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VI. NARRATIVE OF THE EVENTS

V. CLARENCE A. VINSON RECEPTION

A. BACKGROUND

1. Overview

During the 2000 Summer Olympics in Sydney, Australia, Clarence A. VINSON, a bantamweight boxer from the District of Columbia, won a bronze medal for the United States. To celebrate this accomplishment by a Washington, D.C. native, the Executive Office of the Mayor (EOM) hosted a reception for VINSON on November 29, 2000, at the MCI Center's National Sports Gallery.

The idea to host a reception for VINSON first arose prior to VINSON's participation in the 2000 Olympic games. EOM employees initially considered finding sponsors for VINSON because members of VINSON's family were financially unable to travel to Australia and watch him compete. (Ex. VIN 1) At this time, the EOM also entertained the idea of hosting a "citywide send off' for VINSON to allow Mayor Anthony A. Williams and the event's sponsors to meet VINSON's family. Id.

According to VINSON, representatives from the EOM agreed to pay for his family's airplane tickets to Australia. However, VINSON's family never received these tickets and EOM representatives were very apologetic upon his return home. VINSON stated that the EOM then offered to give him a reception to celebrate his victory. Joy A. ARNOLD, then Confidential Assistant to the Mayor, related that Mayor WILLIAMS informed her that he wanted to do something for VINSON because he was a District of Columbia native and had won a bronze medal in the 2000 Summer Olympics. According to an October 23, 2000, e-mail from ARNOLD to other EOM members, Dr. Abdusalam OMER, the Mayor's then Chief of Staff, asked ARNOLD to form a committee to plan the VINSON event. (Ex. VIN 2) ARNOLD became the point-person for the event and a committee was formed composed of the following EOM employees: ARNOLD, Lawrence HEMPHILL (Director, Office of the Public Advocate), Thomas TUCKER (Special Assistant for External Relations), Gwendolyn KING, Lamont MITCHELL, and Mark JONES (Deputy Chief of Staff). At that time, the target date for the event was November 29th - the day before the White House would honor all the Olympians. Id.

JONES stated that he received a call from Mayor Anthony A. WILLIAMS while the Mayor was at the Olympics, and that the Mayor was "upset" that there was no event to honor VINSON's achievement. (JONES Tr. at 203) JONES said the Mayor told him to "figure something out," so he contacted Rock NEWMAN who agreed to assist. Id. However, according to JONES, the Mayor then assigned the VINSON event to someone else. Id.

The committee held a meeting at the EOM on October 26, 2000, to plan for the event.^VI-a (Ex. VIN 3) The committee identified three sponsors for the event: the District of Columbia Sports and Entertainment Commission (Sports Commission); the Boxing Commission; and the MCI Center. Id. Although other individuals were tasked with initiating contacts with the sponsors, JONES was assigned to coordinate the "overall sponsorship" for the event. Id. The committee considered hosting the event at 441 4th Street, N.W., although preferred venues were the MCI Center, the Sumner School, and the Marriott at Metro Center. Id.

The proposed guest list included VINSON's family and friends, city officials, as well as local sports officials and athletes. (Ex. VIN 3) The committee also considered presenting VINSON with various gifts at the event, such as gift certificates from local restaurants, hotels, and businesses, autographed sports memorabilia, enlarged pictures of VINSON, and a commemorative plaque.^VI-b Id. The committee decided that TUCKER would design the invitation for the reception. Id. Because VINSON's relatives were scheduled to be in the Washington area around November 17th to attend his induction .into the Boxing Hall of Fame, the date of the event was moved up to November 17th from November 29th. Id.

ARNOLD then contacted Abe POLLIN's office to secure the National Sports Gallery at the MCI Center for the VINSON reception. POLLIN's office agreed to allow the EOM to use the facilities free-of-charge. However, the EOM needed to identify funds for the costs associated with the catering and the entertainment for the event as well as other miscellaneous costs (e.g., photographs). On November 27, 2000, ARNOLD signed an agreement with Levy Restaurants, the MCI caterer, for $9,523.80. (Ex. VIN 4)

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2. Donors

To raise funds to pay for the event, the EOM solicited contributions from the Sports Commission and from the Baltimore Washington Regional 2012 Coalition (2012 Coalition). The Sports Commission, 2400 East Capitol Street, S.E., Washington, D.C., is an independent District government entity. The Commission was established as a corporate body to, inter alia, promote and market sporting events in the District and enhance the District's economy by attracting major sporting events to District arenas and stadiums. D.C. Code §e 2-4003 (Supp. 1999).

The 2012 Coalition is a 501(c)(3) charitable organization, incorporated in the state of Maryland.^VI-c According to the organization's Information Booklet (Ex. VIN 5), its mission is "[t]o enrich the lives of the people in our region, by capturing the spirit of the Olympic Games and successfully hosting the 2012 Olympic Games." Id. at 4. At the time of the booklet's publication, the 2012 Coalition had a fifty-four member Board of Directors and an Executive Committee composed of sixteen individuals. Id. at 1. The Board and Committee are comprised of business, government, and civic leaders as well as local athletes, Olympians and other sports figures. Id. Board appointments have been made by the Mayors of Washington and Baltimore and the Governors of Maryland and Virginia. Id. Notable board members include the Honorable Kathleen Kennedy Townsend, Cal Ripken, Jr., and Kurt Schmoke. Id. at 11. Members of large corporations are also represented on the board, such as the Bank of America, Arthur Andersen, LLP, Verizon, Comcast Cable, and Marriott International, Inc. Id. The former vice president and general counsel for the Sports Commission, Marianne Niles, was appointed to the board by former Mayor Marion BARRY on August 18, 1998.

The 2012 Coalition's ties to the District are related to the area's 2012 bid proposal for the 2012 Olympic Games. The 2012 Coalition is also involved with My Sister's House in the District and the annual Black History Swim Meet.

An excerpt from a 2012 Coalition brochure reflects the membership levels and associated costs (donations). (See Ex. VIN 6) The brochure also reflects that contributions are tax-deductible. Id. The Internal Revenue Service recognized the 2012 Coalition as a 501(c)(3) entity in December 1998 and the organization is exempt from District taxation as well. (Ex. VIN 7)

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3. EOM's Solicitation of Funding

The EOM solicited contributions from two entities with ties to the District because of the sportsrelated nature of the event. The paper trail suggests that the donors had prior conversations with JONES and Dr. OMER, which were followed-up with written requests for donations.

Dr. OMER initiated contact with Warren GRAVES, Director of External Affairs for the Sports Commission, regarding that agency's participation as a sponsor. Dr. OMER followed-up his discussion with GRAVES via a letter, dated November 6, 2000, soliciting $25,000 from the Sports Commission to pay for all costs associated with the Vinson Reception. (Ex. VIN 8) GRAVES presented the idea to the Board of Directors at a November 16, 2000, board meeting; however, due to the lack of details provided at that time, the Board decided to seek clarification from the EOM and re-visit the matter at a later date. (Ex. VIN 9) In response, JONES sent GRAVES a second letter, dated November 22, 2000, in which JONES provided additional information about the event. (Ex. VIN 10) In this letter, JONES estimated the total budget for the event to approximate $15,000 and requested the Sports Commission to contribute $7,500 toward this amount to pay for the catering costs. Id. Attached to JONES' letter was a partial list of the 300-400 event invitees and JONES suggested that GRAVES provide the EOM with the names of any other guests that GRAVES wished to invite. Id.

Either JONES or TUCKER initiated contact with the 2012 Coalition. A November 21, 2000, letter signed by TUCKER for JONES, indicates that JONES contacted Beatrice RICE, the 2012 Coalition Manager of Administration and Assistant Director of Community Relations, and solicited financial support for the event, attaching the projected $15,000 itemized budget. (Ex. VIN 11) TUCKER also sent a letter, dated November 28, 2000, to RICE, to which he attached an invoice for the caterer and a "credit card billing" for the catering deposit. (Ex. VIN 12) In this letter, TUCKER notes that, as he and RICE previously discussed, the 2012 Coalition will contribute a total of $2,129.87 to cover certain costs associated with the event. Id.

Dan KNISE (President and CEO of the 2012 Coalition) stated that he told JONES or TUCKER that the 2012 Coalition would contribute $2,500 toward the event. KNISE further stated that he believed the 2012 Coalition's total contribution was approximately $2,100, that RICE handled the payment details, and that RICE paid the vendors directly.

