PlaceHolder? With 12 years' experience prosecuting public corruption at the Justice Department, U.S. Attorney Eric Holder was a perfect choice to clean up a corrupt city. But after three and a half years, he may be moving on, and D.C. is still one of the most crooked cities in the nation.

Eric Holder

When President Bill Clinton tapped Eric Holder to be U.S. Attorney for D.C. in 1993, he immediately became the District's black sheriff in the white hat. The first African-American ever to hold the job, Holder's appointment broke a stretch of 12 years of white Republicans overseeing the predominantly black city. Not only was Holder representative of the city's majority population, but the former D.C. Superior Court judge had gone straight from Columbia Law School to the Justice Department's public integrity section, where he had spent 12 years successfully prosecuting corrupt public officials. Many people in the District were thrilled; Holder arrived with both exceptional qualifications and the moral authority to crack down on public corruption without the taint of racism that derailed his predecessors.

Up to that time, the city's relationship with the U.S. Attorney's office had been an awkward one. During the 1980s, the city watched as former U.S. Attorneys Jay Stephens and Joseph diGenova went after Mayor Marion Barry and his cronies only to be thwarted by juries that saw their prosecutions as politically and racially motivated crusades aimed at bringing down a popularly elected black mayor. Not only did Barry prevail in court, he came back and then some, reclaiming his old job in 1995. In spite of his history of personal malfeasance, a majority of city residents were willing to give Barry the benefit of the doubt. But many drew confidence from the fact that when Barry moved into 1 Judiciary Square, Holder would be a block away, looking over his shoulder. Holder seemed like a gold-plated insurance policy promising that Barry wouldn't get one over on the city. After all, Holder knew as much about prosecuting corruption as Barry seemed to know about perpetrating it.

After three and a half years on the job, Holder is still revered in the city's halls of power and widely respected by his peers in the legal field. He is the presumptive nominee to replace outgoing U.S. Deputy Attorney General Jamie Gorelick, a major plum position. He is infinitely qualified by all accounts, and his appointment would be a historic one, since the position has never been held by an African-American. But for all the love Holder has engendered in the community as U.S. Attorney, he has had precious little impact on the city's endemic municipal corruption. Barry has returned to his old tricks, nudging contracts and city jobs to old cronies and new girlfriends. Holder is apparently leaving, and he hasn't thrown a punch.

It isn't for lack of targets. Since Holder was sworn in on Oct. 16, 1993, federal investigators have opened at least a half-dozen major probes of District government fraud and corruption, including investigations of allegations that:

in 1995 Cora Masters Barry arranged to launder campaign money through the 17-year-old son of her housekeeper to pay cash to her brother Walter;

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in 1995 Korean businessman Yong Yun performed renovation work on the Barrys' house in exchange for a sweetheart deal on a city lease;

last year the police department subverted city procurement regulations to give former members of Barry's security detail city contracts to install a fence and security system at Barry's home;

the directors of IPACHI, a now-defunct nonprofit group, misappropriated more than $1 million in federal and District money;

the executive director of JMC Associates Inc., the bankrupt mental health contractor, used money from city contracts and the Social Security benefits of mentally ill clients to buy fur coats, wedding dresses, and a condo on Martha's Vineyard;

the 27-year-old director of Kedar Day School misappropriated city money intended for educating special-education students;

and that employees of the lottery board were running businesses out of the board's office and steering contracts to friends of the mayor.

Not one of these cases has resulted in an indictment so far. And the list doesn't reflect a sickening array of other government-related wrongdoing during Holder's watch that seems to have gone unpunished, including voter fraud, allegations of widespread corruption at the taxicab commission, allegations of rampant bribe-taking in the Department of Consumer and Regulatory Affairs, and dozens of reports of graft within the public schools.

Holder, whose sheriff's badge was forged by taking down corrupt public officials, has not had a single high-profile D.C. public corruption case since he became U.S. Attorney. By comparison, during his 5-year tenure diGenova successfully prosecuted two deputy mayors and a dozen lower-level city officials. Holder may have had his way with the media and kept the community at bay, but now that he seems to be moving on, people are wondering why he isn't leaving behind a more honest, or at least more chaste, D.C. government.

"There has not been aggressive action on corruption in the District government, for sure," says government watchdog Dorothy Brizill.

