- The Washington Times - Thursday, March 22, 2012

A serious turn in the federal probe of D.C. Mayor Vincent C. Gray’s 2010 campaign and a recent trickle of subpoenas to D.C. Council members is delving into the tricky - and supposedly arms-length - role that candidates play at the roulette wheel of political funding and influence.

While council members’ campaign teams scour their records, Mr. Gray faces new scrutiny over the existence of a “shadow campaign” - and, if one did exist, the extent to which he knew about it.

“They say ignorance is generally not an excuse for violating the law, except when it comes to campaign finance,” said Meredith McGehee, policy director for the Campaign Legal Center in Northeast. “The problem for the candidate is, it can hurt you politically, but often the candidates are the last ones to go.”

The Washington Post on Thursday reported the existence of a parallel, off-the-books effort on the part of the Gray campaign to get out the 2010 vote, largely east of the Anacostia River. The report, based on campaign sources, suggested the effort was orchestrated by Vernon Hawkins, a longtime campaign consultant who was ousted as the director of the Department Human Services during the administration of former Mayor Marion Barry.

Mr. Gray’s spokesman, Pedro Ribeiro, declined to speak in detail about the investigation on Thursday, but described Mr. Hawkins as a “super-volunteer” who hung around and had no official role in the campaign.

“You get that in all campaigns,” he said.

Campaign-finance filings show small payments to Mr. Hawkins during Mr. Gray’s initial run to secure the Ward 7 seat on the council in 2004, and then a smattering of petty cash payments and $17,500 in consulting fees during Mr. Gray’s run for council chairman in 2006. No expenditures to Mr. Hawkins are listed in Mr. Gray’s 2010 filings.

While firm details about the Gray investigation are scant, federal prosecutors’ look at the council is a bit clearer. Investigators showed interest in donations from prolific contributor Jeffrey E. Thompson, his companies and his associates by sending specific records requests to the campaigns of at least six council members. Mr. Thompson is an accomplished accountant who holds a $300 million managed-care contract with the District through his D.C. Chartered Health Plan and has donated to almost all of the District’s sitting politicians.

“It means they turned up something. They kind of have to have that first little indication.” Ms. McGehee said of the subpoenas. “Everyone could kind of apologize and give the money back, but it’s really up to a prosecutor to say, ‘Well, we want to look at this.’ “

Mr. Gray’s campaign has not received a subpoena, but the request might not be necessary because federal authorities have been reviewing his campaign since last year and may have already looked at records related to Mr. Thompson’s contributions.

The key question is whether a pattern of contributions from Mr. Thompson and his affiliates walked the fine line of legitimate donations among affiliated persons or if contributors attached their names to checks and money orders they never bought, signed or even touched.

The D.C. contributions under scrutiny could fall under the common practice of “bundling,” in which a fundraiser gathers contributions from contacts and presents them to the candidate. The practice, while legal, allows corporate donors to use affiliated companies to donate repeatedly and can bring in donations from far-flung jurisdictions with few ties to the candidate.

“Bundling itself isn’t the problem,” said Craig Engle, a campaign-finance expert at the Arent Fox LLP law firm in Northwest. “It’s when you don’t bundle, yet still show up with a bunch of checks - now that’s the problem.”

What Mr. Engle alluded to is a process involving “straw donors,” in which people allow someone else to make donations in their names through fraudulent checks or money orders, or accept a reimbursement for payments they have made to a political campaign.

“Giving in someone else’s name is technically a crime, but it’s been happening forever,” said Clyde Wilcox, a professor of government at Georgetown University. He added it is more common on the federal level than on the state or local level.

Mr. Wilcox, who commented generally and not specifically to the situation unfolding in the District, said he has seen contributors use reciprocity deals - one donor gives to a politician in an affiliated donor’s city, and the favor is returned - to build a network for bundling.

“They say you start with the people who can’t say no to you, then move to people who just like to be part of the action,” Mr. Wilcox said. “It skirts the intention of the law, but it’s not illegal.”

Despite the hubbub, it is unclear if anyone involved in the investigation into Mr. Thompson’s campaign activities has done anything illegal or if any wrongdoing could climb the campaign hierarchy to besmirch a sitting politician.

Mr. Engle said that to charge a candidate or officeholder, a prosecutor would have to prove intent - “that the candidate knew the acts that were going on, knew those acts were illegal, yet knowingly participated in them and intended to benefit from them.”

Either way, it is rare to see “such an across-the-board investigation” among a body of lawmakers as is occurring in the District, he said.

“Maybe in Dashiell Hammett novels, but not here today,” he said, referring to the popular mystery writer from the early 1900s.

Some lawmakers in the District were quick to note that their campaign treasurers received the subpoenas, distancing themselves from the legal matter.

When New York City Comptroller John Liu found himself embroiled last month in allegations of using straw donors, it was his 25-year-old treasurer who was arrested.

Mr. Wilcox said the candidate can usually rely on “plausible deniability” to avoid criminal liability for activities during their campaign. It is the treasurers and bundlers who face the heat, because they were the ones angling for the plaudits and spoils that come with raising big bucks.

But D.C. Council member Jack Evans, Ward 2 Democrat and the first member to acknowledge his campaign’s receipt of a subpoena, said it is wrong for any official to push blame onto his or her campaign team.

“It’s the Harry Truman thing, right? ‘The buck stops here,’ ” Mr. Evans said. “At the end of the day, the ultimate person responsible is the candidate.”

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