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4. Event Invitees

ARNOLD stated that TUCKER handled the invitations and that the EOM sent out 150-200 invitations, mostly to friends of VINSON. The invitation for the event contains District government insignia and states "Mayor Anthony A. Williams and Diane Simmons Williams invite you to a reception honoring Clarence Vinson, 2000 U.S. Olympic Boxing Bronze Medallist." (Ex. VIN 13) Additional invitees included D.C. Delegate Eleanor Holmes Norton, District of Columbia Council members, the heads of various District agencies, select District government employees, and friends and relatives of VINSON. (Ex. VIN 14)

The EOM also invited District business leaders, religious leaders, community activists, and prominent political figures to the event. (Exs. VIN 10 and 14) The Reports of Receipts and Expenditures for the Committee to Reelect Tony Williams - the Mayor's Principal Campaign Committee for the 2002 election (Mayor's PCC) - for the period February 2000 - January 2001, indicates that of the invitees listed, many had made campaign contributions to the Mayor's PCC during the months preceding the event. (Ex. VIN 15) For example, the following individuals specified in these lists made contributions to the Mayor's 2002 campaign during May - October 2000:

• Stuart BERNSTEIN, developer, Bernstein Companies - $2,000 on June 9, 2000 

• Max BERRY, attorney - $2,000 on June 21, 2000 

• Scott BOLDEN, attorney, Reed, Smith, Shaw & McClay - $1,000 on June 22, 2000 

• Dickie CARTER, Chair, Urban Services - $2,000 on June 22, 2000 

• Vincent COHEN, attorney, Hogan & Hartson - $2,000 on June 21, 2000 

• HR CRAWFORD, President, CEMI - $1,000 on June 21, 2000 

• David FALK, Chair/CEO, FFX Entertainment - $2,000 on June 22, 2000 

• Jamie GORELICK, Vice Chair, FannieMae - $1,000 on July 13, 2000 

• Stephen D. HARLAN, Chair, Smithy & Co. - $2,000 on August 22, 2000 

• Marie JOHNS, President/CEO, Verizon - $1,000 October 30, 2000 

• Kathleen KEMPER, President, Jac, Inc.- $2,000 on June 21, 2000

• James KIMSEY, CEO, AOL - $2,000 on June 21, 2000

• Weldon LANTHAM, Attorney, Shaw Pittman - $1,000 on June 21, 2000

• Ted LEONSIS, President, Interactive Division, AOL - $2,000 on May 23, 2000

• P. Leonard MANNING, CEO/Chair, LTE - $2,000 on June 21, 2000

•  William MCSWEENY, Trustee, Kennedy Center - $1,000 on June 9, 2000

• Abe POLLIN, Chair, Washington Sports and Entertainment - $2,000 on June 22, 2000

• Franklin RAINES, Chair, Fannie Mae - $2,000 on July 13, 2000

• Roger SANT, Chair, AES Corporation - $2,000 on July 3, 2000

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5. The Event

Witnesses interviewed during this investigation stated that approximately 100 people attended the Vinson Reception on November 29, 2000. GRAVES stated that the EOM extended an open invitation to all members of the Sports Commission, and that he, as well as two other members, attended the event. GRAVES recalled that Mayor WILLIAMS was in attendance and that the Mayor presented VINSON with a key to the city. GRAVES further stated that he took the opportunity to discuss VINSON's boxing debut in D.C. with VINSON's manager at the reception. Michael A. BROWN, Vice Chairperson of the D.C. Boxing and Wrestling Commission (Boxing Commission), stated that he participated in the event by giving some closing remarks. Also, VINSON recalled that the Mayor gave a speech at the event during which he acknowledged and thanked the event's sponsors.

Among the gifts VINSON received were an autographed Wizards' basketball, a hockey stick, a banner, an enlarged photograph of VINSON signed by his friends, and a donated computer. VINSON recalled that he also received a gift certificate from a restaurant at the reception. In addition, BROWN donated a gift certificate to VINSON at the event for a pair of Timberland boots.

The Mayor and other government employees received small gifts from the 2012 Coalition. KNISE stated that the 2012 Coalition gave t-shirts and pens to JONES, Dr. OMER and the Mayor. The 2012 Coalition also gave the Mayor a wall-hanging. Witnesses confirmed that there was no indication of political activity initiated at the reception- and that the reception did not have any of the indicia of a political event.

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6. Vendor Payments

TUCKER forwarded invoices to the 2012 Coalition in November of 2000. The 2012 Coalition, in turn, paid the vendors directly. The 2012 Coalition's total contribution was $2,144.87, and the organization issued checks to the following vendors: a) MCI Center ($500.00 for catering down payment); b) Roncom Photo Inc. ($844.87 for the 2000 photos, negatives and mounting costs); and c) Kyle Baker ($800.00 for the band). (Exs. VIN 16, 17, and 18)

GRAVES stated that after the Sports Commission agreed to contribute toward the event, he did not hear from the EOM about the contribution until February 2001 when the EOM notified him that there was an outstanding catering bill from the MCI Center. GRAVES advised that the Board would only make payment to the vendor directly - not through the EOM - and that the Commission's accountant was still awaiting an invoice as of February 28, 2001. During the course of this investigation, the OIG confirmed with John CRAIG, Levy Catering Manager, that the Sports Commission paid the final invoice for the catering costs ($10,199.14). (Exs. VIN 19 and 20)

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B. ANALYSIS

At the outset, we note that the final legal determination with regard to the appropriate mechanism for funding District government events rests with the Office of the Corporation Counsel (OCC). During the preliminary stage for each event, the EOM's first step should have been to present the proposed event to the OCC for a legal review to determine whether the activity could be produced by the District government and, if so, the appropriate manner to fund and organize the desired activity. There is no indication that the EOM sought such a legal review for the Vinson Reception. Therefore, the OIG is left to base the following analysis on prior opinions issued by the OCC that address government fundraising in other (related) contexts.

Because Congress had not provided specific appropriations for funding the Vinson Reception through the D.C. Appropriations Act, 2001, the EOM had four ways to legally fund the event: 1) use money appropriated within the Ceremonial Fund; 2) use contributions made to the Constituent Services Fund; 3) use the Mayor's gift acceptance authority set forth in the Appropriations Act to solicit and accept monetary contributions; or 4) allow a non-profit to orchestrate the entire event independently of the EOM. In the Vinson Reception and other events, it is often difficult to define the authority by which the fundraising was conducted because EOM employees were seldom in full compliance with the requirements of a particular funding method. Due to the degree of control exercised by EOM employees in producing the Vinson Reception using nonappropriated funds, the EOM seems to have elected the third of these options to fund this event. Given the "ceremonial" nature of the event, the Mayor may have been authorized to solicit and accept funds for the Vinson Reception through his gift acceptance authority under the Appropriations Act.^VI-d However, the EOM failed to adhere to appropriate laws and procedures in the process.

The EOM avoided many of the public-private entanglements in producing the Vinson Reception by choosing not to use a non-profit organization as a conduit for fundraising.^VI-e Indeed, unlike other events the EOM produced, the Vinson Reception was not funded by the solicitation of donations by or through a non-profit entity; rather, the involved non-profit entity assumed the role of donor for this event, from which EOM employees directly solicited donations.

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1. The Ceremonial Fund

VINSON, an Olympic bronze medalist from the District of Columbia, arguably falls within the category of "eminent persons" contemplated by the statutory provision that allows the Mayor to host official receptions. See D.C. Code §1-355(a) (1999 Repl.). The Ceremonial Fund's $25,000 cap, however, may have dissuaded the EOM from using this source. If the EOM had funded the Vinson Reception entirely from the Ceremonial Fund, it would have depleted almost half of the fund's available appropriations since the total bill for the event approximated $12,000.

2. The Constituent Services Fund

Because the definition of "citizen-service program" is broad in scope, the Vinson Reception could have been at least partially funded from this program. While the Constituent Services Fund's more generous cap ($40,000) may have made it a more suitable source of funding for the Vinson affair, it posed one major drawback in this instance - the statute prohibits government employees from conducting fundraising activities for the Constituent Services Fund on government time. D.C. Code §1-1443(e) (1999 Repl.). Therefore, in order to raise money for the Vinson Reception through the Constituent Services Fund, EOM employees would have been required to solicit contributions from the 2012 Coalition and the Sports Commission outside of their normal duty hours. JONES' and Dr. OMER's fundraising efforts for the Vinson Reception, however, occurred during working hours as part of their official duties.