Former D.C. Councilmember William Lightfoot agrees that some bad guys in government have had their way during Holder's tenure. "Given the public perception of corruption in the D.C. government, you'd think there'd be more prosecutions," he says, adding charitably that maybe the city just isn't as corrupt as people think.

Just because Holder's office hasn't produced any indictments in these cases doesn't mean they won't be coming eventually. But the lack of any visible prosecution has people wondering why Holder hasn't lived up to all the hype about his credentials. More importantly, they worry that by not prosecuting cases quickly, he has reinforced D.C. government's reputation as a culture without consequence.

Former D.C. Auditor Otis Troupe is willing to wait and see, to a point: "He came into his job with a mandate for reform, and in that sense his job is unfinished. I hope he is just biding his time. He's a homeboy. He has reason to know many of the city's structural problems. If all he's doing is taking his time, more power to him. But I haven't seen too many cases."

Although corruption cases take a notoriously long time to put together, it's important to remember that Holder had a running start—he was on the District scene long before the control board, current D.C. Inspector General Angela Avant, or Virginia Rep. Tom Davis and his rabid Republican colleagues. With responsibility for 21 different law enforcement agencies and more resources than any U.S. Attorney in the city's history, Holder has had the firepower to clean house. Yet District public officials continue to be unaccountable. "No one ever makes the bad guys pay back the money," says Troupe. "If you don't mind a little embarrassment in D.C., you can steal to your heart's content."

The perception that Holder is not doing enough to prosecute D.C. government-related crime has developed at a critical time. The feds are finally addressing some of the structural inequities that have contributed to the District's bankruptcy, but they are loathe to push resources into a city where government corruption is a daily fact of life. Congress, the president, and the control board want assurances that the malfeasance is at an end, and in spite of Holder's popularity in all those quarters, he hasn't produced many visible results to demonstrate that he is on the case.

"I know there's a lot that's under investigation, but it seems to be taking an inordinate amount of time," complains Ward 3 Councilmember Kathy Patterson. "It's so critical that a line be drawn in the sand that says, 'Beyond this point is not acceptable behavior by city officials.'"

She points to statistics provided by Avant: Between December 1995 and January 1997, Avant referred to Holder's office for criminal prosecution 14 cases that stemmed from audits conducted by her office. According to Avant's testimony before the D.C. Council last week, the U.S. Attorney accepted only eight—of which two are still under investigation and six are still in "grand jury status," meaning that grand juries are reviewing evidence but no one has been charged.

Patterson says that while the control board can fire corrupt employees and veto inappropriate contracts, that won't do much to change the culture that has allowed graft and fraud to fester unchecked for 20 years. Patterson believes that to send the right message Holder needs to use his prosecutorial power to hold the guilty parties responsible.

"If I were his career counselor, I would advise him that he's got to build a résumé in this job before he moves on," says Patterson. "If [Holder] left tomorrow, I don't think the D.C. government would be any stronger for his having been there. There comes a time when you have to say, 'What's your track record?'"

Sitting on the dark brown leather couch in his airy fifth-floor office near Judiciary Square last Friday, Holder is harried and responds to questions about his record with an uncharacteristic prickliness. It's an unusual position for Holder, who usually gets kid-glove treatment from local media outlets. He says he's just having a bad day, but the usually amicable U.S. Attorney is visibly peeved at the suggestion that he has not made public corruption a priority of his job.

"It's clearly a priority. I mean, I have a background in public corruption prosecutions. I worked for 12 years at the public integrity section, and that's certainly one of the things I've tried to emphasize since I've been here. I'm not at all certain that it's accurate to say that we have not had any significant corruption cases since I've been here," Holder insists.

He ticks off a short list of cases his office has prosecuted while he has been there. "Certainly, the Dirty Dozen occurred while I was here," he says, referring to the 12 police officers caught up in an FBI sting operation in 1993 for bribery and other drug charges. "There was the housing case involving the sale of Section 8 authorizations, and there are other things in my mind that I think about our public corruption section and the work that they've done on the local side. So I'm not sure there's anything we have to apologize for, or try to defend. We've been as vigilant as we've ever been."

