This article is from the source 'washpo' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.washingtonpost.com/local/crime/jeffrey-thompson-alleged-shadow-campaign-funder-is-charged-in-federal-court/2014/03/10/7bf6ca14-99a8-11e3-80ac-63a8ba7f7942_story.html?wprss=rss_homepage

The article has changed 14 times. There is an RSS feed of changes available.

Version 10 Version 11
Gray knew of ‘shadow’ campaign, Thompson prosecutors say; mayor says, ‘These are lies’ Gray knew of ‘shadow campaign,’ Thompson prosecutors say; mayor says it’s all a lie
(about 1 hour later)
Mayor Vincent C. Gray knew about the illegal “shadow” campaign that helped get him elected in 2010, and personally asked a D.C. businessman for help funding the operation, federal prosecutors said Monday. Mayor Vincent C. Gray had detailed knowledge about an illegal fundraising operation that helped him capture the 2010 election and personally asked a prominent D.C. business executive to finance the scheme, prosecutors said Monday.
At a court hearing, prosecutors alleged for the first time that Gray (D) understood that he had to keep the illegal campaign a secret. In fact, Gray and the businessman, Jeffrey E. Thompson, agreed that the candidate would refer to Thompson as “Uncle Earl” to keep the scheme hidden, prosecutors said. At a court hearing likely to roil the current mayoral race, prosecutors for the first time alleged that Gray (D) knew about businessman Jeffrey E. Thompson’s conspiracy to pump more than $660,000 in illegal donations into the campaign.
“Gray agreed to keep Mr. Thompson’s support secret,” Asst. U.S. Attorney Michael Atkinson said at the hearing. In fact, prosecutors said, Gray and the businessman devised a plan in which Gray would refer to Thompson as “Uncle Earl” to conceal his identity.
The new details were revealed at a hearing at which Thompson pleaded guilty to funneling more than $2 million in illegal contributions to federal and local political campaigns, including Gray’s 2010 bid to oust then incumbent Adrian Fenty. The new details about the mayor’s purported involvement emerged at a hearing in which Thompson pleaded guilty to funneling more than $2 million in illegal donations to federal and local campaigns over a six-year period.
Gray, who has long denied wrongdoing, dismissed prosecutors’ charges as “lies” and vowed to serve out his term and continue his campaign for a second term. “Jeff Thompson’s guilty plea pulls back the curtain to expose widespread corruption,” U.S. Attorney Ronald C. Machen Jr. said at a news conference after the hearing. “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.”
“It’s shocking to me,” Gray said during an interview in his sixth floor office at the Wilson Building. “Lies. These are lies.” Machen said that investigators would “hold accountable all of those who conspired . . . to withhold the truth from the public” and urged Thompson’s collaborators to “come forward and own up to your conduct.”
Thompson, the mayor contended, was seeking to implicate him in order to lessen the amount of time he would spend in jail. Gray, who has long denied wrongdoing, invited reporters to his office Monday and accused Thompson of lying. He vowed to serve out his term and continue campaigning for reelection ahead of the April 1 Democratic primary.
At the same time, the mayor confirmed that he referred to Thompson as “Uncle Earl,” but said it was to keep the businessman’s identity hidden from Fenty, who was also receiving money from him. “It’s shocking to me,” Gray said, his voice measured during an interview. “Lies. These are lies.”
In court, prosecutors portrayed the mayor as having intimate knowledge of Thompson’s campaign finance schemes and the need for them to be secret. Thompson, the mayor said, was seeking to implicate him in order to reduce his jail sentence. At the same time, Gray confirmed that he referred to Thompson as “Uncle Earl.” But he said he was seeking to keep the businessman’s identity hidden from his opponent in 2010, then-Mayor Adrian M. Fenty, who was also receiving money from Thompson.
After launching his bid for the mayoralty, Gray spoke to Thompson three days before a campaign finance deadline to “accelerate his fundraising,” prosecutors said. Thompson came through with checks, many of them “straw donations” from other individuals whom the businessman then reimbursed. Thompson said in court that his secret spending went well beyond his support for Gray and that he made illegal contributions to more than two dozen federal and local candidates between 2006 to 2012.
