D.C. Council Chairman Kwame R. Brown resigned Wednesday after federal prosecutors accused him of lying on a loan application — a historic blow to a city government that has suffered unprecedented legal woes and eroded the public's trust.
Documents filed Wednesday in federal court charged Mr. Brown with one count of felony bank fraud.
The charge should bring closure to one of three federal probes that have plagued city hall for more than a year, even as it puts a serious wrinkle into the future of the D.C. Council.
Mr. Brown, a Democrat, has faced questions about his 2008 campaign for re-election as an at-large member since April of last year, when an audit from the Office of Campaign Finance noted that the campaign appeared to pass nearly $240,000 to a firm controlled by his brother, Che Brown.
Ultimately, prosecutors focused on his personal finances. It was a distinction that Mr. Brown discreetly alluded to in the days leading up to the charges, walling off his misdeeds in private life from his public service as an elected official.
Court papers say Mr. Brown falsified documents in 2005 by inflating his income in order to obtain a home-equity loan and money to purchase his boat, "Bullet Proof."
Mr. Brown overstated his income as an at-large member of the council by "tens of thousands of dollars" on the home-equity loan he filed with Industrial Bank in September 2005, according to the papers.
The filing of a criminal information typically signals that a plea agreement is in the works. Mr. Brown is scheduled to appear before U.S. District Judge Richard J. Leon at the federal courthouse Friday morning for a plea-agreement hearing.
Mr. Brown submitted his resignation letter to council Secretary Nyasha Smith late Wednesday afternoon. In it, he apologized to city residents and to members of the council "for all of the negative attention that my conduct has brought about."
"I have behaved in ways that I should not have," he said. "I was wrong, and I will face the consequences of that conduct."
He had emerged from his office Wednesday afternoon flanked by staff members and declined to comment about his future. He promised to make a statement Thursday, as a scrum of media cameras jostled with staff who tried to protect the chairman and usher him alongside security officers to the fifth-floor elevators at the John A. Wilson Building.
Word of his impending resignation took lawmakers at city hall by surprise.
"I'm shocked by the news. I am disappointed and saddened," Mayor Vincent C. Gray said before the resignation was announced.
Mr. Gray noted that he was elected to the Ward 7 seat on the council in 2004, the same year that Mr. Brown became an at-large member. "I served with him my entire time on the council. Never would I have imagined something like this would occur," he said.
Council member Mary M. Cheh, Ward 3 Democrat, will lead the body until the members gather next Wednesday to appoint one of the four at-large members as interim chairman ahead of a special election to permanently replace Mr. Brown.
For more than a year, Ronald C. Machen Jr., the U.S. attorney for the District, has been looking into activities by Mr. Gray's 2010 campaign team and suspicions surrounding Mr. Brown and former council member Harry Thomas Jr.
Mr. Thomas resigned from the Ward 5 seat in January and received a 38-month prison term for stealing more than $350,000 in public funds.
He was the first sitting council member to be convicted of a felony since the District obtained home rule in 1973.
Members of Mr. Gray's 2010 campaign team recently pleaded guilty to covering up furtive payments to a minor mayoral candidate with the hope he would continue verbal attacks on incumbent Mayor Adrian M. Fenty during the primary campaign. Mr. Gray has not been accused of wrongdoing, although the investigation is ongoing.
Turmoil at city hall prompted the council to pass a comprehensive ethics reform bill at the end of 2011, including a provision for the expulsion of any council member convicted of a felony. However, D.C. voters must approve the provision as a change to the city's Home Rule Charter.
Mr. Brown served as an at-large member of the council from 2005 through 2010 before succeeding Mr. Gray as the council's chairman.
Mr. Brown swept onto the council by defeating incumbent Harold Brazil in 2004, part of a movement of new blood on the local political scene. He received a boost from his well-known father, Marshall Brown, a veteran of the civil rights movement who remained active in city politics.
After his re-election in 2008, Mr. Brown rose to chairman in 2010 in an election campaign that laid bare his steep personal debts and creditors' legal efforts to seek payment.
A series of lawsuits filed by creditors painted a picture of a man living beyond his means and drowning in credit card debt, even as he sought to cut a public figure as a fiscal reformer who could bring needed discipline to the District's budgeting process.
Among the court exhibits in one of the credit-card lawsuits against Mr. Brown is a copy of a Visa application he filled in 2006, in which he reported the value of his home as "850K," when city tax records show the Hillcrest property isn't worth half that much — or even today with property values across the District on average higher than six years ago.
As chairman, Mr. Brown garnered praise for his leadership on issues such as education reform and the recent passage of the fiscal 2013 budget.
But his term was fraught with trouble from the start.
He returned a pair of taxpayer-financed Lincoln Navigators leased by the District after news reports revealed he had requested the "fully loaded" vehicles and had to send one back because it did not have the correct interior color. The episode was held up as an example of wanton government waste.
Gathering storm clouds
Moments after he shepherded the council to passage of a $9.4 billion operating budget, Mr. Brown said Tuesday he had no plans to resign and did not think he broke any laws during the 2008 campaign.
But by Wednesday afternoon, the door to Mr. Brown's expansive office suite remained locked as staff walked in and out of the hallways and refused to speak about reports that their boss was about to be criminally charged. Mr. Brown's deputy chief of staff said through the door they were engaged in a "staff meeting" and had no comment.
The flurry of media attention outside his offices caused mounting tension and even prompted an officer in charge of city hall security to request that reporters no longer attempt to gain entry to Mr. Brown's office.
Intrigue mounted throughout the day, as Ms. Cheh returned from the funeral of a Marine and reported directly to the chairman's offices.
Mr. Brown's attorney, Frederick Cooke, also entered the office, although a deliveryman had been directed to a room across the hall and a constituent seeking to enter the office had been turned away.
Earlier in the day, a casually dressed Mr. Brown appeared to be in good spirits and told a reporter from The Washington Times in the hallway that he was ready for a normal workday.
'The future of this government'
Mr. Brown and Mr. Cooke met with council members in closed session shortly after 3 p.m. to discuss the chairman's future.
Council member Tommy Wells, Ward 6 Democrat, emerged from the meeting and said that Mr. Brown was "very businesslike and very heavy-hearted," but the discussion was a "very frank and honest conversation."
He declined to confirm publicly that Mr. Brown had resigned as chairman, adding he would like to give him the "courtesy" to speak for himself.
"I'm just, again, very sad for the District of Columbia and [have] a very heavy heart," Mr. Wells said. "But I know the most important thing is to assure everyone that our city is going to be able to move forward."
Heading into the meeting, council member Jim Graham, Ward 1 Democrat, called the expected transition "an opportunity for real change."
"I'm quite concerned about the future of this government," he said.
Employees at city hall said council member Phil Mendelson, at-large Democrat, was the likely favorite to become the interim chairman while Vincent B. Orange, at-large Democrat, also was expected to make a push for the seat.
Mr. Brown defeated Mr. Orange, who could not be reached for comment on Wednesday, in the 2010 race for chairman.
The other at-large members, David A. Catania and Michael A. Brown — both independents — are not expected to seek the role, persons familiar with their thinking said.
• Jim McElhatton contributed to this report.
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