WHAT IS the District scandal really about? It is not, as it might seem, a simple tale of skirting campaign finance laws. It is more fundamental and more insidious.

D.C. businessman Jeffrey E. Thompson, having amassed great wealth from government contracts, illegally used some of the proceeds to subvert the election process and install officials who would, in turn, be even more helpful to his business interests. That a lion’s share of the public dollars were aimed at providing health care to the city’s poor makes the double-dealing all the more despicable.

As documents submitted to a federal court Monday show, Mr. Thompson spent hundreds of thousands of dollars in 2006 in an effort to elect a mayor to his liking. His candidate lost, so he tried again in 2010. This time, his favored candidate, Vincent C. Gray (D), won. Months into his mayoralty, Mr. Gray approved a multimillion-dollar settlement of a contract dispute that repaid Mr. Thompson with interest.

Mr. Gray says the settlement was made on the merits. He maintains that he was unaware of the illegal “shadow campaign” that Mr. Thompson financed on his behalf. He says that Mr. Thompson — and presumably several witnesses who are expected to corroborate Mr. Thompson’s story — are lying.

U.S. Attorney Ronald C. Machen Jr. has a different view. “Today’s guilty plea pulls back the curtain on years of widespread corruption,” he said after Mr. Thompson pleaded guilty Monday to two felonies as part of a plea arrangement with the federal government.

Prosecutors detailed how Mr. Thompson secretly channeled more than $3.3 million in illegal contributions to more than 25 candidates running for local and federal offices. In 2006 he spent $350,000 to induce Michael A. Brown (D) to drop out of the mayor’s race and another $411,000 on behalf of Linda Cropp (D), then the D.C. Council chair. (Prosecutors do not allege that Ms. Cropp was aware of the illegal efforts.)

Despite his best efforts, she lost and Adrian M. Fenty (D) was elected. Mr. Thompson’s worries about a Fenty administration were realized when the city sued his firm for excessive expenses, winning a settlement in 2008 that called for a $12 million payment to the city and an additional $5.25 million in charitable contributions. So when, as detailed by prosecutors, Mr. Gray and his associates came calling in 2010 to see if Mr. Thompson would support a Gray candidacy, he was happy to oblige. He spent more than $660,000 on a shadow campaign and reimbursed straw donors to the official campaign in an effort that helped turn Mr. Fenty out of office.

Mr. Thompson supported Mr. Gray, federal prosecutors wrote in court filings, on the expectation that his election would improve the business climate for D.C. Chartered Health Plan, Mr. Thompson’s company, which had a $300 million annual contract with the city. In its first year in office, the Gray administration approved a $7.2 million payment to his company that had been nixed by the Fenty administration.

Mr. Gray told The Post’s Aaron C. Davis he doesn’t recall Jeanne Clarke Harris, a former Thompson associate who also has pleaded guilty, asking him on Mr. Thompson’s behalf to expedite the settlement but, “putting that aside for a minute, what if she had? Is that illegal?”

That’s one of the questions that has yet to be answered by Mr. Machen’s office.