D.C. Mayor Vincent Gray knew that his 2010 campaign received money donated illegally by a businessman with multimillion-dollar city contracts, and even asked personally for the funds, federal prosecutors alleged in court Monday.
Gray refuted the claims in a later interview and said he was innocent. “I maintain these are lies,” Gray told News4’s Tom Sherwood Monday afternoon. “These are absolute lies.”
Businessman Jeffrey Thompson, 58, pleaded guilty in federal court to conspiracy to violate D.C. and federal campaign finance laws by funneling more than $3.3 million in unreported donations to at least 28 local and national candidates and their campaigns.
Those candidates included Gray, who is the front-runner in D.C.'s current democratic primary for mayor, as well as candidates for D.C. Council, Congress and a candidate for president, prosecutors said in court filings and in a hearing Monday.
Thompson was charged in a criminal information filed Monday morning. He appeared in court Monday afternoon, where a judge said he faces two years in prison. If he complies fully with the terms of the plea deal, one count carrying an 18-month sentence could be dropped and he could serve a total of six months on the second count. The sentence also could be reduced to home confinement.
Also in that hearing, federal prosecutors said that Gray met with Thompson about the fundraising and agreed to keep the support secret.
Thompson instructed Gray to refer to him as "Uncle Earl" to hide Thompson's identity, reported News4's Scott MacFarlane from court.
Gray told News4 he agreed to that because Thompson was worried then Mayor Adrian Fenty would find out he was supporting his opponent and interfere with Thompson's companies' contracts with the city.
“Initially he said no, that he wouldn’t raise money for the campaign,” Gray said. “He was fearful of what would happen to him because of the Fenty Administration.”
Gray asked Thompson to help fund a get-out-the-vote effort and to pay $40,000 for improvements to a friend's home, prosecutors said. In court, Thompson acknowledged giving $40,000 to a close friend of Gray and $10,000 to a relative of Gray.
The charges allege that Thompson funneled $668,800 to the campaign of a candidate for D.C. mayor between May and September 2010. The candidate is not named in the filing, but federal prosecutors said in court that Gray is the "2010 mayoral candidate" at the center of the case.
The filings also claim that the unreported donation was made "in coordination with" the candidate.
“With respect to him raising money for my campaign, I thought that was being done in a perfectly legitimate fashion,” Gray said. “I’ve said that from day one and I maintain that, to my knowledge anyway, it was a perfectly legitimate experience.”
Gray's campaign released a statement before the court hearing Monday, saying, "Mayor Gray called for this investigation. Mayor Gray has always said he did not break any laws."
THE CHARGES AGAINST THOMPSON
One of the charges against Thompson is a federal offense: Conspiring to violate federal campaign finance laws and to submit false filings to the Internal Revenue Service. The other is a D.C. offense: Conspiring to violate local campaign finance laws by defrauding D.C.'s Office of Campaign Finance.
The 10-page filing alleges that Thompson illegally funneled millions to multiple campaigns:
- The documents say he illegally gave to 15 different local candidates in D.C. Council races between 2006 and 2012 and in the mayoral elections in both 2006 and 2010.
- He also gave nearly $1 million in illegal campaign funds to federal campaigns, including to several members of the House of Representatives and to the primary race of at least one presidential candidate, the papers say.
The charging documents so far do not identify any candidates who allegedly received the illegal funds.
However, at least one person has pleaded guilty to helping funnel $650,000 to Hillary Clinton's Texas primary effort, and two have pleaded guilty to helping funnel money to Gray's 2010 campaign.
Thompson also donated $608,750 to fund a shadow campaign for a 2008 candidate for president believed to be Hillary Clinton, prosecutors said.
In addition, former D.C. Councilmember Michael A. Brown has admitted to taking money from Thompson. In court Monday, Thompson said he gave Brown $200,000 to drop out of the 2006 race for mayor.
A big player in both local and federal politics, Thompson owned multiple million-dollar companies with large contracts from the city. That included the most lucrative contract the city gives out, worth more than $300 million each year for Thompson's company D.C. Chartered Health Plan, to provide health care services to the city's poorest residents.
Thompson stepped down from D.C. Chartered Health Plan in April 2012, after FBI and IRS agents raided his home and office. He then left his accounting firm, Thompson, Cobb, Bazilio & Associates, in July 2012.
According to a court document, Thompson is being represented by a public defender.
Thompson must surrender his passport and his right to vote. His next court date is May 15 at 1 p.m.
THREE-YEAR INVESTIGATION LED TO THOMPSON
The investigation began in spring 2011 when U.S. Attorney Ronald Machen began looking into whether Gray or his campaign aides secretly gave cash and checks to Sulaimon Brown, a minor candidate for mayor, in return for Brown's aggressive attacks on then-Mayor Adrian Fenty.
Brown contended the campaign did pay him and also rewarded him with a $110,000-a-year city job, from which he was later fired for inappropriate conduct.
Since those allegations caught Machen's attention, nine people with ties either to Thompson or to Gray's 2010 campaign -- including Thompson himself -- have pleaded guilty to various charges over the course of the investigation.
Two Gray campaign supporters, Howard Brooks and Thomas Gore, pleaded guilty to covering up the payments to Brown.
Then, in July 2012, Jeanne Clark Harris, a long-time supporter of Gray and business partner of Thompson, pleaded guilty to funneling more than $650,000 from Thompson to a shadow campaign for Gray. "The 2010 mayoral election was corrupted by a massive infusion of cash that was illegally concealed from the voters in the District," Machen said at that time.
Not long after, three business associates of Thompson -- Troy White, Lee Calhoun and Stanley L. Straughter -- pleaded guilty to helping Thompson illegally fund national campaigns, including Hillary Clinton's.
Last August, Vernon Hawkins, a longtime associate of both Thompson and Gray, pleaded guilty to lying to investigators about the shadow campaign.
During Hawkins' plea hearing, Gray's name was mentioned for the first time as the beneficiary of the shadow campaign.
Michael A. Brown has admitted to taking about $120,000 in secret, illegal campaign donations in 2007 and 2008 in conjunction with Harris and a businessman only identified as "Co-Conspirator 1." Media reports have identified "Co-Conspirator 1" as Thompson.
The Democratic primary is April 1, and early voting begins a week from Monday. A poll by NBC4, WAMU, the Washington Informer and Marist released in February shows Gray leading the race.
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