3. Appropriations Act Gift Acceptance Authority

The contributions for the Vinson Reception appear to have met some of the requirements of the Appropriations Act. According to witnesses interviewed by the OIG, the Mayor initially wanted to "do something" for VINSON (according to ARNOLD and JONES) and thanked the donors at the event for their respective contributions (according to VINSON). Therefore, it may reasonably be inferred that the Mayor approved the acceptance of the donors' respective contributions for the Vinson Reception. Moreover, as stated above, the Mayor is authorized by statute to expend funds for the reception and entertainment of government dignitaries and other eminent persons. The donations given by the 2012 Coalition and the Sports Commission, then, appear to have satisfied the Appropriations Act in that a reception for a local Olympic medal winner is, arguably, an "authorized function" of the Mayor's Office. See, e.g. District of Columbia Appropriations Act, 2001, Pub. L. No. 106-522, §118, 114 Stat. 2440, 2460 (2000).

The EOM, however, completely bypassed the Appropriations Act's final requirement of maintaining an "accurate and detailed" record of the acceptance and use of the donors' contributions. Indeed, no record was kept as the donors made their contributions directly to the vendors.

4. Fundraising Issues Raised by the Vinson Event

The general rule for government employees is that they may not engage in fundraising in their official capacities unless they have been granted specific authority by statute or Mayoral Order. See OCC Mem. to Anthony A. Williams, dated January 26, 2001, (AL-O1-062) at 4.

Dr. OMER, JONES, and TUCKER did not have independent statutory authority to solicit donations. During his interview with the OIG, the Mayor advised that he informally delegated his explicit gift acceptance authority, which carries implied authority to solicit, to Dr. OMER and JONES to further his public-private partnerships, and that it was his understanding that they would adhere to the appropriate legal requirements in implementing the solicitation and receipt of donations on behalf of the EOM. (WILLIAMS Tr. at 14)

Although Dr. OMER, JONES, and TUCKER ^VI-f may have been delegated the Mayor's gift acceptance authority, they were bound to follow the restrictions placed upon this authority as mandated by the Appropriations Act and District law. Simply stated, the Mayor cannot delegate authority he does not have. According to the Mayor, he believed that his delegation was conditioned upon adherence to legal constraints: "My understanding and appreciation of this was that Dr. Omer under his aegis would have Mark Jones working on these issues and again would ensure that they were done in the proper manner . . . ." Id.

Dr. OMER, JONES, and TUCKER did not exercise their gift acceptance authority properly in two important respects. First, as required by the Appropriations Act, the EOM failed to maintain a public record of the donations solicited from the 2012 Coalition and the Sports Commission for the Vinson Reception. Second, for accounting purposes, rather than allowing the donors to pay the vendors directly, Dr. OMER, JONES, and TUCKER should have ensured that the solicited contributions were deposited into an appropriate government fund in accordance with District law. See D.C. Code §47-130 (1991 Repl. & Supp. 1999). The EOM neither deposited the solicited contributions into a government fund nor prepared a report, available for public inspection, which documented the acceptance and use of these funds.

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5. DPM Violations

However, as noted elsewhere in this report, the issue presented in this case has not been formally settled by OCC or OCF - whether an employee's failure to ensure an accounting of funds (as required by the Appropriations Act), when the funds are solicited during the course of government employment, shifts the employee's fundraising outside his/her official capacity, thereby becoming a private activity. If such a technical failure places the government employee into his/her private capacity, then a number of Standards of Conduct in the District Personnel Manual apply to his/her actions.^VI-h

If this strict interpretation is to be applied in this case, then TUCKER may have violated DPM §1803.2(b), which prohibits the solicitation and acceptance of gifts (or other things of value) from those who have contractual relationships with or are regulated by the District. Because the 2012 Coalition is subject to District government regulation as a foreign non-profit, TUCKER solicited a gift from a corporation that is regulated by the District government. Therefore, if it is determined that he was in his private capacity when he made the solicitation because the gift acceptance law was not followed, he may have been in violation of DPM §1803.2.^VI-i Similarly, if this interpretation is applied, JONES, Dr. OMER, and TUCKER may have violated DPM §1804.1(b), which prohibits using government time/resources for private activities, and §1804.1(i), which forbids government employees from "[e]ngaging in any outside employment, private business activity, or other interest which is in violation of federal or District law."

However, it is not within the jurisdiction of the OIG to render a legal opinion on this issue. Accordingly, we will forward this issue to OCF and OCC for a final determination. The accounting and disclosure deficiencies in connection with EOM's fundraising efforts for the Vinson Reception were not mere oversights, but implicated a number of other Standards of Conduct. First, their fundraising activities in this instance violated DPM §1803.1(e), which prohibits government employees from "[m]aking a government decision outside official channels." Second, because donation procedures were not followed and a regulated entity was involved in one instance, the fundraising created the appearance of impropriety in violation of the Standards of Conduct. See D.C. Code §1-619.1(a) (1999 Repl.) (requiring strict adherence to ethical conduct in the performance of official duties and avoidance of any official action that adversely affects the public's confidence in government integrity); see also DPM §1800.1 (requiring District employees to avoid taking any official action which adversely affects the public's confidence in governmental integrity) and §1803.1(f) (same).

To avoid these violations, it was incumbent upon Dr. OMER, JONES, and TUCKER to familiarize themselves with the applicable legal requirements regarding government fundraising to ensure that all safeguards were met and to shield themselves from adverse action. Furthermore, the Mayor should have ensured that the scope of his delegation of authority was clearly set forth in a Mayor's Order, that all funds were placed in a District government account, were available for public inspection, and accounted for by an audit.

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6. Other Issues

The reception also had a secondary effect of furthering the District's bid for hosting a future Olympic Games in the D.C. metropolitan area. Thus, the 2012 Coalition's contribution was within its purposes as a non-profit corporation. (See Ex. VIN 5)

Finally, the appearance that the event, in part, may have been used to reward donors to the Mayor's campaign cannot be overlooked. While the Vinson Reception was a civic function - in that it legitimately honored a remarkable achievement by a District resident - it was not open to the general public. Rather, as evidenced by the "sample" and partial lists of invitees (Exs. VIN 10 and 14), many of the listed individuals conduct business with the District and, coincidentally, many had made political contributions to the Mayor's 2002 re-election campaign around the same time as the event itself. Certainly, the rationale for inviting representatives of these businesses is understandable given that they have an interest in the economic vitality of the District, which an Olympic Games in the D.C. area would promote. On the other hand, because there was the appearance that the event had an unstated political purpose, the integrity of the District government was tarnished by involving District government employees in the planning of such an activity. See D.C. Code §1-619.1 (a) (1999 Repl.) (mandating strict adherence to ethical conduct in the performance of official duties and avoidance of any official action that adversely affects the public's confidence in government integrity); see also DPM §1800.1 ("Employees of the District government shall at all times maintain a high level of ethical conduct in connection with the performance of official duties, and shall refrain from taking . . . any official action which would adversely affect the confidence of the public in the integrity of the District government."). However, this investigation did not uncover any evidence that government employees solicited or received political contributions during the event or otherwise engaged in political activity while on duty in violation of the Hatch Act. See 5 U.S.C.A §§73227323 (West 1996 & Supp. 1999).

NOTE: Attached as the final Exhibit is the list of donors for this event. (Ex. VIN 21)

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VI. MAYOR'S HOOP CORNER

A. BACKGROUND

The Mayor's HOOP Corner program marked an early example in a series of missteps taken by employees of the Executive Office of the Mayor (EOM) who used private sources to fund a Mayoral initiative designed to help the District's children. In this instance, the EOM entered into an informal partnership with a for-profit corporation whereby EOM employees both solicited items of value (sporting event tickets) from the corporation and assisted the corporation in soliciting items of value (food) from one of its vendors. The program was designed to promote "Hope and Opportunity for Outstanding Performance" (HOOP) for deserving District of Columbia Public School (DCPS) students. (Ex. MHC 1)

Mark JONES, former Deputy Chief of Staff for External Affairs, EOM, advised that he started the program in the fall of 1999, at a time when he was still Deputy Director of Operations, D.C. Lottery and Charitable Games Control Board (DCLB). He took the initiative to develop the program after he had a conversation with the Mayor, who expressed his concern about the high price of tickets to attend Washington Wizards basketball games, particularly for children. JONES was a friend and political supporter of Mayor WILLIAMS and the Mayor frequently asked JONES to help him organize and coordinate various civic activities.

