- The Washington Times - Sunday, March 25, 2012

More than a quarter-million dollars from a legal settlement between D.C. contractor and prolific political fundraiser Jeffrey E. Thompson and the D.C. government went to a favorite charity of Mr. Thompson’s that also is a prominent client of his accounting firm, records show.

The money paid out to the D.C.-based National Council of Negro Women Inc. stems from an agreement disclosed in regulatory filings by Mr. Thompson’s insurance plan, D.C. Chartered Health Plan, which is the city’s biggest Medicaid contractor. The health plan’s parent company, owned by Mr. Thompson, agreed in 2008 to pay $13.3 million to resolve a dispute with the District over billing practices.

The filings show that in addition to the settlement deal, Mr. Thompson, his health plan and its parent company entered into a letter agreement to pay more than $1 million per year toward the District’s immunization program, school system and what documents describe as several other not-for-profit organizations.

The Washington Times has obtained a list of the not-for-profit recipients during a two-year span that shows much of the cash went to the National Council of Negro Women, which Mr. Thompson has long supported. The council also is a client of his accounting firm, Thompson, Cobb, Bazilio & Associates. The firm has prepared the organization’s Internal Revenue Service returns and audited the group.

While there are no indications that the money was mishandled, the substantial payout to an organization with ties to Mr. Thompson’s firm raises questions about why the District left it to Mr. Thompson and his businesses to decide where and how much money would go to various D.C. nonprofit organizations pursuant to a legal settlement.

Ted Gest, a spokesman for the D.C. Office of the Attorney General, said Mr. Thompson has complied with all terms of the legal settlement. He declined to comment on the payments or on the method used to select nonprofit groups for funding.

Under the settlement, there was no requirement regarding the amounts paid out to each nonprofit group or which organizations received money, The Times has learned.

An attorney for Mr. Thompson declined to comment, and phone calls in recent weeks to the National Council of Negro Women were not returned.

It’s unclear how much, if anything, Mr. Thompson’s firm receives from its work for the organization. But Mr. Thompson’s firm has made prominent mention of the engagement in marketing materials.

A statement of capabilities posted on the accounting firm’s website, for instance, mentions the council at least six times while noting that it has conducted the council’s annual financial and compliance audit since 1985. In addition, the council’s statement to the Internal Revenue Service shows that Thompson, Cobb, Bazilio & Associates for years has prepared its annual financial statement to the IRS.

Under the legal settlement, the funds paid by Mr. Thompson or his businesses were to be used for community services or events to educate D.C. residents about health care issues, such as HIV/AIDS and asthma.

On the council’s website, D.C. Chartered Health Plan is listed as a sponsor of the council’s annual Black Family Reunion event.

In 2009 and 2010, the overall nonprofit payments totaled $702,000 for the two years, with the National Council of Negro Women receiving a little more than $290,000 combined. The next highest recipient was listed as Anacostia Community Fitness, which included $213,000 in funding for fitness and holistic wellness programs in Wards 6, 7 and 8, records show.

By comparison, the Whitman-Walker Clinic, which specializes is HIV/AIDS treatment and prevention, received $25,000 in 2009 and was not among the more than a dozen 2010 recipients listed in city records.

Other 2009 recipients included the Children’s Hospital Foundation, $15,000; the D.C. Chamber of Commerce, $20,000; the Howard University College of Medicine, $15,000; and the Providence Hospital Foundation, $15,000.

In 2010, the Duke Ellington School of the Arts received $50,000 while other groups, such as the D.C. Primary Care Association and Mary’s Center, received smaller payments ranging from $500 to $15,000, records show.

Under the agreement, which is outlined in reports filed by D.C. Chartered Health Plan to city insurance regulators, the payouts are subject to several conditions, including the insurance plan and its parent company, Thompson-owned D.C. Healthcare Systems, being able to maintain normal operations.

The disclosure also says that if the District fails to use the funds as required, if the D.C. government is unable to account for related expenditures, or if Chartered or its Thompson-owned parent company suffers adverse financial circumstances, the commitments become void or are subject to being renegotiated.

While D.C. Chartered Health Plan is the city’s biggest Medicaid contractor, holding a contract worth hundreds of millions of dollars per year, it’s unclear whether an ongoing federal campaign finance investigation into Mr. Thompson’s fundraising activities for city politicians will affect the company’s ability to win city contracts.

• Jim McElhatton can be reached at jmcelhatton@washingtontimes.com.

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