Later in the campaign, a key figure in the illegal campaign asked Thompson for more than $400,000 to fund a get- out-the-vote operation, Atkinson said. In the most high-profile instance, Thompson in 2008 secretly spent more than $600,000 on canvassers and campaign materials to reach voters on behalf of Hillary Rodham Clinton during five primary contests with then-Sen. Barack Obama. While Machen did not identify Clinton by name on Monday, he specifically said that the presidential candidate referenced in court documents was not aware of the illegal effort.
In response, Thompson insisted that Gray ask for funds himself, and the two men met at a Gray associate’s apartment. There, prosecutors said, Gray presented Thompson with a one-page budget and “expressed gratitude” for his assistance. In court, Thompson, once a powerful force in District politics with a vast network of allies, stood for nearly an hour as U.S. District Judge Colleen Kollar-Kotelly quizzed him about his efforts to influence federal and District elections.
In regard to his support for Gray, Thompson wanted to keep their pact secret to avoid retribution from Fenty, according to his agreement. Thompson hoped that Gray’s ascension to the mayor’s office would create new opportunities for his health-care company, he told prosecutors.
“Mayor Gray asked you to pay for the get-out-the-vote effort?” the judge asked.
“Yes, your honor,” Thompson said.
“And you agreed to pay for it?” the judge continued.
“Yes,” Thompson answered as reporters, lawyers and community activists jamming the courtroom watched from the gallery.
According to the plea deal, Thompson and Gray had at least two conversations specifically about the contractor’s support. Three days before a deadline to report contributions, Gray urged Thompson to “accelerate his fundraising,” the businessman told prosecutors. Thompson collected the checks, many of them donations from other individuals whom the businessman then illegally reimbursed.
Thompson said in court that Gray and most of the other candidates he supported knew about his unreported “shadow” campaigns.
At one point during the 2010 mayoral race, Thompson said, a Gray associate asked him for more than $400,000 to finance a plan to get voters to the polls on Election Day.
In response, Thompson said he insisted that Gray ask for funds himself. During a meeting at a the apartment of a Gray associate, Gray presented Thompson with a one-page $425,000 budget for the get-out-the-vote campaign and “expressed gratitude” for his assistance.
After the election, prosecutors said, Thompson gave a $10,000 check to Gray’s “close family member” to settle debts with campaign workers. At Gray’s request, Thompson also gave $10,000 to fund a unnamed union election campaign.After the election, prosecutors said, Thompson gave a $10,000 check to Gray’s “close family member” to settle debts with campaign workers. At Gray’s request, Thompson also gave $10,000 to fund a unnamed union election campaign.
Later, after Gray was inaugurated, Atkinson said, Thompson gave $40,000 to the mayor’s “close personal friend” to finance home improvements. Later, after Gray was inaugurated, Thompson gave $40,000 to the mayor’s “close personal friend” to finance home improvements, Assistant U.S. Attorney Michael Atkinson said.
After all this, Atkinson said, Thompson appealed to Gray, through an associate, to “expedite” a pending settlement involving his firm, D.C. Chartered Health Plan. Subsequently, prosecutors said, Thompson appealed to Gray, through an associate, Jeanne Harris, to “expedite” a pending settlement with the city involving his firm, D.C. Chartered Health Plan.
Thompson was charged with subverting campaign finance laws to steer money to mayoral and D.C. council candidates from 2006 to 2012. He pleaded guilty to one count each of conspiring to break federal and local campaign finance laws during a six-year period through illegal conduit contributions and off-the-books spending, totaling more than $2 million. When asked in court whether Harris had talked to the mayor, Thompson said, “Based on what Miss Harris told me, yes.”
Under terms discussed in court Monday, Thompson could face at most six months in prison, followed by three years of supervised release. The plea agreement was approved by the judge in the case, Colleen Kollar-Kotelly. Thompson soon learned that the District government was “resolving the matter,” according to his plea agreement.