Vivian BYRD, a DCLB employee, advised that she initiated the concept of the Mayor's HOOP Corner program after JONES advised her of his conversation with the Mayor and requested that she help him design a program that would make it affordable for underprivileged District youth to attend Washington Wizards basketball games at a reduced price or cost-free. BYRD advised that she and JONES developed a close working relationship at the DCLB and JONES began to depend on BYRD because he believed she could be counted upon to complete assigned tasks in a timely and dedicated manner. BYRD designed the program to be a joint venture, or partnership, between the District government and Washington Sports Entertainment, Inc. (WSE). WSE was the event management company for the MCI Center, the arena that hosts the Washington Wizards National Basketball Association team BYRD's goal was to provide opportunities for select District students to attend Washington Wizards basketball games based on their attainment of a "B" grade point average or their status as a DCPS "comeback kid." (Ex. MHC 1) The latter designation refers to a student "beginning to exhibit skills necessary for future academic success." Id.

BYRD understood that the success of such a program would require the cooperation of the corporate entity that controlled Washington Wizards basketball game tickets. BYRD advised that on November 16, 1999, she met with Judy HOLLAND, Senior Vice President, Community Relations and Washington Mystics Operations, WSE, to discuss BYRD's proposal, at which time HOLLAND agreed that WSE would donate 100 tickets per game for select Washington Wizards basketball games. HOLLAND advised that she received a copy of the proposal either from BYRD or JONES. The cover page of the proposal identified the origin of the program as the "Office of the Mayor" and displayed the District government logo. (Ex. MHC 2) The "Proposal" section states: "The Office of the Mayor and the District of Columbia are proposing to grant an opportunity for District of Columbia students to attend Washington Wizards and Capitals games." (Ex. MHC 2b) HOLLAND also confirmed that she met with BYRD and agreed, on behalf of WSE, to support BYRD's proposal with the donation of tickets. BYRD and HOLLAND both confirmed that the proposal also called for the donation of pizza and beverages by Papa John's Pizza, a food services vendor that operated at the MCI Center.

The investigation determined that the Mayor's HOOP Corner was no more than a civic program developed under the auspices of Mayor Anthony A. WILLIAMS. It was never developed into a legal entity, nor was it incorporated or registered to conduct business with the Department of Consumer and Regulatory Affairs. No effort was made to create non-profit status for the program.

BYRD advised that the program got underway early in 2000 and that she arranged with WSE to identify particular games where tickets would be made available to the Mayor's HOOP Corner program. BYRD would pick up the tickets from WSE and distribute them to local Advisory Neighborhood Commission (ANC) and Ward coordinators who, in turn, were responsible for contacting local DCPS schools to identify and recommend students to attend the games. BYRD acknowledged that she spent a substantial portion of her workday at the DCLB managing and coordinating the Mayor's HOOP Corner program from November 1999 through February 2000. This included such chores as typing, editing, and printing the Mayor's HOOP Corner proposal and flyers, telephonic coordination, as well as drafting, editing and mailing numerous communications to various entities assisting with the program Although BYRD acknowledged that she was responsible for ticket distribution, she could not accurately account for all the tickets received and confirmed no written records were maintained. She stated that she personally attended and helped chaperone students at four of the basketball games.

According to BYRD, the Department of Parks and Recreation (DPR) was responsible for providing transportation. On one occasion Robert NEWMAN, former DPR Director, expressed a reluctance to provide bus operators because he did not know who was going to compensate them for the overtime. BYRD advised that JONES notified Dr. OMER of NEB's concern and that Dr. OMER demanded that NEWMAN comply. 

HOLLAND advised that she initially coordinated ticket disbursement with BYRD but at some point Leslie PINKSTON, who worked in the EOM, assumed responsibility for the Mayor's HOOP Corner program. HOLLAND stated WSE donated tickets to five or six games, and she believed BYRD attended three games, while PINKSTON attended two games. HOLLAND stated that EOM personnel were responsible for obtaining refreshments for attendees from the Papa John's Pizza vendor at the MCI Center.

PINKSTON stated that in November 2000, she received a memorandum from JONES, which she believed was written by Thomas TUCKER (JONES' Special Assistant), asking her to work with the Mayor's HOOP Corner program. When she inquired as to the procedures that should be followed, JONES directed her to BYRD, who explained the Mayor's HOOP Corner concept to her. In one instance, PINKSTON acknowledged that she coordinated with WSE to obtain 100 tickets to a January 2001 Washington Wizards basketball game, and further coordinated with the Department of Employment Services (DOES) to identify students to attend this game and to solicit DOES assistance as chaperons. She contacted DOES for assistance because she knew

DOES coordinated another DCPS student-reward program for high school students known as the Mayor's Youth Leaders Institute. PINKSTON stated that she contacted "Samuel" (last name unrecalled) at DOES and instructed him to pick up 97 Wizards tickets from the front receptionist desk at the EOM. PINKSTON kept three tickets for herself, two of which she gave to friends who helped her coordinate the delivery of pizza and beverages at the game. It was PINKSTON's understanding that DOES would have the student attendees meet at a central location, and that they would walk to the MCI Center together to attend the game. PINKSTON indicated that she attended the January 2001 Wizards game but did not observe 100 students together at the MCI Center. She recalled seeing approximately 30 students, but has no knowledge as to what may have happened to the remaining tickets.

When Dr. Abdusalam OMER, former Chief of Staff, EOM, was first interviewed, he denied knowledge of the term "Mayor's HOOP Corner" or of the fact that it was a program affiliated with the EOM. He stated that he was familiar with a nationally known program called "Hoop Dreams" and speculated that the Mayor's HOOP Corner program might somehow be related to the Hoop Dreams program. He did recall that JONES invited him to accompany a group of approximately 50 District children to a Washington Wizards basketball game during the 1999 2000 basketball season. He subsequently confirmed March 8, 2000, as the actual date of the game. According to Dr. OMER, JONES, who was a DCLB employee at the time, told him that the children were transported to the game and supervised by employees of the DPR. Dr. OMER knew that Papa John's Pizza donated pizza and beverages and that WSE donated the basketball tickets; however, he denied knowing who solicited or otherwise made arrangements for these complimentary items.

Dr. OMER was shown a memorandum, dated January 21, 2000, addressed to him concerning the Mayor's presence at a Mayor's HOOP Corner basketball game. (Ex. MHC 3) He denied ever seeing this memorandum. He acknowledged that EOM employee Leslie PINKSTON worked on a number of children's issues for the EOM and was responsible for the receipt of tickets for children to attend social and athletic events that were donated to the EOM. However, he denied having knowledge of the donation of tickets pursuant to the Mayor's HOOP Corner program. 

During a subsequent interview, however, Dr. OMER acknowledged involvement with the Mayor's HOOP Corner program to the extent that he accompanied children to a Washington Wizards basketball game. He also remembered instructing NEB that he was to provide transportation for the students to the games after NEWMAN questioned the cost of overtime for the bus operators, and that DPR should assume the bus operator overtime costs. Dr. OMER also identified Mark JONES and/or PINKSTON as the EOM employees who organized the selection of students from different schools and community centers. Rick MORELAND, Senior Vice President, Sales and Corporate Marketing, WSE, advised that the EOM sought and received Washington Wizards basketball tickets other than those provided for the Mayor's HOOP Corner program. He related that on numerous occasions during 1999-2001, JONES contacted his office on behalf of the EOM to request game tickets. According to MORELAND, in most such instances JONES would indicate that the Mayor desired to present tickets to guests of the District or to attend games with them. MORELAND does not know if the Mayor ever received the tickets requested by JONES; however, he noted that the donated tickets were the best available seats.

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B. ANALYSIS

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1. Appropriations Act Authority

The Mayor may delegate his gift acceptance authority to any District of Columbia government employee, who may further delegate the authority to his/her subordinate. D.C. Code § 1-242(6) (1999 Repl.). During his interview with the OIG, the Mayor stated that he delegated his gift acceptance authority to Dr. OMER and further acknowledged that Dr. OMER sub-delegated this authority to JONES. (WILLIAMS Tr. at 18 and 22) JONES - even though employed at the DCLB as the Deputy Director of Operations - was authorized to solicit donations from WSE by virtue of this delegation, as was JONES' subordinate, BYRD. PINKSTON stated that she was asked by JONES (who was then an employee of the EOM) to succeed BYRD as the coordinator for the Mayor's HOOP Corner program in November 2000 and, thus, was informally delegated JONES' authority as well.

