in mid-July 2016, when the D.C. Department of Consumer and Regulatory Affairs said it would revoke permits for signs the company was constructing at sites because of inaccurate information in the permit applications. When the company persisted in setting up its signs, the agency issued stop-work orders in mid-August.

Later that month, D.C. Attorney General Karl A. Racine sued the company, saying it had illegally erected LED signs on buildings that endangered pedestrians.

Digi Media is contesting the allegations, and the case is pending in D.C. Superior Court. A spokeswoman for Digi Media declined to comment. MacCord could not be reached for comment, and his attorneys did not return calls.

In December 2016, Evans asked Council Chairman Phil Mendelson (D) to place emergency legislation on the agenda for the council’s next meeting that would have legalized the type of signs Digi Media wanted to install. However, Evans did not move ahead with the bill because it did not have the votes to pass.

Evans said he brought forward the legislation at the request of lobbyist David Wilmot.

Wilmot did not return calls for comment but reported lobbying council members, including Evans, on behalf of Digi Media from January through March 2017, according to public records.

NSE Consulting, the company that received the checks, was registered to do business in the District on July 19, 2016, according to public records. Evans is the company’s owner, and its registered agent is William Jarvis, a well-known lobbyist who frequently represents clients before the D.C. Council.

Jarvis did not return calls for comment.

In his 2016 financial disclosure form, Evans reported income from NSE Consulting between $50,000 and $100,000. He made no reference to the firm in his 2017 filing. In an interview, Evans declined to name other clients he might have, saying the information was protected by attorney-client privilege.

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.

The ethics agency’s most recent quarterly report does not name Evans but lists the probe as a “formal investigation into allegations that an elected official took an action or participated in a decision that affected their (or an affiliated person’s) financial interest.”

Evans said no one from the ethics board or any other agency has made contact with him about MacCord and Digi Media. Brent Wolfingbarger, D.C. director of government ethics, said the ethics board could not confirm or deny whether anyone is subject to a pending investigation.

In February, the website District Dig reported on emails showing extensive communications between Evans, his chief of staff and MacCord. Last month, it reported the existence of the ethics investigation.

The emails showed that MacCord offered a paid summer internship to Evans’s son with Digi Outdoor Media — a company founded by MacCord that is affiliated with Digi Media Communications — in June 2016. Evans said his son did not take the internship.

Evans said he and his staff had not treated MacCord’s companies differently from any other businesses that deal with the council. “I know Don, but I don’t know him that well,” Evans said. “We have had no relationship with Digi at all.”

Evans said this week that he had not been in touch with MacCord, a resident of Washington state, for more than a year.