Thompson’s defense team and prosecutors had been negotiating a deal for weeks, according to several people familiar with the talks. Investigators have been looking at the city’s decision to pay Thompson’s health-care company $7.5 million to settle a dispute over reimbursements that had begun during the Fenty administration. Investigators have explored what role, if any, Gray and his deputies played in the 2011 deal.
Beyond Gray’s 2010 campaign, prosecutors say, Thompson secretly spent $812,146 in support of seven candidates for mayor and D.C. Council. The mayor has said that Thompson never asked him for any favors, and city officials have defended the Chartered settlement as aboveboard and equitable.
For three years prosecutors have been building a case against Thompson, whom associates had identified as the financier of an illegal campaign on Gray’s behalf and as the mastermind behind secret contributions to a long list of other local and federal political candidates. Thompson’s defense team and prosecutors had been negotiating a deal for weeks, finalizing an agreement Friday. He pleaded guilty to one count each of conspiring to break federal and local campaign finance laws and could face at most six months in prison, followed by three years of supervised release. If he had been convicted at trial, he could have faced up to five years in prison.
The new court filing estimates that Thompson spent about $668,80o on campaign materials and services for Gray — more than has been previously reported. Beyond Gray’s 2010 campaign, prosecutors say, Thompson secretly spent $812,146 in support of seven candidates for mayor and D.C. Council. The new court filing estimates that Thompson spent about $668,80o on campaign materials and services for Gray — more than has been previously reported.
Seven people connected to Thompson or affiliated with Gray’s last campaign have pleaded guilty in federal court in the past two years. Thompson, 58, has been alluded to in case after case, but until now he had been identified in court documents only as an unnamed co-conspirator. Seven people connected to Thompson or affiliated with Gray’s last campaign have pleaded guilty in federal court in the past two years. Prosecutors have alluded to Thompson in case after case, but until Monday he had been identified in court documents only as an unnamed co-conspirator.
The charges against Thompson reignite questions for Gray about campaign finance irregularities in his first mayoral campaign as he faces a crowded Democratic primary field on April 1. The mayor has not been accused of any crime, but he has apologized to D.C. residents and acknowledged the “misdeeds and missteps” of his associates. During much of the investigation, Thompson attorney Brendan V. Sullivan Jr. had publicly shown no interest in negotiating with Machen’s office. He had fought the government over certain documents seized in raids in 2012, appealing late last year to the Supreme Court.
On Monday before the hearing, Gray said he had only scanned the court papers but said he had no involvement in the shadow campaign. Atkinson, the prosecutor, said in court that Thompson earlier in the investigation “had destroyed documents relevant” to the case.
“I’ve said all that I know,” the mayor said. “I’ve said this repeatedly. I’ve said I didn’t do anything — that I had nothing to do with this.”
The federal investigation has loomed over Gray as he seeks a second term. More than 40 percent of Democrats say the probe will be a major factor in how they vote this year, a Washington Post poll found. And the survey found that concerns about Gray’s trustworthiness are his most significant weakness among a public that generally approves of the job he’s doing as mayor.
Thompson, who did hundreds of millions of dollars in city business through his health-care firm, has not commented on the investigation since March 2012, when federal agents searched his home and offices. His attorneys were not immediately available to comment Monday.
During much of the investigation, Thompson lawyer Brendan V. Sullivan Jr. had publicly shown no interest in negotiating with the office of U.S. Attorney Ronald C. Machen Jr. He had fought the government over certain documents seized in the 2012 raids, appealing late last year to the Supreme Court.
In recent weeks, however, Thompson’s defense team has been sharing information with prosecutors as part of plea talks, according to two people familiar with the private discussions.In recent weeks, however, Thompson’s defense team has been sharing information with prosecutors as part of plea talks, according to two people familiar with the private discussions.
