Despite the return by President Obama and the Democratic Party of a tainted $10,000 donation from D.C. fundraiser Jeffrey E. Thompson, dozens of other federal and local campaign committees, Democrat and Republican alike, continue to hold on to tens of thousands of dollars in contributions they have received from the contractor now at the center of Mayor Vincent C. Gray's deepening fundraising scandal, records show.
And while Maryland Gov. Martin O'Malley, head of the Democratic Governors Association, disclosed Wednesday that his campaign donated $38,000 in questionable Thompson-related cash to a charity, D.C. officials seem dead-set against parting with theirs.
The National Republican Congressional Committee didn't immediately respond Wednesday evening to a question about whether it planned to return or donate to charity the $25,000 it received from Mr. Thompson in 2004.
So-called "toxic donors," such as notorious lobbyist and campaign finance bundler Jack Abramoff, extend their reach in political contests far and wide. But according to campaign finance reform advocates, determining what to do when it surfaces that a donor or their money — or both — are dirty requires a sense of ethics, political judgment, public opinion and tactics.
"That's what campaign managers are paid for," said Meredith McGehee, policy director for the Campaign Legal Center. "It's a political calculation of when to get rid of the money and when to hold tight. It's part of the alchemy of political fundraising."
Mr. Thompson's influence extends deep into D.C. government, and he is widely thought to be an unidentified co-conspirator if not the mastermind of a $650,000 straw donor campaign in support of Mr. Gray in 2010. A Thompson associate, Eugenia Harris, pleaded guilty to participating in a "shadow campaign" that threatens to imperil Mr. Gray's ability to govern.
Mr. Thompson or his network of affiliates have donated to most of the District's sitting council members as well, except for Tommy Wells, Ward 6 Democrat, and Kenyan McDuffie, Ward 5 Democrat, who won a special election in May, when scrutiny of Mr. Thompson's contributions was well-known.
Even as Mr. Obama's campaign moved to disassociate itself with Mr. Thompson's money, city lawmakers and staff were taken aback by the notion of returning Thompson-related funds — both because it delves into closed-out campaigns and because they believe their donations were legal and properly audited.
D.C. Council member Jim Graham, Ward 1 Democrat, said he received checks from Mr. Thompson and there is no reason to believe they were shady donations funneled through a straw-donor scheme. "It's all legal," he said.
Campaign finance records show Mr. Graham received donations directly from Mr. Thompson in May 2006 and September 2010, each for $500. He said his most recent campaign is closed, so "that money doesn't exist."
The notion of giving money back, he said, is a question best posed to candidates with existing campaigns.
"If I had a campaign active right now, that would be worth considering," he said.
Council member Yvette M. Alexander, Ward 7 Democrat, said she has not received money from Mr. Thompson during her current campaign to retain her council seat in November — nor has anyone else, for that matter, as scrutiny continues to swirl around Mr. Thompson and his network of donors. As for contributions to her past campaigns, "That money has been spent, and my former campaigns have been closed out," she said. "If it's spent, it's gone."
Council member Vincent B. Orange, at-large Democrat, faced scrutiny about donations from Mr. Thompson's network during his 2011 campaign to rejoin the council through a special election. He referred "suspicious" money orders to the campaign finance office, which is conducting an audit.
"If the [Office of Campaign Finance] finds something amiss and determines I should make refunds, I would do that," he said, adding that the audit's preliminary findings only mandate $750 in refunds for excessive contributions that, to his knowledge, are not tied to Mr. Thompson.
Mr. Orange noted he has not received money from Mr. Thompson for his current campaign for re-election. To refund contributions from prior, closed campaigns, Mr. Orange said he would have to re-open the relevant campaign and raise the necessary money, just so he could give it to Mr. Thompson.
"That's the only way you could do it," he said.
A spokesman for council member David A. Catania, at-large independent, said there is no basis for trying to return any money related to Mr. Thompson. Any funds received from Mr. Thompson or his affiliates were "actual checks from real people," said Brendan Williams-Kief. "The contributions were appropriately reported and vetted by the D.C. Office of Campaign Finance."