The Mayor also indicated in his interview that he delegated his gift acceptance authority with the understanding that the delegatees would ensure that they adhered to necessary legal requirements in implementing the solicitation and receipt of donations on behalf of the District government. In soliciting and receiving donated tickets for the Mayor's HOOP Corner program, JONES, BYRD, and PINKSTON did not ensure that the record-keeping requirements of the Appropriations Act and the D.C. Code were followed. Indeed, the evidence revealed that neither BYRD, nor JONES, nor PINKSTON maintained records regarding the EOM's receipt of donated tickets for the Mayor's HOOP Corner program games. The failure to document the Mayor's HOOP Corner program activities is problematic in that there could be no public accountability for the amount of the donations and how they were used.

While there were deficiencies with regard to the accounting requirements of the Appropriations Act, the purpose of the Mayor's HOOP Corner program appears to have met the Act's requirement that the donation must be used to carry out an authorized agency function. The Mayor is authorized to receive contributions of personal property as part of his Constituent Services Fund (aka "citizen-service program"). 3 DCMR §3014.5. Broadly speaking, activities or services that promote the general welfare of District citizens may be funded via the Mayor's citizen-service program. See id. §3014.1. In this case, the use of donated Wizards basketball tickets to reward youth academic success appears to fall within the broad purpose of the citizen-service program and, thus, the MAYOR'S HOOP Corner was an authorized function of the Mayor's Office.^VI-59

It is noteworthy to mention that during his interview with the OIG, MORELAND advised that in addition to the Mayor's HOOP Corner solicitation, JONES would contact him and request donated tickets for the Mayor so that the Mayor could present the tickets to those visiting the District. Such a solicitation, arguably, would be permissible under the Appropriations Act because the Mayor is authorized by his ceremonial authority to entertain government officials, eminent persons, and other dignitaries visiting the District of Columbia. D.C. Code §1-355(a) (1999 Repl.). A second option could have been to purchase the tickets directly with the fund's $25,000 appropriation. See id.

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2. Constituent Services Program

To make the Mayor's HOOP Corner program a reality, the Mayor could have ensured that the donated tickets were received and used by his Constituent Services program. D.C. Code §11443(a) (1999 Repl.). Depending upon the value and number of tickets, the Mayor could have simply purchased the tickets through funds in the Constituent Services account. However, District government employees are prohibited from engaging in fundraising activities for the fund during business hours. Id. §11443(e). Given that BYRD and PINKSTON performed work for the MAYOR'S HOOP Corner on government time, the EOM may have been deterred from using the Constituent Services program in this instance.

3. DPM Violations

Despite the best intentions of the government employees who solicited donations in conjunction with the Mayor's HOOP Corner program, their activity may have run afoul of the Standards of Conduct because proper record-keeping procedures were not employed. As stated in the Legal Framework Section of this report, and mentioned in several other narratives, it could be argued that the failure to adhere to mandatory rules in receiving donations on behalf of the District government could place government employees into their private capacities. Indeed, Mayor's Mem. 2002-1, entitled "Rules of Conduct Governing Donations to the District Government," posits that the failure to follow the rules when soliciting or accepting donations on behalf of the District government takes these actions outside the scope of official activity, which then exposes the employee to the risk of violating the DPM and regulations that apply to misconduct in an employee's official as well as private capacity.

VI-59. The final determination in this regard, however, is dependent upon a legal review by OCC.

However, this issue has not been formally addressed by OCC or OCF. Accordingly, we cannot speculate whether JONES and BYRD violated DPM §1803.2 (b) by soliciting gifts from a District corporation that is regulated by the District government, or DPM §1804.1 (b) by using government time/resources for private activities, or §1804.1(i) by engaging in private business activity that violates federal and District law. We will refer the issue to OCC and OCF for a final determination.

NOTE: Attached as the final Exhibit is a list of donors for this event. (Ex. MHC 4)

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VII. FOR THE KIDS FOUNDATION, INC. AND THE URBAN ASSISTANCE FUND

A. BACKGROUND

1. Creation of For the Kids Foundation

For the Kids Foundation, Inc. (FTK) was a non-profit organization created early in 2000 by Vivian BYRD, then Trade Development Specialist, D. C. Lottery and Charitable Games Control Board (DCLB), and Mark JONES, then Deputy Director of Operations, DCLB. It was designed to develop and implement, under the auspices of the Mayor, civic programs for the benefit of the District's children. It evolved from a smaller program entitled "Mayor's HOOP Corner" that was created in November 1999, also by BYRD and JONES, and designed for the dual purpose of rewarding exceptional academic achievement on the part of students in the District's public schools and affording underprivileged youth in the District's impoverished wards the opportunity to obtain complimentary tickets to see Washington Wizards basketball games.^VI-60

According to BYRD and JONES, in February 2000, Dr. OMER tasked JONES to expand the scope of the HOOP Corner to include year-round activities for children. Although JONES worked for the DCLB, the Mayor frequently called upon him to help with activities associated with the Office of External Affairs at the EOM. JONES was a friend and political supporter of Mayor WILLIAMS and had worked on his mayoral campaign. Since June 1999, Henry "Sandy" McCALL, the Mayor's first Deputy Chief of Staff for External Affairs, had been reassigned to work on Millennium Washington activities full-time. Consequently, the Mayor would call upon JONES to help assist with Office of External Affairs matters, such as coordinating the year 2000 Mayor's Prayer Breakfast and Economic Conference.^VI-61

As a follow-up to Dr. OMER's request, Mayor WILLIAMS instructed JONES to develop an allinclusive community outreach program to sponsor picnics, town meetings and a Christmas party for foster children. BYRD advised, and JONES and the Mayor confirmed, that the Mayor expected JONES to solicit financial assistance from the private sector to fund these programs. JONES solicited BYRD's assistance in developing a new organizational name for this expanded, community-oriented program. BYRD stated that she created the name "For the Kids." Dr. OMER then instructed JONES to organize FTK as a 501(c)(3) non-profit organization and to obtain tax-exempt status from the IRS.^VI-62

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2. Pre-Incorporation Activities

According to BYRD, beginning in February 2000, Louise "Lucy" YOUNG, then a retired DCLB employee who would later serve as JONES' interim assistant at the EOM, Thomas TUCKER, then a DCLB employee who would later serve as JONES' Special Assistant at the EOM, JONES, and herself began soliciting funds on behalf of FTK. JONES considered himself FTK's President, although he had not taken any action to incorporate FTK as a District business or to obtain a Charitable Solicitation License.

Mary PARHAM-WOLFE, Government Affairs Manager, Comcast Corporation, and Director, Friends of the D.C. Commission for Women, Inc. (DCW), advised that JONES contacted her sometime in February 2000 requesting a donation in the amount of $500 for FTK. She stated that JONES described FTK as the Mayor's non-profit organization and that its purpose was to take children to basketball games at the MCI Center. PARHAM-WOLFE later spoke with BYRD who furnished her with a letter requesting the donation. In March 2000, the DCW board of directors approved the donation and a DCW check in the amount of $500 was forwarded to BYRD. PARHAM-WOLFE thereafter solicited a donation of $500 for FTK through the D.C. Educational Enrichment Center.

On April 6, 2000, JONES opened a checking account for FTK at the Industrial Bank of Washington, D.C. The signature card for the account identified JONES as President with his social security number as the tax identification number. The address for the account is listed as BYRD's home address. From this date until December 2000, JONES maintained sole signatory authority and, according to BYRD, total control of the FTK checking account. On that same date, JONES initiated activity in the account by depositing the two $500 checks received from PARHAM-WOLFE. Also on this date, JONES opened a checking account for the D.C. Executive Fellowship Group (EFG) at the same Industrial Bank branch.^VI-63 JONES maintained joint signatory authority on the EFG account with Joseph YELDELL, the founder and Director of EFG.

On April 10, 2000, JONES left the DCLB and assumed the position of Deputy Chief of Staff for External Affairs, EOM, although he maintained his position as President of FTK and retained responsibility for fundraising for FTK programs. BYRD continued to assist JONES from her position at the DCLB. Shortly after JONES began working at the EOM, he hired TUCKER as his Special Assistant, at which time TUCKER assumed administrative responsibilities for developing FTK. However, BYRD continued to assist JONES and TUCKER by drafting and distributing solicitation letters to prospective donors in furtherance of FTK fundraising efforts. JONES insisted that he kept Dr. OMER and the Mayor advised of all his fundraising activities and would be asked to brief them on his progress at weekly EOM staff meetings. The Mayor and Dr. OMER disagree with JONES on this point; they do not recollect having any knowledge of JONES' fundraising activities, such as the identity of donors and the amounts raised for particular events. Other witnesses who attended EOM meetings and meetings in the Mayor's office support JONES and confirm that the Mayor and Dr. OMER were kept advised of JONES' fundraising efforts.