Noticeably absent from the list, though, are the names of any recognizable public officials—namely Barry or other people whose names have come up in news reports about graft in the city government. In fact, most of the big cases Holder mentions were the results of undercover operations that began long before he became U.S. Attorney. "It may be that the cases that we have brought are not as high-profile in the sense that they are people more directly related to the mayor or the mayor's office," Holder admits. "But again, I'm not at all certain that is, in and of itself, a fair measure of whether we have been as active in the local

corruption area as we have been in the past."

Holder is in the admittedly unenviable position of trying to defend his record without compromising ongoing investigations. "Where stories appear in the newspaper, that oftentimes generates investigations in this office that, frankly, we don't talk about," Holder says. "There have been a substantial number of significant cases that we're looking at right now, and several of which I believe will probably result in indictments." He adds, "It's wrong for people to think that the only measure of success in our corruption efforts is whether this office returns an indictment of the mayor."

He has a point. It is not his job to rid the city of Barry. Previous U.S. Attorneys who took that view were ultimately unsuccessful anyway. Any legal assault on Barry or his cronies would have to pass muster with a jury composed of D.C. citizens, the same people who elected Barry to his fourth term by a wide margin in 1994.

The New Yorker recently interviewed Holder about his views on modern juries. In particular, the story asked him about holdout jurors, jurors who have handed his office 11-to-1 mistrial rulings in drug cases that should have been open-and-shut. In the interview, Holder sounded frustrated with D.C. jurors, and his comments contributed to a sense in the legal community that Holder is gun-shy of District juries, at least when it comes to the mayor. As one of Barry's lawyer-cronies put it recently, "Even if Marion were caught drunk with Mother Teresa, he'd still win 24 percent of the vote."

Holder looks somewhat annoyed and tired of having to deal with the Barry jury question. He says people draw far too many false assumptions from Barry's drug trial, just as they do from the O.J. Simpson case. He bristles further when asked if his approach to Barry and other city political figures are colored by the colossal flops of his predecessors in bringing these cases before D.C. juries.

"I wouldn't characterize my frustration with D.C. juries—which, by the way, is a phrase I cannot stand because I think there is a racial implication there that I don't think is warranted," he says. "My frustration was with individuals who frustrate the process...but it has nothing to do with our reluctance to bring cases. I think the reality is that people in this city, in a public corruption context, if presented with sufficient evidence, will convict public officials. I don't think there's any question about that."

Former D.C. Corporation Counsel Fred Cooke and others have suggested that Holder is running a low-key office because he wants to keep his head down so that he can get in line for a federal judgeship. While New York City mayor and former prosecutor Rudolph Giuliani used indictments as a way of getting headlines and winning voters, he never actually convicted many people in court. But Cooke says Justice Department jobs or seats on the federal bench are won by keeping an even keel, doing a respectable job, and not ruffling too many feathers by taking risks—like, say, prosecuting Marion Barry.

Holder is insistent that his prosecutorial decisions are in no way formulated to advance his career. "I didn't come into this job thinking that one of the job requirements was that I was going to prosecute Marion Barry. The expectation is that I'll do the right thing, that I'll be aggressive in dealing with corruption matters and violent crime matters. And I think that we have been."

Suddenly on the defensive, Holder bears down further on a question he clearly sees as insulting. "I want to make clear that the decisions I've made in this office with regard to what I've said about any issue, any speeches I've given, any prosecutive decisions I've made, have absolutely nothing to do with furthering my career."

Serving as the U.S. Attorney in the District of Columbia has always been a tough gig. Appointed by the president, the U.S. Attorney is responsible for prosecuting not only federal crime but local crime as well, which is normally handled by elected district attorneys in other states. Like the District itself, the office has been subject to the whims of presidents who've used it to further their own political interests. And even before the earlier Barry investigations, the U.S. Attorney's office had long been accused of remaining aloof, hostile to District residents, and uninterested in the grungy work of maintaining municipal law and order.

Holder set about to change that. Paying nightly visits to churches and advisory neighborhood commissions, he focused attention on raising the office's community profile and on beefing up local law enforcement. He took office toward the end of Mayor Sharon Pratt Kelly's administration, which, however troubled, gave the impression that some of the chicanery that had occurred under Barry had subsided. As a result, Holder was able to concentrate on communing with the community—his potential jury pool. He managed to go a year and a half without confronting the question that has dogged every U.S. Attorney for the past 16 years: What are you going to do about Marion Barry?