Mr. Catania is the chairman of the Committee on Health and a known critic of Mr. Thompson, who has been forced to seek a buyer for his lucrative managed-care firm, D.C. Chartered Health Plan, by October because the city does not want him to hold the contract any longer.
While campaigns can't keep leftover money for a future election, D.C. elected officials still can transfer funds to a constituent service account, donate it to charity or send the funds to a political party for political purposes, according to Wesley Williams, spokesman for the D.C. Office of Campaign Finance.
The Obama campaign confirmed this week that it was returning the Thompson money, but an email obtained by The Washington Times shows the campaign was put on notice in March. Such red flags are common in politics, veteran campaign operatives say. The email warning came from a local political consultant who wrote: "As a longtime Obama supporter, I write today to bring a matter to your attention in hopes that I can help the Obama campaign avoid any possible embarrassment. Jeffrey Thompson, a major Obama donor, is currently under federal investigation after his office and home were raided this past weekend. My concern is that, as this story continues to grow in scope and profile, the Obama campaign could get pulled into the story."
Like other campaigns, the Obama campaign appears to have ignored that warning until it was reported recently that Mr. Thompson and his network of affiliates donated $10,000 to the campaign.
"With over 2.4 million donors thus far, we constantly review those contributions for issues, in this case we have refunded the contribution," an Obama campaign official wrote in an email Tuesday evening, after sending the same quote earlier in the day to Politico, which first reported the return of Mr. Thompson's $10,000 contribution.
Yet the Obama campaign has been silent about what it plans to do with another roughly $20,000 it has received from Mr. Thompson's associates, including $2,500 from Harris, who pleaded guilty in federal court last week to funneling illegal campaign cash to Mr. Gray's 2010 campaign.
On Jan. 31, 2008, the Obama campaign received a $2,000 donation from Harris. That same day, the campaign collected $2,300 contributions from Audrey L. Albert, another donor whose name appeared on a subpoena sent to D.C. elected officials earlier this year, as well as from donors identifying themselves as employees of an accounting firm Mr. Thompson founded and an affiliated firm.
The same questions facing Mr. Obama about what to do with donations tied to Mr. Thompson just as well could be facing dozens of D.C. and federal campaigns — Democratic and Republican alike.
In fact, Mr. Thompson and his associates gave significantly more money to Mr. Obama's chief competitor in the 2008 Democratic primary, then-Sen. Hillary Rodham Clinton.
The network of Thompson-affiliated donors spans from local school board candidates to White House campaigns for both parties. And Mr. Thompson, though largely giving to Democrats locally where that party dominates politics, also gave $25,000 to the National Republican Congressional Committee in 2004, according to data from the nonpartisan Center for Responsive Politics. Mr. Thompson also donated to the campaign of President George W. Bush.
Election law violations
Since the raid on Mr. Thompson's home and office, most of the scrutiny of his fundraising activities has focused on Mr. Gray and local D.C. campaigns, as several D.C. Council members received subpoenas seeking details about donations from Mr. Thompson, Harris and others.
But after Harris' guilty plea, U.S. Attorney Ronald C. Machen Jr. noted for the first time publicly that the "conspiracy" that has entangled the Gray campaign also funneled tens of thousands of dollars of illegal campaign cash to both local and federal campaigns.
"Since 2001, this scheme has violated federal and local election law by using straw donors, many of them employees, friends and family members of the conspirators, to make high-dollar campaign contributions that would then be reimbursed with personal and corporate money from the conspiracy," he said.
When faced with the possibility a campaign has accepted dirty money, or legitimate money from a toxic donor, the candidate has three possible courses of action, if he or she chooses to act at all: transfer the money to the Treasury Department, donate it to a tax-exempt charity or return it to the donor.
Campaign finance specialist Michael Toner, former chairman of the Federal Election Commission, said campaigns "can't claim willful blindness" and keep donations they didn't know were problematic when they accepted them but then keep the money when evidence surfaces that the funds could be illegal. Mr. Toner said campaigns have a duty to be diligent and return unlawful contributions.
Ms. McGehee said the natural instinct for most campaign operatives is to wait and see how damaging the connection to the toxic donor could be.
"Just like rotten apples on a tree, some of them are going to fall off," she said. "It's symptomatic of a sick system."
• Andrea Noble contributed to this report.
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