On May 4, 2000, the FTK checking account was credited with a deposit in the amount of $1,000. This deposit consisted of four $250 checks, one each issued by the D.C. Sports and Entertainment Commission, the Metropolitan Orthopedic Association, the District of Columbia Water and Server Authority, and AFRICARE House. However, the checks were made payable to EFG because the funds were solicited specifically for breakfast tickets and seating at four tables at the April 14, 2000, Mayor's Prayer Breakfast. The deposit slip listed FTK's checking account number, but identified EFG as the account payee. We have been unable to determine whether these checks were accidentally but erroneously deposited into the wrong account, or whether JONES intentionally accepted money solicited by one non-profit (EFG) for a particular purpose (the Mayor's Prayer Breakfast) and used it for another purpose (children's programs) of a different non-profit (FTK). JONES claimed that he was very busy at this point in time managing checking accounts for three non-profits - FTK, EFG and the Church Association for Community Services - and believed he made an unintentional mistake when he deposited these four $250 checks in the wrong account. Nevertheless, this error may have unintended tax consequences for both the donors and the non-profits because, at this time, neither FTK nor EFG was recognized by the IRS as a 501(c)(3) non-profit organization.

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3. Incorporation of For the Kids Foundation

The EIN helps identify an applicant during the process of seeking tax-exempt status. The applicant must then complete an IRS form listing its principal officers and their social security numbers. If an applicant meets all IRS requirements, it receives a Letter of Determination of tax-exempt status. However, FTK never completed the application process, never received a Letter of Determination and, unbeknownst to donors, never received IRS approval as a 501(c)(3) non-profit organization.

On November 21, 2000, articles of incorporation were filed with the DCRA for For the Kids Foundation, Inc. The articles state that FTK was formed to support charitable, scientific and educational activities for the District and its residents and listed William POLLACK, Joseph YELDELL and Dickie CARTER as the board of directors. (Ex. FTK 1) YELDELL and CARTER stated that they did not consent and were not aware that their names were placed on the articles of incorporation as members of FTK's board until so advised by the OIG during the course of this investigation.

JONES alleged that TUCKER initiated the incorporation of FTK without his knowledge or consent. JONES cited this action as an example of TUCKER's overly aggressive and independent management style that eventually led to his termination.

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4. Solicitations for For the Kids

According to BYRD, JONES requested that she and PARSON assume signatory authority on the FTK checking account. They agreed and became co-signatories on the account effective December 1, 2000. (Ex. FTK 3) JONES, however, maintained possession of the account's starter checks. From December 1-21, 2000, FTK received a total of $39,500 in donations. The solicitation letters varied slightly in their approach. One letter sent to a representative of Golin/Harris International by BY-RD makes no mention of any affiliation with the District government: However, the letter lists "JONES, Deputy Chief of Staff' as the contact person and provides a District government telephone number for JONES. (Ex. FTK 4) Another letter, sent to the owner of Lottery Technologies Enterprises, Inc. (LTE) states that FTK is "funded by the Mayor of the District of Columbia, Anthony A. Williams" and is in a "partnership for education" with the District government. (Ex. FTK 5)

The donors include a number of corporations and individuals that have business relationships with the District government, to include: Capitol Auto & Truck Auction, Inc., Lockheed Martin, Comcast, Terence & Kathleen Golden,^VI-64 L.B. Doggett, Fannie Mae Foundation, and Anheuser-Busch Companies, Inc. According to BYRD, these donations were solicited by JONES, TUCKER, YOUNG, and BYRD with the belief that they were acting in their official capacities as District government employees. Two interviews are illustrative of their solicitation process.

Glen HOWARD, Senior Vice-President, Fannie Mae Foundation, advised that he responded favorably to a letter of solicitation on behalf of FTK in which BYRD was identified as the contact person. HOWARD was not familiar with FTK and stated that this instance was the first time that his company donated to the organization. HOWARD further advised that no one placed any pressure upon him to make a donation and no one offered any promise or benefit to his foundation. He remembered that he received a follow-up letter from BYRD thanking him for his foundation's generosity and that Leslie PINKSTON provided him with a detailed explanation of the expenditures related to the event. He explained that his organization required this documentation due to the nature of the donation.

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5. The Mayor's December 10, 2000 Holiday Reception for Foster Children

a. Event Planning

PINKSTON, Special Assistant to the Mayor, EOM, advised that in August 2000 she approached Mark JONES and requested permission to begin planning the Mayor's holiday reception for foster children, which was commonly known as the foster children's Christmas party. She took this initiative because she remembered that the 1999 party, which was held at the Calvin Coolidge Senior High School Activity Center, was poorly planned and was generally believed to have been unsuccessful. JONES agreed with PINKSTON's assessment and approved her request, but also asked her to simultaneously plan a second holiday reception for adults. The adult Christmas party was scheduled for December 21, 2000, at the D.C. Armory. PINKSTON accepted the responsibility for planning both parties and furnished JONES with progress reports throughout the duration of the planning process.

Sashia JONES, Director of Communications, Washington Sports and Entertainment, Inc. (WSE), the events management company for the MCI National Sports Gallery, advised that she assisted PINKSTON with some of the details pertaining to the foster children's holiday party. Sashia JONES helped secure the venue for the party and negotiated for a WSE subsidy for the cost of entertainment. WSE also secured commitments from members of the Washington Wizards basketball team to attend the party. The event was officially known as "The Mayor WILLIAMS and Washington Wizards Holiday Party." A promotional flyer for the event contained a picture of Mayor WILLIAMS and the Wizards team logo. (Ex. FTK 6)

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b. Event Funding

SPENCE advised that he founded UAF in 1995 for the sole purpose of providing financial assistance and social services to disadvantaged District residents. The articles of incorporation state that its purpose is to raise funds for health, welfare and recreation purposes, to provide facilities, manpower, and community leadership for fundraising, and to allocate and distribute funds accordingly. UAF was incorporated as a District business and had once been recognized by the IRS as a tax-exempt 501(c)(3) non-profit organization. However, according to SPENCE, and apparently unbeknownst to JONES, UAF's 501(c)(3) status expired on June 30, 2000, and had not been renewed.^VI-65

A review of the disbursements from the FTK checking account in relation to this event indicated that FTK expended a total of $14,124 for the party. These expenses included $12,202 for the D.C. Convention Center for use of the venue and for catering services; $216 to reimburse PINKSTON for art supplies she purchased for arts and crafts activities; and $1,699 for DLA Marketing Services, a company that provided photographic services at the party. DLA Marketing Services is owned by Dennis ADAMS, an LTE employee. LTE is owned by Leonard MANNING, a business acquaintance of Mark JONES. MANNING is mentioned throughout this report as one of the individuals whose business is dependent on District government contracts (DCLB) and who was frequently solicited for donations by EOM employees.

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6. The Mayor's December 21, 2000, Adult Holiday Reception

a. Event Planning

YOUNG advised that it was her understanding that, with just one week's notice, Mark JONES was instructed by Dr. OMER to organize an adult Christmas party in honor of the Mayor. JONES asked YOUNG to help him coordinate the event, which was to be held at the D.C. Armory on December 21, 2000. PINKSTON advised that she told JONES that she did not want fundraising responsibility for this reception or for the other holiday events being planned. JONES agreed to handle the fundraising himself and instructed PINKSTON to participate in the planning progress.

PINKSTON advised that she contacted Bernard BROOKS, Owner of Henry's Soul Cafe, in November 2000 regarding his company's availability to cater an EOM Christmas party scheduled for December 21, 2000. BROOKS had never provided any catering services to the EOM but agreed to help PINKSTON by providing food for five hundred individuals.

PINKSTON also advised that she contacted Doria BROOKS, spouse to Bernard BROOKS and Owner of Divine Affairs, in November 2000 and requested an estimate for organizing a Christmas party scheduled for December 21, 2000. Doria BROOKS agreed to provide the services requested. Henry's Soul Cafe provided catering services for $15,850 and Divine Affairs organized the event for $17,864. The D.C. Armory was made available without cost.

SPENCE advised that JONES informed him at their introductory meeting of a holiday party that was to take place at the D.C. Armory and inquired whether SPENCE would be willing to help JONES finance the party. JONES advised SPENCE that he would like to take advantage of UAF's supposed 501(c)(3) tax-exempt status by accepting donations from corporate donors, but on behalf of FTK. SPENCE claimed he did not think to ask JONES why FTK did not solicit for donations directly in its own name because, to SPENCE's knowledge, FTK was also a 501(c)(3) non-profit organization.