Thompson’s associates have described in early court proceedings a tag-team effort by Thompson and public relations consultant Jeanne Clarke Harris to avoid campaign finance laws, which place strict limits on donations. Thompson funneled hundreds of thousands of dollars through companies owned by Harris to benefit candidates he did not want to support publicly. Court papers filed Monday do not name any candidates. At the judge’s prompting on Monday, prosecutors referred to Gray by name in court.
Court papers filed Monday do not name any candidates. Documents and interviews with people familiar with the contributions show that Thompson spent about $278,000 for the 2006 mayoral campaign of Democrat Linda W. Cropp. He also spent smaller amounts on behalf of former council member Michael A. Brown in 2007 and 2008 and the council candidacy of Mark H. Long, an independent, in 2008.
But the documents and interviews with people familiar with the contributions show that Thompson spent about $278,000 for the 2006 mayoral campaign of Democrat Linda W. Cropp. He also spent smaller amounts on behalf of former council member Michael A. Brown in 2007 and 2008, and the insurgent council candidacy of Mark H. Long, an independent, in 2008. In 2010, Thompson backed Democratic council hopefuls Jeff Smith ($140,000) and Kelvin Robinson ($26,000), and he spent about $148,000 for council member Vincent B. Orange (D-At Large) in 2011. None of the contributions were reported as required by local campaign finance laws.
In 2010, Thompson backed Democratic council hopefuls Jeff Smith ($140,000) and Kelvin Robinson ($26,000), and he spent about $148,146 for council member Vincent B. Orange (D-At Large) in 2011. None of the contributions were reported as required by local campaign finance laws. Thompson told the judge he did not communicate with Cropp or Orange directly about the illegal funds.
Earlier documents and interviews also show that Thompson secretly spent more than a half-million dollars on get-out-the-vote efforts for Hillary Rodham Clinton in 2008 during Democratic primaries in at least four states. In addition to the shadow campaigns, Thompson also arranged $250,000 in illegal conduit donations — made in the names of family, friends and colleagues — but later reimbursed through his accounting firm and personal accounts. The donations went to at least 13 federal candidates for the Senate and House of Representatives, including to Del. Eleanor Holmes Norton (D-D.C.) and then-Sen. Arlen Specter (D-Pa.).
Separately, prosecutors have said in court papers that Thompson used his former accounting firm to direct illegal “straw” contributions to scores of political campaigns for nearly a decade. Machen has characterized the firm as an “assembly line” for such donations. Thompson and his attorneys declined to comment after the hearing.
In the new court filing, Thompson is accused of arranging illegal conduit donations to at least 13 federal candidates. The $250,000 in contributions were made with Thompson’s money, according to prosecutors, but were reported as coming from employees and other associates. As details emerged from the courtroom, D.C. Council Chairman Phil Mendelson (D) urged calm.
The donations went to candidates for the Senate and House of Representatives, including to Del. Eleanor Holmes Norton (D-D.C.) and then-Sen. Arlen Specter (D-Pa.). “This is all coming to us as a matter of first impressions. We need to sift through all of the facts to understand it,” Mendelson said. He said with the primary only weeks away the four council members on the ballot “should stay out of this for the moment. “
D.C. Council chairman Phil Mendelson (D) urged calm as news spilled out of the courthouse. They did not. Council member Tommy Wells (D-Ward 6), who is challenging Gray, said it was a “sad day” for the District. If the allegations are true, he said, “he absolutely is disqualified from serving from mayor any longer.
“This is all coming to us as a matter of first impressions, we need to sift through all of the facts to understand it,” Mendelson said. “The fact that we are so close to the primary, and the four council members on the ballot should stay out of this for the moment. “ Aaron C. Davis, Mike DeBonis and Marc Fisher contributed to this report.
They did not. Council member Tommy Wells, who is challenging Gray, said it was a “sad day” for District, and if the allegations are true:, “So he absolutely is disqualified from serving from mayor any longer.
Aaron C. Davis and Matt Zapotosky contributed to this report.
Get updates on your area delivered via e-mail