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Footnotes*NOTE: This executive Summary, as well as a more detailed overview, can be found on our website, www.dcig.org. Information concerning potential criminal or administrative violations referred to enforcement agencies has been redacted in order to preserve the integrity of future inquiries and to protect the privacy of individuals involved. 1. Subsequent to the events described in this report and the initiation of the investigation thereof, the 2001 edition of the D.C. Code was published. Accordingly, all references to the D.C. Code in this report refer to previous editions as cited. I-1. A separate written request for investigation from Council member Kathleen PATTERSON was received by the OIG at this time; however, it concerned non-fundraising issues associated with the D.C. School Board Referendum. Consequently, it was not incorporated into this investigation of fundraising conducted by the EOM. I-2. The investigation identified this activity as the Mayor's December 10, 2000, Foster Children's Holiday Reception and the fundraising organization as For the Kids Foundation, Inc. (FTK). I- 3. The investigation identified this activity to be the Mayor's January 20, 2001, Inaugural Parade Reception. I-4. The investigation determined that A Second Chance Foundation, also known as A Second Chance Community Foundation, was only a proposed concept for fundraising. No such organization was ever created or incorporated in the District of Columbia, and no fundraising was conducted or golf tournament held on its behalf. I- 5. Washington Gas and Electric Company only participated in fundraising activities in the capacity of donor.I- 6. Our investigation determined that A Better Washington Political Action Committee, Inc., was the proposed name for a political action committee that was suggested to Dr. Abdusalam OMER when he was Chief of Staff, EOM, by a friend and political supporter of Mayor WILLIAMS. It was never more than a concept and did not engage in fundraising. I-7. See, e.g., The Washington Post, "Williams Aides' Fundraising Questioned, " January 30, 2001, at BO1; The City Paper, Volume 5, Number 4, "Good For The Gander, Not The Goose, " January 26 -February 1, 2001, Volume 5, Number 4. I- 8. The acronym "HOOP" stands for "Hope and Opportunity for Outstanding Performance." II- 9. Section 501(c)(3) of the U.S. Internal Revenue Code of 1986 (I.R.C.) provides tax-exempt status for non-profit organizations with charitable missions. Donations in furtherance of the charitable purposes are tax-deductible. See 26 U.S.C.A. §501(c)(3) (West 1988 and Supp. 1999). II-10. According to information obtained during the investigation, the value of each ticket was minimal given that they were part of an allotment of tickets set aside for community needs. III-11. See D.C. Code §1- 619.3(a); Mayor's Order 82-136 (July 7, 1982); and DPM §1811.1. III- 12. See DPM §1811.2. III-13. It is our understanding that the Acting General Counsel to the Mayor now serves as Ethics Counselor for the EOM. III-14. See DPM §1813. III- 15. See §§1813.2 and 1813.5. III-16. 26 U.S.C. §170(a)(1) (West 1988 & Supp. 1999). III- 17. Contributions for political campaigns are not tax-deductible to the donor. IV- 18. The Constituent Services Fund is unique in that the Mayor may use un-expended campaign funds, funds donated by himself or others to. fund "citizen-service" events/programs, or funds solicited by government employees outside of their normal duty hours. See discussion, infra, for further information regarding this fund. IV- 19. We did not find that campaign funds were raised or used to fund any of the events described in this report. IV-20. This interpretation is very conservative. As long as other conditions have been met, the Constituent Services Fund has been used for events such as Ward picnics and parties for needy children. IV-21. The determination of what constitutes an "official function" should be confirmed through consultation with the OCC. IV- 22. See D.C. Code §1-242(6) (1999 Repl.) (permitting the Mayor, subject to two exceptions not applicable here, to delegate his functions to any District employee or agency subordinate to the EOM, and further permitting these employees to sub-delegate these functions to their subordinates). IV-23. See D.C. Law 14-16, Campaign Finance Amendment Act of 2001, effective October 13, 2001, which prohibits the use of District government resources for campaign-related activities. IV-24. Within two weeks of passing the Ethics in Government Act of 1978, the Inspector General Act was passed to establish independent investigators charged with discovering and reporting on waste, fraud, abuse, and employee misconduct. IV- 25. See, e.g., 44 CFR §362.3 (2000) (forbidding solicitation by FEMA employees). IV-26. See, e.g., Department of Justice Order 2400.2, September 2, 1997. The Department of Justice has never approved a solicitation. V- 27. Letter from Anthony Herman, Esq., Covington & Burling, to Charles Maddox (Jan. 7, 2002) (citing Comp. Gen. Decision B255,474 (Apr. 3, 1995)). V-28. Comp. Gen Decision B-255,474 concluded that the Department of Health and Human Services may use appropriated funds to apply for grants; the Office of