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“It’s almost like an interest-free loan that’s been given to him,” Mr. Bennett said. “What right does the city have to give that to him? This will show that for someone who has stolen money blatantly from the city, there’s no repercussion.”

In another penalty-free settlement, council member Harry Thomas Jr., Ward 5 Democrat, agreed to repay the city $300,000 in public funds he was accused of diverting from youth baseball programs.

The city auditor in September asked the D.C. inspector general to investigate financial irregularities by the head of the Ward 5 Metropolitan Police Department Citizens’ Advisory Council, Robert V. Brannum. The auditor investigated after the group’s treasurer, Debbie Smith-Steiner, resigned and said funds could not be accounted for and the council’s leadership was not concerned.

Mr. Brannum, like Mr. Shelton, has not been criminally charged. Mr. Thomas’s home was raided by federal authorities this month, but he, too, has not been charged.

Asked about the settlement and the situation in the ward he represents, Mr. Thomas said, “I’m not going to comment on that for a lot of different reasons.”

Mrs. Smith-Steiner said the situations appeared straightforward and she wondered whether the cases — especially the lower-profile ones — were a law-enforcement priority.

“Where is the actual system that is supposed to be vigilant in bringing criminal justice?”