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Former D.C. Council chairman pleads guilty to bank fraud
Former D.C. Council Chairman Kwame R. Brown softly uttered the word "guilty" in separate courthouses Friday and tearfully apologized to the District for committing bank fraud and authorizing unlawful campaign payments — admissions that contrasted with his defiant reminder that he never stole public funds.
Brown entered the federal courthouse in the morning to admit to his scheme to secure a hefty loan between 2005 and 2007 by overstating his income, going so far as to change a "3" to an "8" on a tax form so it looked as if he earned $50,000 more in 2006 than he actually did.
His plea before U.S District Judge Richard J. Leon was the first part of an unusual double-header of court appearances for the city leader who resigned in disgrace on Wednesday after months of suspicion about payments from his 2008 re-election campaign. He faces up to six months in jail on each charge when he is sentenced in both courts on Sept. 20.
His attorney, Frederick Cooke, said Brown would be leaving the area until June 17 to avoid publicity.
Brown walked a fine line on Friday between contrition for the crimes he committed and a strong defense against any accusations that he used his position to swindle the public.
"I love this city," Brown said, before choking up with emotion. "Working for the residents has been an honor. … But six years ago, I made some very serious mistakes in judgment and I have taken full and sole responsibility for those mistakes."
Brown noted that for nearly two years, he had to face allegations that he furtively passed $239,000 in campaign funds to a firm controlled by his brother, Che Brown, during his 2008 campaign for re-election as at-large member of the council
"The facts are the government has not charged me [with]misspending, stealing or improperly using campaign funds," he said, adding later, "I have not stolen or even improperly used any public money."
Later in the day, U.S Attorney Ronald C. Machen Jr. and FBI officials provided a more damning portrait of the former council leader, whose fall from grace followed former council member Harry Thomas Jr.'s resignation and guilty plea in January for stealing more than $350,000 in public funds.
"The sense of entitlement by these individuals has to stop," said Ronald T. Hosko, special agent in charge of the FBI Washington Field Office. "They are not entitled to that which does not belong to them."
During the Thomas affair, Mr. Hosko said he "watched with amazement as Kwame Brown sat on one of the TV stations and pontificated about corruption allegations that have been swirling in the District. He did so, knowing fully that the sword of justice was dangling precariously over his head."
Brown told reporters he was only guilty of his loan transgressions and knowing that individuals received excessive cash payments for doing campaign work, "which is and has been done in this city for years."
"I believe I am the only one, only candidate, that has ever been charged with a misdemeanor," he said.
Outside the D.C. courthouse, his attorney declined to speculate on why Brown had decided to point out he is the first to face penalties for the practice.
Mr. Machen said Brown was not targeted because of his office and rejected any suggestion that race played a part in their investigations.
"We're being very inclusive," said Mr. Machen, who is black. "This doesn't have any color.
Under the plea deal, Brown's resignation was required, according to the top prosecutor.
Brown's fraud and authorization of multiple unlawful campaign expenses showed "we simply could not allow him to remain in his position, a position in which he yielded tremendous influence over a city budget in the billions of dollars," Mr. Machen said.
Brown's felony charge became public on Wednesday and prompted his resignation as chairman after 7 1/2 years of service at city hall. His conviction likely prohibits him from ever again serving as a politician at the John A. Wilson Building, so long as voters approve a measure included in a sweeping ethics bill last year that precludes felons from elected office.
After he addressed reporters outside the federal courthouse on Friday, Brown entered the D.C Superior Court building across the street to stand before Judge Juliet McKenna. In yet another filled courtroom, he admitted that his 2008 re-election campaign had opened a "side account" without disclosing it to the city's Office of Campaign Finance.
The account was initially funded by a transfer of $60,000 from the campaign's primary account, and Brown authorized a relative to make cash withdrawals for campaign expenses in excess of $50 — a process that flouts city campaign finance laws.
Brown pleaded guilty to a misdemeanor count of making an unlawful cash campaign expenditure.
On the federal charge, prosecutors said Brown misstated his income on a home equity loan to borrow $184,000 by claiming he was the vice president for strategy at a company that did not really exist. He said he earned $3,000 per month and was in line for a $10,000 raise, a statement of offense said.
Prosecutors said he forged a college friend's name as his "employer."
By affirming he had "substantially more money than he did," Brown increased his credit and obtained a loan in October 2005 for $166,000, Assistant U.S. Attorney David Johnson said.
In 2007, Brown sought a $56,000 loan to buy a boat, court papers said.
Prosecutors said Brown changed a tax form he submitted to the bank so it looked as if he earned $85,000 as a consultant for a St. Louis firm, when he actually earned $35,000. He obtained a loan of $55,335 and purchased his boat, "Bullet Proof," court papers said.
Brown pleaded guilty to only one count of fraud, despite the pair of accusations in court papers. During the 2010 campaign, Brown faced questions about his mounting debts and lawsuits from credit card companies.
Court exhibits in one of the credit-card lawsuits included a Visa application he filed 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.
Asked about whether prosecutors were aware of other cases in which Brown had embellished his income or assets, Mr. Machen said, "Often times there's a back and forth in discussions about what someone's going to plead guilty to. We obviously cited two different instances, but other than that we won't comment."
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About the Author
Tom Howell Jr. covers politics for The Washington Times. He can be reached at firstname.lastname@example.org.
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