But when Barry was re-elected in 1994, Holder's job changed in a fundamental way, whether he admits it or not. In addition to the long list of responsibilities for criminal matters, in 1995 the U.S. Attorney became The Guy Who is Supposed to Watch Barry. In any normal city, Holder and the mayor would be natural allies, working to coordinate local law enforcement activities. But Barry's prior jacket—the two FBI drug probes, the three indictments against his friends David Rivers and John Clyburn, and his spectacular television appearance at the Vista Hotel smoking crack—pretty much precluded that. Yet Barry's short tour in prison didn't really change his way of doing business—greasy contracts still abound, tit-for-tat favors are still the rule.

Early in Barry's 1994 mayoral campaign, allegations surfaced that his campaign committee was illegally coordinating spending by the Washington Business Political Action Committee (PAC). The PAC had raised $500,000 and was spending the money in support of Barry, whose own campaign was barred from taking any contributions over $100. Community activists Marie Drissel and Dorothy Brizill documented dozens of irregularities that suggested that the campaign was flouting campaign finance regulations. After Barry was elected, those charges were shunted aside by the Office of Campaign Finance, Barry's campaign was minimally fined, and Barry went on with business as usual.

Allegations of fund-raising shenanigans are routine in District politics, but in April 1995 the U.S. Attorney's office was all but forced to confront the morass of Barry's campaign finances when the Washington Post reported allegations that Barry's wife Cora had used a check from the PAC to funnel money to her brother. According to the Post, the Washington Business PAC wrote a $2,000 check to Darin Mouring, the son of the Barrys' housekeeper Barbara Mouring. According to the Post, Cora Barry instructed Darin to cash the check and hand the money over to Walter Masters outside a Riggs Bank branch. PAC records showed that the check was for voter registration work, even though campaign workers told the Post they'd never heard of Darin Mouring.

After the Post confronted Cora with Mouring's allegations, Mouring said Metropolitan Police Department (MPD) Detective Ulysses Walltower and other members of Barry's security detail threatened her and offered her a job in exchange for retracting her story. The following day, Barry crony Korean businessman Yong Yun offered Mouring a job in the presence of a Post reporter as an inducement to change her story.

Shortly after the story broke, the U.S. Attorney's office issued a flurry of subpoenas for the PAC's financial records and other documents, and Barbara Mouring testified before a grand jury. But that was the last time she ever heard from city prosecutors. Meanwhile, 17-year-old Darin was gunned down on a sidewalk last year. Despite solid evidence to the contrary, plenty of people in the city believe Darin was assassinated to keep him quiet. Their suspicions have been fueled by the fact that two years after he and Barbara told their story, not a single criminal charge has been filed in the case.

While the Mouring story hasn't sent anyone to jail, it did set in motion what has become a 2-year investigation into Barry's relationship with businessman Yun. After Mouring's allegations aired, the Post reported that Yun had another interesting connection to the mayor. In 1990, before Barry left office, the city finalized a lease for a building Yun owns on Martin Luther King Jr. Avenue in Anacostia. At the time Yun obtained the $6.5-million, noncompetitive lease, the building was still in the blueprint stage. After several alterations, the lease now provides Yun with $17.6 million over 20 years, according to the Post.

At the time he was finalizing lucrative changes in the lease with the city, Yun was personally overseeing renovations on Barry's house in Ward 8. According to a July 1995 Post story, Yun paid for improvements on the Barrys' house, which were so extensive that the house was practically rebuilt from top to bottom over a 15-month period. In January 1995, while Yun was supervising work on the house on an almost daily basis, the Barry administration agreed to pay him $770,000 for design changes on the Anacostia office building, and six weeks later Yun started getting rent payments on the then-empty building, according to reports in the Post.

City personnel regulations prohibit public employees from taking gifts from people doing business with the city, but the penalties are only administrative. So according to the Post, the U.S. Attorney's office assembled a task force of 10 experienced investigators from the local FBI white-

collar crime division, and a handful of detectives from MPD's internal affairs department to determine if Yun's work on Barry's house constituted an illegal gratuity—a tip for past or future favors from the mayor. The task force investigation went on for 10 months, and by February 1996 the Post reported that prosecutors were preparing to bring witnesses before the grand jury. But there have been no indictments, and two years after the first story broke about Cora Barry's alleged money-laundering scheme, the federal investigation is still ongoing. The only recent public development in any of the Barry-related cases has been Holder's announcement last month that Walltower is no longer part of any investigation.