Legal Counsel, U.S. Department of Justice, has opined that the failure of Congress to prohibit solicitation after public solicitation efforts by federal agencies leads to the conclusion that the statutory authority to accept and utilize gifts includes the implied authority to solicit gifts (Memorandum for Director, Office of Government Ethics (Jan. 19, 2001). V- 29. See Mayor's Mem. 91-11 from John Payton, Acting Corporation Counsel (Mar. 5, 1991) ("Private entities (such as non-profit corporations) may, on their own, raise and spend funds to support or complement 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."). V- 30. Mem. from Darryl G. Gorman, Senior Deputy Corporation Counsel for Government Operations, Legal Counsel Division, to Lafayette Barnes, Senior Policy Analyst, Office of the Mayor (Oct. 19, 1999) at 2. VI- 31. Section 501(c)(3) of the U.S. Internal Revenue Code of 1986 (I.R.C.) provides tax-exempt status for non-profit organizations with a charitable missions. See 26 U.S.C.A. § 501(c)(3) (West 1988 & Supp. 1999). VI-32. At the conclusion of the Main Street Millennium celebration, McCALL arranged for an independent accounting of MWCB, with the audit covering the period from November 1, 1999, through January 31, 2000. The audit concluded that MWBC's position was strong. However, according to a representative of the auditing firm, MWCB refused to pay its $7,000 bill, claiming the fee was too high. There was never any further independent accounting or final audit of MWCB's books and records. A final report was never prepared. VI-33. Section 501(c)(3) of the U.S. Internal Revenue Code of 1986 (I.R.C.) provides tax-exempt status for non-profit organizations that have a charitable mission. See 26 U.S.C.A. § 501(c)(3) (West 1988 & Supp. 1999). VI- 34. JONES interview conducted on November 9, 2001. VI-35. Section 501(c)(4) of the U.S. Internal Revenue Code of 1986 (I.R.C.) provides tax-exempt status for non-profit organizations that promote social welfare or local associations of employees, and whose earnings are devoted to charitable, educational, or recreational purposes. See 26 U.S.C.A. § 501(c)(4) (West 1988 & Supp. 1999). WFC was also registered with the Internal Revenue Service in May 1999. VI-36. Bob JONES informed investigators that he retired on July 3, 2001, and became a self-employed political consultant thereafter. VI-37. RICHARDSON also informed investigators that he and Bob JONES are friends. VI-38. BROWN served as WILLIAMS' General Counsel (April 1996 - June 1998) when Mayor WILLIAMS was the District's Chief Financial Officer. He then became WILLIAMS' Deputy Campaign Manager in June 1996 until November 1998. Thereafter and until February 2000, he served as Mayor WILLIAMS' Deputy Chief of Staff and General Counsel in the EOM. VI-39. WEST informed OIG investigators that he also provided logistical assistance to Bob JONES for the Mayor's RNC luncheon reception. Specifically, he assisted in selecting the restaurant and offered input on how long the Mayor should stay at the RNC in order to appear as bi-partisan as possible. WEST stated, however, that he neither attended the RNC luncheon reception nor received compensation for his consulting services. WEST indicated that he was also responsible for arranging transportation for the Mayor's mother. WEST used a portion of the $4,750 from WFC to pay for her rental vehicle. VI- 40. At the time, BENDER was also a graduate student with the George Washington University (GWU) Graduate School of Political Management, and he attended the DNC on behalf of GWU as a student employee. BENDER stated that although he attended the DNC as a graduate student, SERMONS-WARD (his supervisor) requested that he assist with writing speeches for Mayor WILLIAMS, if necessary. BENDER stated that he wrote one speech for the Mayor, but that the speech was not used. BENDER added that he wrote the referenced speech using his own personal laptop computer during his free time and that he received no compensation for the same. VI-41. See CACS Prayer Breakfast/Economic Development Conference Narrative for further details concerning Dr. OMER's and Mark JONES' DNC travel expenses. VI-42. These invitations were made in the Mayor's and Diane WILLIAMS' names. VI-43. RUFFIN also stated that he assisted Bob JONES with the RNC luncheon but was not compensated for his assistance. VI-44. Brazil's breakfast reception was held at the Los Angeles Hilton Hotel and was sponsored by Pepco, Verizon, and Washington Gas. VI-45. The determination of whether a function is "official" requires legal review and, ultimately, should be determined by OCC. VI- 46. Section 1-2272 refers to the definition of "District government" as found in § 47-393(5) to exclude BID entities. Section 47-393(5) defines the term "District government" as "any department, agency or instrumentality of the government of the District of Columbia; any independent agency of the District of Columbia . . . or any other agency board, or commission established by the Mayor or the Council; the Council . . . and any other agency, public authority, or public benefit corporation which has the authority to receive monies directly or indirectly from the District of Columbia . . . ." Id. § 47-393(5) (Supp. 