Bailey emailed invitations to the event, and a Gray campaign document identified Bailey as its host. But the invitations did not list Bailey among the event’s 18-member host committee, and Gray said Thursday that he did not consider Bailey a host or organizer.
“It’s not an Emmanuel Bailey event,” Gray said. “There was a whole group of people who put this on.”
Some council members have expressed concerns about Bailey’s role in the gambling contract, posing questions to city officials and asking for a review by the D.C. attorney general.
Bailey is chief executive of a subsidiary of the Greek gambling giant Intralot, to which the D.C. Council in July granted a no-bid contract to bring sports gambling to the nation’s capital and to continue running its lottery. The vote was 7 to 5.
In paperwork to obtain the contract, Intralot said more than half the work would go to a small D.C. firm called Veterans Services Corp., which was run by Bailey and listed his mother as its chairman. District law requires companies with large public contracts to subcontract some work to small local businesses.
A Washington Post inquiry in August showed that Veterans Services Corp. had no employees and touted on its website executives who didn’t work there. Intralot officials acknowledged the work would be performed by DC09, a company Intralot controlled, and that Bailey was paid about $600,000 per year to head. Veterans Services owned 51 percent of DC09 but had no control over it, and Bailey’s firm’s losses due to that financial stake were substantially overshadowed by his compensation from Intralot or its subsidiary, company financial statements showed.
Council members Elissa Silverman (I-At Large) and Mary M. Cheh (D-Ward 3) asked D.C. Attorney General Karl A. Racine’s office to look into Intralot’s subcontracting arrangement. In an email to Racine (D), Cheh asked him “to investigate whether Intralot, Veterans Services Corp., and DC09 have engaged in fraudulent activity.” Racine’s office has said it was reviewing the matter but did not provide an update Thursday.
Silverman’s office said Thursday that the attorney general said the investigation did not find anything illegal, but she expects a fuller response soon.
Silverman and council member Robert C. White Jr. (D-At Large) also expressed concerns and posed written questions to the city’s chief financial officer and to the Department of Small and Local Business Development. In September, the department’s director, Kristi Whitfield, responded that “the contract is compliant” with D.C. subcontracting law. The chief financial officer replied that the contract work was getting done, the subcontractors were current on tax payments and they were not on the District’s list of debarred vendors.
In November, White, Cheh and other council members introduced a bill that, according to its text, is aimed at “closing loopholes to prevent program abuse and manipulation” of the District’s subcontracting law. Among other things, the bill would prohibit contractors from subcontracting work to companies in which they have an ownership stake to fulfill the law’s requirements.
Bailey emailed invitations to Wednesday’s fundraiser via his DC09 email account with the subject line: “PERSONAL EVENT NOT ASSOCIATED OR AFFILIATED WITH DC09LLC.” The event was held at the home of Broughton Construction executive Casey Stringer.
As Bailey left the event, he told a reporter, “Just so you know, it’s a constitutional right,” appearing to refer to his role as a host.
Thies said Thursday that he had referred to the fundraiser as “an Emmanuel Bailey event.” He said, “I thought of it as a fundraiser that Emmanuel was participating in as a co-host and someone who was assisting with bringing people to the event.”
During initial controversy over the no-bid contract, Gray said his support hinged on lawmakers dedicating sports betting revenue to early-childhood-care and violence-prevention programs. The contract’s opponents voted against his proposal to do that, but Gray voted for the contract anyway. The council later agreed to redirect revenue.
Fenit Nirappil contributed to this report.