There has been more. Days into Barry's fourth mayoral term, the Post reported that contractors were building a brick-and-wrought-iron fence around Barry's house without a building permit and with donated labor and materials. The Post's later April 1996 story showed that former Barry security officers were performing nearly all the city-funded security work at the house, which at Barry's request was being supervised by Walltower.

The Post story showed that MPD used a web of fake documents to subvert the contracting process and deliver city money to Barry's former police allies. Most of the documentation for the project was submitted to MPD well after the work had already been done.

Holder's failure so far to charge anyone in these three Barry-related cases has only reinforced the public's—and Barry's—belief that the mayor is untouchable. In fact, last September, in an amazing act of hubris, Barry submitted legislation to the D.C. Council to give Yun a $235,000 tax break on his building in Anacostia.

The Post stories on the renovation sent a clear message that while Barry may be clean and sober he hasn't cleaned up his act. Troupe doesn't understand why the investigation is taking so long. "It shouldn't be a real difficult case to make. They've got the lease; they know [Yun] did free work on the house. What else does it take? People have a right to wonder what happened to those cases," says Troupe.

But prosecutors and white-collar defense attorneys alike say that public corruption prosecutions are not as easy as they look, especially in the District, where they say the city's record-keeping system is custom-built for corruption, and paper trails frequently peter out.

"Sometimes these investigations can go on forever," says Reid Weingarten, a former Justice Department colleague of Holder's who now represents criminal defendants in private practice. "Maybe they're using cooperation in ways you don't know. Simply because it's going this long isn't reason enough to assume nothing is happening."

Former U.S. Attorney diGenova says hindsight leaves him inclined to agree. "Public corruption cases are very difficult. We had people frustrated with us, too. You can't bring a case before it's time," says diGenova. His own cases against Barry colleagues Rivers and Clyburn were the product of a 17-month undercover probe by the FBI.

It doesn't help that Holder's office is also unbelievably tight-lipped, which gives the impression that nothing is going on when in fact there may be a whirlwind of activity away from the view of the public.

"I think that one of the things that's both good and bad about the way Eric is running that office is that there are precious few leaks [compared to prior U.S. Attorneys]," says Cooke, who represented Barry's 1994 campaign. Even so, Cooke doesn't think the office has a case on Barry, because if it did it would have brought it by now.

Holder may be media savvy, but he doesn't play politics with indictments.

"It's hard to talk about these things, because you can't talk about pending investigations," says Holder. "There are right now a number of very significant investigations involving local political and administrative figures that we don't talk about. It's not fair to the public official to discuss those things unless there is an indictment, and if there is an appropriate time for me to hold a press conference or to otherwise discuss those matters I will."

In the meantime, both investigation targets and their victims are left to wonder. Legal observers suspect that prosecutors dropped the original campaign finance fraud case involving Cora Barry long ago because of Barbara Mouring's "credibility problem." Mouring has a criminal record resulting from being charged for stealing from another employer.

And while the Yun case may seem like a slam dunk, it is not as easy as it seems. The reading public may make the obvious connection between Barry's house renovations and Yun's lucrative lease, but in a courtroom the government must prove that Barry or his wife actually made a deal with Yun and that the lease and the house renovations aren't just a coincidence. The bribe can't be implied. Circumstantial evidence—like the fact that the Barrys paid for some of the work on the house after it came under investigation—helps, but the government ideally would produce an insider, someone who had been party to the deal, as a witness for the prosecution. The ideal witness, of course, would be Yun himself, but so far he doesn't seem to be talking.

The delays in the investigation may be legitimate and unavoidable, but they aren't without consequences. Prosecutors and criminologists often talk about the need for swift and certain punishment if the criminal justice system is to have any deterrent effect at all—and that applies to government crime as well. The lack of indictments in the cases swirling around Barry only bolster the image that the District is a lawless city. And why wouldn't they? The man who was ultimately in charge of overseeing Barry's home-security work, Larry Soulsby, is now chief of police. And Walltower is in trouble again after two sergeants in the city's gang task force accused MPD officials of asking them to fake Walltower's time sheets. Yun, meanwhile, is still cashing city checks for his building in Anacostia.

