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The mayor delivered his personal defense in front of dozens of onlookers in an unusual setting - a pathway between houses east of the Anacostia River, where he unveiled an environmentally friendly type of porous concrete that should reduce runoff pollution.

“I never expected to see so many people in an alley in Ward 7,” he said with a smile.

But sustainability efforts were not the topic of the hour. From the moment Mr. Gray’s entourage pulled up in a Lincoln Navigator, it was clear he would have to address the game-changing court appearance of Jeanne C. Harris, a 75-year-old Gray donor and campaign operative who admitted she managed straw donations and unreported campaign expenditures on behalf of a D.C. businessman who wanted to see Mr. Gray elected to protect his contracts with the city.

Prosecutors say Harris used one of her companies as a pass-through for hundreds of thousands of dollars to the Gray campaign for Nextel radios, yard signs, T-shirts and other supplies that bore the logos of the official campaign and were purchased from the same vendors. All of the money came from an unnamed co-conspirator, widely thought to be Jeffrey E. Thompson.

Mr. Thompson is the owner of an accounting firm and holds a lucrative managed care contract with the District through D.C. Chartered Health. He is attempting to sell Chartered because the city government has made clear that it no longer wants to do business with him.

Despite some early interest from AmeriHealth Mercy of Philadelphia, he does not appear to have a confirmed buyer. He must move fast, because the city would like to select vendors for the new contract by October, officials said Wednesday.

Court papers filed by the U.S. attorney’s office say members of the Gray campaign told Harris and her unnamed conspirator in July 2010 that the campaign needed money.

“I actually thought we had raised a lot of money, to tell you the truth,” Mr. Gray said, when asked Wednesday to provide his view of the campaign’s financial status at the time. “It was a very short campaign.”

He said a record of any checks received by the campaign would have been turned in to the D.C. Office of Campaign Finance, but noted that it is “not possible” for a candidate to sit down and personally review every contribution that comes into the campaign’s accounts.

Harris is the third Gray campaign operative to plead guilty to criminal charges, after a pair of staffers admitted that they paid a minor mayoral candidate to stay in the race so he could verbally attack Mr. Fenty.

The latest charges are sending shock waves through the D.C. political scene as the most damning evidence yet in an 18-month term marred by scandal. Earlier this year, Mr. Catania joined Ms. Cheh and Tommy Wells, Ward 6 Democrat, in demanding that Mr. Thomas step down from the council after he agreed to repay $350,000 in stolen public funds as part of a settlement with the D.C. attorney general.

Now, all eyes are on the mayor.

“He’s a good man and he will continue to do his work, but everything will be obscured, everything will be pulled to the bottom because of that question [about his campaign],” said Ms. Cheh, who provided a valuable endorsement to Mr. Gray from a part of the city that overwhelmingly supported Mr. Fenty during the mayoral race. “Everybody I saw today, no matter what we talked about, at some point they said, ‘What’s going on with the mayor?’ “

D.C. Council Chairman Phil Mendelson said that calls for Mr. Gray to resign create “instability at a time when we need just the opposite.”

While he applauded U.S. Attorney Ronald C. Machen Jr.’s efforts to expose corruption, the suspicion of a shadow campaign in Mr. Gray’s 2010 bid “is not new news” and “typically people say that the process should play itself out.”

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