DC’s Off-the-Books Schemes and Shadow Campaigns
Policy + Politics

DC’s Off-the-Books Schemes and Shadow Campaigns

Flickr/C.M. Keiner

The city of Washington D.C. is no stranger to high-profile political scandals.

Memories still burn bright of the arrest of then-Mayor Marion Barry at a downtown hotel in January 1990 after he was caught smoking crack cocaine in an undercover FBI sting operation.

Just last year, a former D.C. Council member, Michael A. Brown, pleaded guilty to taking $55,000 in cash from a company he thought was trying to do business with the city – but that turned out to be another FBI undercover operation.

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Brown – the son of the late U.S. Commerce Secretary Ron Brown – accepted $100 bills stuffed into a duffel bag alongside a Washington Nationals baseball cap. Another wad of cash was tucked inside a Redskins coffee mug.

The latest blockbuster scandal erupted on Monday when wealthy business executive Jeffrey E. Thompson pleaded guilty in federal court to doling out hundreds of thousands of dollars in secret campaign funds to Democratic Mayor Vincent C. Gray during the 2010 campaign. At the federal court hearing – coming just three weeks before the D.C. mayoral primary – prosecutors for the first time alleged that Gray knew about Thompson’s conspiracy to pump more than $660,000 in illegal donations into Gray’s successful campaign to unseat Democratic incumbent Adrian Fenty.

Prosecutors alleged that Gray devised a plan in which he would refer to Thompson as “Uncle Earl” to conceal his identity, The Washington Post reported. Thompson apparently wanted to keep his contributions secret for fear of offending Fenty, just in case the unpopular Fenty managed to pull out a reelection victory in the 2010 primary. At one point, Gray presented Thompson with a one-page, $425,000 budget request that the businessman then funded, according to the plea agreement.

“Jeff Thompson’s guilty plea pulls back the curtain to expose widespread corruption,” U.S. Attorney Ronald C. Machen, Jr., said at a press conference, The Post reported. “His plea gives the citizens of D.C. an inside look at the underground, off-the-books schemes that have corrupted election after election, year after year.”

Indeed, the complex campaign finance corruption scandal has many tentacles – and isn’t limited to local D.C. politics.

Thompson, 58, a self-made multi-millionaire who once headed an accounting and health care empire, admitted to funneling more than $2 million to Gray’s  2010 mayoral campaign, Hillary Rodham Clinton’s unsuccessful 2008 presidential bid and about a dozen other campaigns for the House and Senate.  The unreported contributions were largely funded through friends and associates who made “straw donations” to “shadow campaigns.”

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Thompson’s scheme included diverting more than $608,000 in illicit funds to a New York marketing executive, Troy White, who organized “street teams” to raise Hillary Clinton’s visibility in urban areas during her Democratic primary battle against Barack Obama. White pleaded guilty last September to a misdemeanor in the case.

Machen told reporters on Monday there was no indication that Clinton was aware of the specific activities to aid her campaign. “There are varying degrees of knowledge among the different candidates,” the federal prosecutor said.

Gray has served much of his first term under a cloud of suspicion about the campaign irregularities. Yesterday, he dismissed the allegations against him as shocking “lies” from a corrupt businessman who was cooperating with the prosecutors to try to limit his time in prison. He told The Post his interactions with Thompson were legitimate and similar to his interaction with many other people he asked to raise money for his campaign. 

For now, at least, Gray has not been formally charged in the investigation. His immediate future will be in the hands of D.C. voters when they go to the polls in the all-important April 1 Democratic primary. Victory in the primary is tantamount to election in the heavily Democratic city. Remarkably, Gray has persevered until now despite numerous leaks and media reports   about the federal probe of Thompson.

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Gray, 71, a former D.C. Council chairman, has presided over an economic upswing and building boom in the nation’s capital. Despite his legal woes, Gray has placated residents and business leaders by providing relatively high-quality city services and schools and a business-friendly political climate. Recent surveys put his approval rating at over 60 percent, and before yesterday he was leading a crowded field of Democratic mayoral candidates.

But the timing of Thompson’s plea agreement has left the mayoral campaign in turmoil and undercuts Gray’s successful strategy until now of convincing voters that they should be focusing on his administration’s considerable accomplishments instead of suspicions and speculations dating back nearly four years.

Asked by The Washington Post whether he thinks the prosecutor has tainted his reelection campaign, Gray replied, “I think it certainly doesn’t help. You wonder about the timing of something like this. I mean, I have no idea … I have a job to do, and they have a job to do. I assume they are trying to do it.”

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