Holder's spotty record on D.C. public corruption hasn't stopped the media from sucking up to him at every opportunity. The Post is full of stories about Holder's community mentoring projects and his tough new crackdown on domestic violence (without mentioning that the office has had one of the nation's worst records on that front, according to Legal Times). Last February, in one of many editorials the Post has written sounding the Holder-for-mayor drumbeat, Colbert King wrote, "Holder doesn't abide greed and self-interest in public officials. He rejects the idea that there is an acceptable level of corruption. A Holder administration probably wouldn't tolerate someone who says with contempt, 'Hey, arrest me' when confronted with wrongdoing."

Funny thing, though. The person King was referring to was former D.C. taxicab commissioner Karen Jones Herbert, who was forced to retire last year after Washington City Paper reported that she was not a District resident, as required for cabinet-level city jobs. Herbert lives in Temple Hills, Md., according to property-tax records there, and when the Post confronted her with evidence that she illegally held driver's licenses in both Maryland and D.C., she proclaimed, "Hey, arrest me."

Ward 8 activist Sandra Seegars wishes Holder had taken Herbert up on the challenge, because even though Herbert was not a District resident, she voted in the 1995 Ward 8 special election, which was decided by a single vote. Fraudulently registering to vote and casting a ballot in the District is a felony, according to the D.C. Code, and it's punishable by up to five years in prison, a $10,000 fine, or both. When Herbert couldn't prove her District residency, the board of elections dumped her from the voter rolls. Nonetheless, Herbert boldly re-registered and voted again in both the D.C. primary and general elections in 1996. After a challenge from Seegars, the board dropped Herbert from the rolls again a few months after the election.

Despite Herbert's three well-publicized votes, Holder's office never charged her with a crime, even when one of her votes was cast while she was a public official. "Why did they let her keep voting? When they don't get the little ones, they let the big ones go, too," Seegars laments. "[Holder's] just a good ol' boy....He's part of the problem."

While he's usually quick on his feet and full of snappy comebacks, Holder squirms uncomfortably when confronted with Seegars' question about Herbert. "I have to be careful with this. I'm not sure how I'd respond to that other than to say...we have to look at the other cases as potential prosecutions and then decide how we are going to use our resources.... Well, let's just put it like this: I'm not at all certain that that's a closed matter in my mind."

The matter may not be closed in his mind, but it is most certainly closed in the minds of District residents, who can now retain Herbert's legal services to represent them in D.C. Superior or U.S. District court, not far from Holder's 4th Street office. Seegars asked the D.C. Bar to discipline Herbert for her transgressions, since lawyers are required to abide by the law in order to practice it, but the D.C. office of bar counsel decided not to sanction her.

There are other compelling cases that seem to be languishing in Holder's office. The Information, Protection, and Advocacy Center for Handicapped Individuals (IPACHI), the nonprofit advocacy group that self-destructed in July 1995, provides a particularly vivid example. Barry tapped IPACHI in 1979 to keep tabs on community residential facilities for the mentally and physically disabled as required by federal law. Eighty percent of its budget came from D.C. contracts. The group was politically connected to Barry through its executive director, Yetta Galiber, who hosted a fund-raising tea for Barry's third wife Effi after Barry was arrested for drug possession. Galiber was famous for hosting the annual Christmas Toy Store on local television, where poor children were given fake money to "shop" for donated toys.

Aside from the Christmas store, the group maintained a low profile, mostly because it never did much of the work required by its federal and District grants. Instead, IPACHI functioned largely as a cash cow for Galiber's family, many members of which were either given contracts with or jobs at IPACHI. Galiber herself ran an Amway distributorship out of the office. When she got ready to retire, Galiber demanded that her hand-picked board of directors (which included herself) reward her for her 20 years of distinguished service with a car and a $500,000 pension. Of course, she had never contributed any money to a pension fund, and federal officials told IPACHI that the pension plan would be illegal because none of the other staffers had pension plans. Nonetheless, in 1991 Galiber retired in style to the U.S. Virgin Islands and in 1993 received two $50,000 retirement payments.

She left the group in the hands of Vivian Hardy-Townes, a woman with no legal background or experience. Hardy-Townes took over just as Mayor Kelly took office. Kelly's administration promptly cut off several of IPACHI's noncompetitive contracts, and by late 1994 the agency was in serious financial trouble. In early 1995, employees' payroll checks started to bounce, and they discovered that management had been deducting for health insurance, retirement, and employment taxes from employees, without forwarding any of those funds to the appropriate agencies.