SPENCE stated that he agreed to help JONES, in part because his assistance would help children, and because they agreed that UAF would receive any surplus funds after all expenses were paid. According to SPENCE, JONES convinced him that this was an opportunity for UAF to build a rapport with larger corporations in the event UAF might want, to engage in future solicitations for its own purposes.

SPENCE advised that he attended the party on December 21, 1999, and that there were no children in attendance. He claimed that because funds were raised for FTK, a children's organization, he assumed that children would be involved in the event or be the event's beneficiaries. He conceded that it appeared unusual to have a Christmas party for foster children and then have no children in attendance. SPENCE advised that after the party was over he came to realize that donations raised by JONES through UAF were actually intended for the Mayor's Adult Holiday Reception.

YOUNG advised that invitees included EOM personnel, District agency heads, members of the Mayor's cabinet, executive management personnel, and individuals well-known for their political or social ties to the District. Approximately five hundred individuals were invited; however, only 75 individuals attended. According to interviewees who attended the reception, it was purely a social gathering. It did not have the appearance of a political event; moreover, there were no speakers and no political fundraising was conducted or discussed.

Although Mayor WILLIAMS did attend the event, he denied having any prior knowledge as to the manner in which the party was funded.

I mean, I was flabbergasted to hear that the dollars that were raised [for] For The Kids Program went to my own party. I didn't even ask for a party .... I asked for the kids' party. I asked for the inaugural stand. I asked for all these things. I never asked for a party . . . . So when that finally hit, I said, well, this is - this is insane. But I'm sure there's got to be an accounting. And the only - and the only problem will be just a difference - you know a difference of opinion on the application of the rules. And obviously that was not true.

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b. Event Funding

JONES solicited contributions from the following corporations for the Adult Holiday Reception: Radio One, Inc. - $2,500; U.S. Trust Company - $1,500; General Merchandise Supplies Unlimited- $1,000; and VIP Properties - $200. One particular donation is worthy of note because it confirmed the deception exhibited by JONES in his efforts to raise money to pay for the two holiday parties. Jeffrey THOMPSON, Chairman and Owner, District of Columbia Chartered Health Plan, advised that he received a telephone call from JONES on or about December 10, 2000, seeking a contribution for a foster children's Christmas party hosted by Mayor WILLIAMS. At this time, the D.C. Chartered Health Plan contracted with the District Government to provide services to the Medicaid Program THOMPSON agreed to make a $5,000 donation because he believed JONES' request was for a worthy cause, particularly since many of his company's clients are foster children. JONES informed THOMPSON that UAF would host this event and that he should make his check payable to UAF. THOMPSON did not receive any follow-up letters as a result of his conversation with JONES. THOMPSON provided JONES with the $5,000 check during the Mayor's Adult Holiday Reception.

Henry's Soul Food Cafe and Divine Affairs were each paid by checks issued from the FTK account. Bernard BROOKS received a $5,000 deposit from the EOM, but could not confirm if the deposit was a combination of a check and a credit card transaction or if it was by credit card only. The OIG was unable to determine the origin of the deposit. However, a FTK check, dated December 27, 2000, was issued to Henry's Soul Food Cafe in the amount of $10,850 as final payment for its catering services. A $7,250 FTK check, dated December 15, 2000, was issued to Divine Affairs for the initial deposit; on December 22, 2000, a second FTK check was issued to Divine Affairs in the amount of $8,000.

On or about January 16, 2001, a representative from Divine Affairs came to the EOM and spoke with PINKSTON regarding an outstanding balance. PINKSTON immediately attempted to contact JONES, who was unavailable. As a result, YOUNG paid the outstanding balance with her check from High School Skinny, Inc., a nutritional and dietary business she operated. On January 17, 2001, BYRD produced a FTK check issued to High School Skinny, Inc. in the amount of $2,614.00. YOUNG advised that the purpose of this check was to reimburse her for settling the invoice for Divine Affairs. In total, Divine Affairs received $17,864 for services rendered for the Mayor's Adult Holiday Reception.

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7. The Mayor's January 20, 2001, Inaugural Parade Reception

JONES enlisted the assistance of YOUNG to organize the event and to select the vendors. According to YOUNG, JONES explained to her that Mayor WILLIAMS wanted to host an inaugural event at the John Wilson Building. YOUNG also stated that she acted in an advisory capacity and had no involvement with the solicitation of sponsors for the event. YOUNG stated that JONES coordinated the overall sponsorship for the event. SPENCE believed that both JONES and YOUNG engaged in solicitation for the Inaugural Reception and that Dr. OMER was aware of this fact.

The proposed guest list for this event included Mayor WILLIAMS and members of the D.C. Council. Witness interviews determined that no government employees solicited or received political contributions or otherwise engaged in political activity during this reception.

In order to fund the event, JONES solicited a total of $83,000 in contributions from various corporate donors. Corporations that did business with the District government and made donations include: Comcast Financial Agency Corporation ($35,000), the Coca-Cola Company ($25,000), the Potomac Electric Power Company (Pepco) ($15,000), the Washington Gas Light Company ($5,000), Unlimited Security, Inc. (Jeffrey N. JACKSON) ($2,000), and Crawford Edgewood Management, Inc. ($1,000). According to SPENCE, all of the corporate donations were made payable to the UAF and deposited into the UAF account. SPENCE paid the vendors out of the UAF account at JONES' instructions. Vendor bills for the Inaugural Parade Reception totaled $82,599. A review of UAF's records indicated that its net profit for assisting JONES with soliciting donations for the reception amounted to $401.

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8. Other For The Kids Foundation Financial Activity

The investigation also determined that in the latter part of December 2000, JONES and YOUNG solicited thousands of dollars in donations through the Executive Fellowship Group (EFG); another nonprofit organization for which JONES was a cosignatory on its checking account, without the knowledge and/or authorization of Joseph YELDELL, EFG's founder, nine months after the purpose for EFG's fundraising (the Mayor's April 2000 Prayer Breakfast) had concluded. On January 5, 2001, JONES arranged for the transfer of $6,200 from the EFG account to the FTK account.

On March 15, 2001, YELDELL provided the OIG with four un-negotiated checks in the amount of $1,000 each. Further investigation determined that JONES and YOUNG had solicited an additional $4,000 through EFG that was presumably earmarked for FTK. Before the checks were negotiated and the funds transferred to FTK, allegations of inappropriate fundraising by the EOM became public and JONES was placed on administrative leave and eventually dismissed. YOUNG advised that she found the checks accidentally after JONES left office and did not know how to negotiate the checks; therefore, she forwarded them to YELDELL's residence as that address appeared on the checks. When YELDELL made these checks available to the OIG, he stated that he did not know the purpose of the checks.

According to BYRD, all checks prepared for FTK expenditures were at the instruction of JONES. PARSON advised that when he realized that FTK's activities did not appear to be congruent with FTK's stated mission, he resigned as FTK Treasurer on January 22, 2001.

JONES and YOUNG therefore appear to have solicited a total of $10,200 through EFG in the late December 2000 time period.

On February 1, 2001, FTK filed articles of dissolution with DCRA and summarily received a certificate of dissolution. (Ex. FTK 7) As of this writing, the FTK checking account stated a balance of $10,178.77. BYRD advised that as of February 2002, FTK bank statements were still being forwarded to her residence, but she does not open them or know the account's balance. BYRD said both she and PARSON have asked JONES to have their names removed from the account but he has yet to comply with their wishes. JONES told BYRD that he was not going to do anything with the account until the OIG investigation concluded.

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B. ANALYSIS

1. EOM Partnerships with FTK and UAF

There was no funding appropriated for these three receptions (the foster children's holiday reception, the adult holiday reception, and the inaugural reception) pursuant to the Appropriations Act for fiscal year 2001. However, the EOM had other possible funding sources, to include: 1) the Ceremonial Fund; 2) the Constituent Services Fund; 3) funds otherwise appropriated for District government operations with compatible purposes; 4) funds generated through the Mayor's gift acceptance authority as set forth in the Appropriations Act to solicit and accept monetary contributions; or 5) engage in partnerships with nonprofit organizations, but only to the extent that the private partner controlled all fundraising.

