The federal prosecutor for the District will investigate Kwame R. Brown’s re-election committee for suspected criminal violations of campaign finance law after city elections officials Thursday substantiated findings of widespread irregularities during the D.C. Council chairman’s 2008 re-election race.
“It means we think there’s criminal activity here that needs to be looked into,” D.C. Board of Elections and Ethics Chairman Togo D. West Jr. said in a blunt assessment of the board’s decision to refer the case to the U.S. attorney’s office for the District.
The board’s conclusions were based on an audit performed by the Office of Campaign Finance that said Mr. Brown’s re-election committee didn’t report more than $100,000 in contributions and failed to report or substantiate hundreds of thousands of dollars more in expenditures, among other financial irregularities.
It makes Mr. Brown, a Democrat, the latest D.C. official to fall within the U.S. attorney’s sights in a series of ethics scandals that have shaken the faith of voters and forced city officials to police one another through hearings and legislation.
The U.S. attorney called a grand jury to hear allegations that Mayor Vincent C. Gray and campaign aides paid a minor mayoral candidate and promised him a job to bash incumbent Mayor Adrian M. Fenty before the Democratic primary last year. Mr. Gray repeatedly has denied the claims.
The accusations prompted 26 hours of testimony from 19 witnesses during several public hearings before the council’s Committee on Government Operations and the Environment. The committee is expected to produce a report by this fall with suggestions on how to “tighten up” hiring in the excepted services, or political appointees who serve at the will of the mayor.
The District’s federal prosecutor also is looking at allegations that council member Harry Thomas Jr., Ward 5 Democrat, redirected more than $300,000 earmarked for youth baseball to his personal accounts. He faces a $1 million lawsuit from the D.C. attorney general and has lost his committee chairmanship pending the outcome of the civil case.
Mr. West, a former secretary of the Army who also headed the Department of Veterans Affairs during the Clinton administration, said on behalf of the elections board that additional “foot soldiers” at the campaign finance office could cure some ethical shortcomings in the city.
“If you wanted to do something to improve ethics policing in this city, you’d put more auditors in there,” he said of the campaign finance office. “That’s the way you find out what’s going on and that’s what will prove to be the crucial evidence in this matter.”
Mr. Brown’s attorney, Frederick D. Cooke Jr., requested that the board put Thursday’s case on an “express train” route to the U.S. attorney’s office — a move that would hold up all elections board proceedings and prevent the board from issuing any conclusions about whether violations occurred until the federal prosecutor could decide whether to take criminal action.
“Let’s just cut to the chase,” Mr. Cooke said.
The board deliberated in private and decided to refer the matter to the federal prosecutor, after it allowed Mr. Cooke to waive his right to present evidence.
The elections board rejected Mr. Cooke’s fast-track request, also accepting the merits of a complaint filed against Mr. Brown by the campaign finance office through a finding of “apparent violations.”
In effect, the results of the hearing delay the imposition of any fines, which could have occurred Thursday.
Nevertheless, the referral “is considered the bigger of the sanctions,” Mr. West said.
Mr. West said his board “can’t put deadlines on the U.S. attorney,” but he pledged to revisit the issue for final proceedings and appropriate civil penalties once the federal prosecutor has spoken.
The Office of Campaign Finance’s attorney, William SanFord, said officials from the U.S. attorney’s office already have begun looking into the matter and have requested and obtained various records from D.C. campaign finance offices that pertain to Mr. Brown.
Mr. Cooke declined to say whether federal agents had contacted him.
Mr. Brown was not present at the hearing in city offices on Judiciary Square. He had scheduled simultaneous budget talks at the John A. Wilson Building with his council colleagues.
In a statement released before the election board’s decision, Mr. Brown said he welcomes the federal investigation.
“The committee is confident that an investigation by the Office of the United States Attorney will be thorough,” Mr. Brown said. “The committee is equally confident that such an investigation will not find any criminal wrongdoing by the committee, or those acting on behalf of the committee.”
Later in the day, Mr. Brown fielded few in-person questions before leaving the hearing.
“We’re just looking forward to moving forward and getting some closure to it,” Mr. Brown said as he left the chamber.
The complaint filed by the Office of Campaign Finance in early June upheld findings contained in an audit released in April of the committee that ran Mr. Brown’s re-election campaign to an at-large council seat before he became council chairman.
The complaint charged Mr. Brown’s committee with, among other things, failure to report 210 contributions totaling $102,763, failure to report 53 expenditures totaling $169,431.49, failure to amend its Statement of Organization to include a bank account and identify a signatory, and failure to substantiate $174,785.57 in expenditures, “all of which are in violation of the D.C. Campaign Finance Reform and Conflict of Interest Act,” campaign finance officials said.
The audit was issued after a six-month probe that delved deeply into the campaign’s record-keeping and expenditures, including payments to consultants such as Mr. Brown’s brother, Che Brown, who has worked on all of Kwame Brown’s election campaigns, and Che Brown’s business, Partners in Learning, a motivational and business-coaching firm.
The audit revealed that the committee spent $379,654 — or 46 percent of its total expenditures from August 2007 through March 2008 — on a company called Banner Consulting, which was retained to manage field operations for the campaign. Invoices provided by the committee, though, did not match services rendered by Banner.
Of the money paid by the committee to Banner, $239,663 was then paid or transferred from Banner to Che Brown’s firm, which had reached a subcontracting agreement with Banner.
Partners in Learning netted more than $25,800 less than the agreement, according to a profit-and-loss statement submitted by the company.