1999). VI-47. See Legal Framework Section of this report for further clarification. VI-48. The determination, however, of whether a function is "official" necessitates legal review and a final determination by the Council's General Counsel or by OCF. VI- 49. The DPM assigns enforcement responsibility for violations of the Standards of Conduct by members of the Council to OCF. DPM § 1802.1(a). VI-50. Mark JONES' statements in his November 9, 2001, interview with the OIG corroborate TUCKER's assertion in this regard. (See Mark JONES Tr. at 127-28) VI-51. The Sports Commission's Chief Financial Officer, BURRELL, was hired by the Commission in December 1999. RICHARDSON has been the Chair of the Board of Directors since 1999, and GRAVES has been a self-employed contractor with the Commission since September 1999. VI- 52. As was the case, for example, with the Prayer Breakfast, which was funded by solicited contributions channeled through a non-profit organization, the Church Association for Community Services (CACS). See Prayer Breakfast/Economic Development Conference Narrative. VI- 53. This is a legal characterization that should have been referred by the EOM to the Corporation Counsel for resolution. VI-54. We do not take a position on whether fundraising for this event can be considered an augmentation of the Mayor's Ceremonial Fund or fulfills some other official purpose; we believe, however, that a legal review of this issue is always necessary in order to comport with the letter and spirit of § 125 of the D.C. Appropriations Act, 2000. VI-55. See 31 U.S.C.A. §§ 1341-1342 (West 1983 & Supp. 1999). VI- 56. See D.C. Law 14-36, Campaign Finance Amendment Act of 2001, effective October 13, 2001, which prohibits the use of District government resources for campaign related activities. VI-57. See Legal Framework Section of this report for further discussion regarding this issue. VI-58. In his recent Mayor's Mem. 2002-1, entitled "Rules of Conduct Governing Donations to the District Government," the Mayor has formally set forth the policy that if a government employee fails to follow the rules when soliciting or accepting donations on behalf of the District government, then he/she is acting outside the scope of official activity, thereby exposing 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-a. Jones was not present at this meeting. VI-b. According to Daniel RIM, an employee with the D.C. Lottery and Charitable Games Control Board (DCLB), JONES asked him to prepare programs for the Vinson Reception. (JONES denied this in his interview and instead claimed that TUCKER made the request.) RIM stated that TUCKER provided him with the necessary materials and that he prepared the programs at an office located at the EOM with TUCKER's assistance. However, RIM indicated that the programs were never distributed because they were not completed in time for the event. VI-c. Section 501 (c)(3) of the U.S. Internal Revenue Code of 1986 (I.R.C.) provides tax-exempt status for non-profit organizations with charitable missions. See 26 U.S.C.A. § 501 (c)(3) (West 1988 & Supp. 1999). VI-d. The authority to do so should be determined through a legal review conducted by OCC. VI-e. As was the case, for example, with the Prayer Breakfast, which was funded by solicited contributions channeled through a non-profit organization, the Church Association for Community Services (CACS). See Prayer Breakfast/Economic Development Conference Narrative. VI-f. While the Mayor fails to mention other EOM employees in his interview, it may be implied from his statement that his informal delegation was extended to subordinates of Dr. OMER and JONES to carry out their official fundraising activities. VI-g. See Legal Framework Section of this report for clarification regarding this issue: VI-h. We note that the Mayor has determined in his recent Mayor's Memo. 2002-1, entitled "Rules of Conduct Governing Donations to the District Government", that a 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, exposing 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-i. ARNOLD, too, may have abridged the DPM § 1803.2 in that she accepted and/or solicited an item of value from POLLIN, whose business is regulated by the District government. VI-60. See Mayor's HOOP Corner narrative for further details regarding this program. VI-61. See Church Association for Community Service narrative for further details concerning the Mayor's year 2000 Prayer Breakfast and Economic Conference. VI-62. Section 501(c)(3) of the U.S. Internal Revenue Code of 1986 (I.R.C.) provides tax-exempt status for non-profit organizations with charitable purposes. See 26 U.S.C.A. §501(c)(3) (West 1988 & Supp. 1999). VI- 63. See Church Association for Community Service narrative for details regarding JONES' relationship with EFG. VI-64. Terence GOLDEN is currently the Chairman of the Federal City Council and a former chief executive of Host Marriott Corp. VI-65. UAF did not have a Charitable Solicitation Registration Form (license). Consequently, if the UAF solicited in the District it would be in violation of D.C. Code §2-703(a) (1994 Repl.) (Soliciting without a License) and 16 DCMR §1303.4 (Proof of Exemption). |
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