On the day before the D.C. financial control board returned city finances to local officials more than a decade ago, it approved a preliminary $1.8 million, no-bid deal with a company run by health care contractor Jeffrey E. Thompson to open a 24/7 health clinic for low-income residents of Southeast.
But Mr. Thompson’s company never converted the clinic to operate around the clock, as the high, locked iron gate keeping people off the property late at night made clear. And the D.C. government, under the administration of Mayor Anthony A. Williams, didn’t seem to mind, either.
City officials didn’t seek return of any money for the promised 24-hour clinic until years later amid unwanted publicity brought on when the contract was disclosed through an open-records request by The Washington Times.
For Mr. Thompson, the situation proved only a minor setback. Over the next decade, hundreds of millions of dollars would continue to flow from the city treasury to Mr. Thompson’s health plan and to a D.C.-based accounting firm he founded.
While a recent federal raid on his office has put Mr. Thompson’s ties to current city politicians under close scrutiny as federal agents scour his fundraising activities, records show the foundations for his political and business fortunes were paved during the Williams administration.
Mr. Thompson, for example, bought D.C. Chartered Health Plan out of bankruptcy for $4 million in 2000. Near the end of Mr. Williams‘ administration seven years later, thanks to lucrative managed-care contracts with the city, the health plan was paying millions of dollars in cash dividends to a holding company wholly owned by Mr. Thompson.
Mr. Williams, who recently was named executive director of the Federal City Council, an influential business group, did not respond to messages seeking comment. Mr. Thompson’s attorney has declined to comment, citing a policy of not discussing clients in the media.
In 2003, D.C. Inspector General Charles C. Maddox issued a scathing report highlighting corruption in the city’s election and campaign finance offices. He uncovered schemes by officials to get illegal pay raises, hide damaging information about lawmakers’ fundraising, and hire a woman as a chief technology officer who had lied about having a computer science degree.
Though not widely publicized at the time, the report also uncovered the illegal bundling of a handful of campaign contributions by Mr. Thompson’s health care company, D.C. Healthcare Systems, and its affiliates.
Under D.C. law, a parent company and its subsidiaries are limited to a single contribution limit, but Mr. Maddox’s report showed how D.C. Healthcare Systems and two of its affiliates each gave maximum contributions to a D.C. Council member, Carol Schwartz, at-large Republican. Together, the donations easily exceeded a single contribution limit.
It was just one example of what Mr. Maddox’s office concluded were failures or selective enforcement by the city’s Office of Campaign Finance, though federal prosecutors turned down the case for criminal charges. After the report, however, city politicians did little to halt the illegal bundling. Instead, they continued to accept thousands of dollars from Mr. Thompson’s health care holdings, with donations fitting the same pattern deemed so problematic by Mr. Maddox.
“It was pretty obvious we were doing our job,” Mr. Maddox said in a recent interview. “The report speaks for itself.”
On Sept. 3, 2002, while Mr. Williams was running for re-election, his campaign received more than $15,000 from donors whose patterns of giving over the years suggest their participation in Mr. Thompson’s powerful fundraising network, campaign records show.