As detailed further in the other narratives in this report, the Ceremonial Fund and Constituent Services Fund have limitations that made them unsuitable to finance events JONES was instructed to develop and conduct. JONES made no effort to identify other appropriated funds to fund the events, due primarily to the fact that it was his understanding, which the Mayor confirmed, that he was to use private funding sources for these kinds of activities. The Mayor's solicitation and gift acceptance authority required that any donations be given directly to the District government. None of the funds solicited on behalf of UAF or FTK was done so in a manner consonant with the Mayor's authority under the Appropriations Act. Therefore, the activities of JONES and his staff led us to conclude that it was their intent to use private nonprofit funding sources to finance the three receptions. However, their degree of control over the nonprofits fundraising operations of these non-profit organizations implicated JONES and his staff in the violation of law and the Standards of Conduct applicable to District employees.

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2. Excess Government Control Over Private Entities

Private entities (such as non-profit corporations) may, on their own, raise and spend funds to support or complement government activities or activities jointly sponsored by the government and the private entity, if such funds are not at any point in the possession or control of a District officer, employee or agency.

Id. There are caveats, however: "In accepting donations of money, property or services, District officials and employees must be clear that, such donations are true gifts, and that no special treatment by the District on behalf of the donor is expected or given." Id. at 2.

Instead of allowing the non-profit entity to operate independently, JONES solicited funds, which he subsequently controlled, and he involved other District government employees in soliciting funds, organizing the three receptions, and maintaining possession of the funds. Worse, JONES redirected money solicited for UAF (a non-profit that had allowed its tax-exempt status to lapse but was nonetheless a convenient entity to encouraged donations), to another entity (FTK) for a purpose that, at least in the case of the Mayor's Adult Holiday Reception, did not comport with the charitable mission of UAF or FTK. Additionally, JONES' direct solicitation of donations created a legal problem for the UAF because the organization was not in possession of a Charitable Solicitation Registration License. Further, FTK and UAF may not have properly considered the taxable nature of the value of the donations they received.

Finally, JONES' use of FTK and UAF to fund these receptions illuminated the government accountability problems forecasted by PAYTON in Mayor's Mem. 91-11. First, a private sector entity does not have to follow strict procurement and contractual regulations when it seeks to host an event, since - unlike its public counterpart - it is not accountable to the general public for the use of its money. The most glaring example of this distinction is the payment of $33,714 to a vendor to organize a holiday reception for approximately 75 people. Had the EOM funded this event using taxpayer dollars, it would have been required to adhere to applicable restrictions governing bidding and other procurement procedures to ensure, inter alia, that the District received the best price for services rendered and that the selection process was free of conflicts of interest or other undue influence.

Second, privately funded events are not bound by the limitations of the Appropriations Act. Conversely, the Anti-Deficiency Act prohibits government entities from spending appropriated funds outside of congressionally approved purposes or amounts. See 31 U.S.C.A. §1341(x)(1) (West 1983 & Supp. 1999); see also D.C. Code §47-105 (1997 Repl.) (extending the federal anti-deficiency statute to the District government). Similar to the above observation, had the EOM funded this event using taxpayer dollars, it would have been required to adhere to the use and dollar limits set forth within the Appropriations Act. At a basic level, the use of public monies to fund government events provides for full disclosure and accountability of government activity and limits the potential for the influence of competing private interests.

If the EOM had elected to use appropriated dollars to fund the Inaugural Parade Reception, it would have been required to obtain congressional approval for the purpose and amount of money expended for the endeavor. Similarly, if the Mayor had accepted a gift to augment the Ceremonial Fund, he would have been required to provide an accounting and full disclosure to Congress pursuant to the Appropriations Act. The EOM, however, chose neither of these two options to fund these events. Instead, the EOM raised and expended $83,000 to host a nonpublic event for high-level officials, which was funded by substantial donations given by private entities, some of which have business interests in the District government or are regulated by the same.

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3. Mayor's Knowledge

During the OIG's November 30, 2001, interview, the Mayor indicated that he had never asked for the holiday reception for adults and did not know it was funded through FTK donations solicited by the EOM staff. The Mayor was advised that JONES and other EOM staffers believed they were under a lot of pressure to constantly find ways to finance events such as the three receptions, but did not intentionally violate rules regarding fundraising. The Mayor was not sympathetic to this excuse. As was the case with several other events, the Mayor was not well-served by his staff, especially JONES and Dr. OMER, who failed to obtain and/or follow legal advice concerning the proper avenues for fundraising. This failing appeared to be clear to the Mayor.

[I]t's one thing for a staff person to say that I expected too much of them and expect[ing] too much of them, they ended up making a lot of mistakes that they wouldn't have made but for my high level of expectations . . . . I would argue against that saying that, yes, I had high expectation[s]. It wasn't hard -- that hard to fulfill the expectations that I had . . . .

And what I'm saying the frustration I had is that there was this general notion that - among people that I basically was getting tired of was that, if you did the right thing, it was okay if you had five or six mistakes. And its not okay to have five or six mistakes because the five or six mistakes undermine what you're trying to do . . . .

(WILLIAMS Tr. at 103-4). The Mayor conceded that although he expected JONES and his staff to raise funds from the private sector for particular activities, he generally was unaware of the details of their fundraising efforts. The evidence is inconclusive as to whether he knew JONES was raising money for particular events, the means used to finance the funds or the identity of donors. The Mayor claimed that he entrusted those members of his staff charged with coordinating fundraising to do so correctly. The Mayor's assertions are further borne out by comments he made at his press conference on January 9, 2002, in which he denied wrongdoing on his part but accepted blame for lapses in management and for not paying more attention to what his staff was doing.

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4. DPM Violations

We note that the Office of Campaign Finance (OCF), in a November 7, 2001, Order concerning the involvement of JONES and others in the solicitation of funds for UAF and FTK in order to fund the Inauguration Reception and the Mayor's Holiday Reception, made the factual determination that JONES believed that soliciting funds from and for private non-profit organizations for District governments events and activities was within the scope of his official position. However, OCF found that "notwithstanding his belief that the conduct was within his authority, JONES "violated the Standards of Conduct because soliciting funds for a private nonprofit organization is not government business." OCF Order, "In the Matter of Mark Jones, Deputy Chief of Staff, Office of the Mayor," Docket No. PI 2001101 at 10. To this, we would add that the nature of the events being "coordinated," the party for adults, would hardly qualify as the business of government.

JONES, while holding himself out as the President of FTK, solicited funds from various corporate entities that conduct business with or are regulated by the District government. In furtherance of his solicitation efforts, JONES used his official government title to conduct this activity. His solicitation on behalf of FTK occurred on government time, in conjunction with his government subordinates. From April - December 2000, JONES maintained sole signatory authority over FTK's checking account.

By soliciting for a private entity, JONES was not engaged in government business and, therefore, he was acting in his personal, rather than official, capacity. Accordingly, we concur with the finding of OCF that JONES violated DPM §1803.2(b), the Standards of Conduct provision which prohibits the solicitation and/or receipt of funds from individuals and businesses conducting operations or activities which are regulated by the District. TUCKER and BYRD also violated §1803.2(b) due to the solicitation they conducted under JONES' instructions

In addition, we believe JONES violated a number of other Standards of Conduct provisions, to include §1803.1(a), (e), and (f) (an employee shall avoid action that results in or creates the appearance of using public office for private gain, making a government decision outside official channels, or affecting adversely the confidence of the public in the integrity of government); §1804.1 (b) (using government time or resources for other than official business), (c) (directing subordinate employees to perform personal services during official duty hours, (e) (engaging in outside private business activity or interest which permits an employee, or other, to capitalize on his/her official title or position, and (i) engaging in any outside private business activity, or other interest which is a violation of federal or District law ; and §1806.1 (permitting the use of government property, equipment, or material of any kind for other than officially approved purposes).

Further, TUCKER, PINKSTON, BYRD, and CANTY'S fundraising activities also resulted in their violating DPM §§1804.1 (b) and 1806.1. Finally, TUCKER'S failure to deposit solicited funds into an appropriate government account resulted. in his violating DPM §1804.1(i) as well.

The transfer of funds from UAF to FTK created the appearance that JONES chose to use the nonprofit organization as a conduit for fundraising in order to make it attractive to donors seeking tax-deductible donations. At the very least, such conduct impugned upon governmental integrity, thereby violating DPM §1800.1. However, it is beyond the scope of this investigation to review the tax records of the donors and non-profit entities. Therefore, the results of this investigation will be referred to the IRS and the District of Columbia Office of Tax and Revenue, Office of the Chief Financial Officer, for further consideration.

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