IPACHI finally closed its doors that summer, and federal investigators from the U.S. Department of Health and Human Services (HHS) began looking into IPACHI's books. Last summer, the HHS inspector general's office forwarded the case to the economic crimes section of the U.S. Attorney's office for criminal prosecution. HHS discovered that even while the company was going bankrupt the executive director had used company credit cards for personal purchases at Saks Fifth Avenue and Victoria's Secret, and that other money had been put to questionable use. At the final tally, more than $1 million in federal and District money was unaccounted for.

Since then, the case has languished, with three different assistant U.S. Attorneys assigned to it. The first assistant was transferred to the homicide division; the second was assigned to another government theft case that had been put on the fast track. In that case, Pierre Yopa and Patricia Bapack, owners of Urgent Home Health Care Services Inc., were indicted for billing Medicare and Medicaid for home-nursing visits they never provided. The pair netted $100,000 from the scheme. The case was tried and sentenced within a year of the IG's office opening its investigation. Both defendants were found guilty of conspiracy, false claims, and mail fraud. In December, Bapack was sentenced to 27 months in prison and ordered to repay $72,000. Yopa absconded from a halfway house shortly before sentencing and hasn't been rearrested.

It seems like a good case, and undoubtedly it should have been prosecuted. The question is why a case like IPACHI, in which far more government money disappeared, didn't warrant the same kind of attention. "They hate to pull the trigger, and I don't know why," says one person familiar with the investigation. "With the IPACHI case, there's so much jury appeal."

One of the people waiting for Holder's office to produce an indictment is Linda Jones, a former IPACHI employee. The group owes her $3,000 for bounced payroll checks. She has a disability, and for her $3,000 is money that could mean the difference between making rent and hitting the street. She has filed claims with the U.S. Department of Labor only to be told that labor officials won't act until the U.S. Attorney does.

There was no shortage of victims or perpetrators in two other cases that came up in 1996. JMC was the kind of case that probably caused more than a few readers of the morning paper to choke on their coffee. JMC was a mental health contractor that was forced into bankruptcy in March. Bankruptcy trustees discovered that JMC's chief executive, Carla Burrell, had borrowed massive amounts of money from the company and bought a house on Martha's Vineyard, plus fur coats and other luxuries. According to the trustees' lawsuit against her, Burrell also used company money—money from D.C. coffers—to pay for her wedding and that of her sister, booze for personal and noncorporate use, and equity in Minority Golf magazine.

City Paper reported last May that Burrell allegedly used Social Security money belonging to the 300 patients under JMC's care to keep the company running. Meanwhile, JMC was stiffing landlords who housed the mentally ill clients, even though JMC was still billing the District for the rent. The FBI began interviewing people familiar with the case last spring, but so far Burrell has never been called before a grand jury. The Social Security Administration recently wrapped up its audit of JMC's files and will be presenting the information to prosecutors soon.

The way Jeffrey Robinson ran the Kedar Day School seemed distinctly similar to the way Carla Burrell ran JMC, only he got caught a lot earlier. In 1995, when the city gave the 27-year-old Robinson a contract to run a school for emotionally disturbed teenagers, his only qualification was that he had been a special-ed student himself. According to the Post, Robinson got an $875,000 city contract for the school with help from a school board member and a school administrator with whom he had a "social relationship." However, not only did he have no education credentials, he also didn't have a building, staff, or money to run a school. He did have a misdemeanor conviction for carrying an unregistered gun and an $87,000 debt to the IRS, however.

When the school finally opened, school system officials visited Kedar one day to find that the school had no teachers, no students, and no books, according to an account in the Post. Meanwhile, Robinson was living in style at the tony downtown Lansburgh building. He drove a black Mercedes-Benz and collected a $50,000 salary from the school while he ran an insurance business on the side. The school system canceled the contract in May 1996, and the FBI opened an investigation into what happened to all the money. The case is reportedly continuing.

Given how recent the revelations were about JMC and Kedar, it might be premature to add them to the list of cases that have eluded Holder's notice. But it's worth wondering about all the public skullduggery that never made the papers. No one who knows the District government doubts that the famous cases are just the tip of the iceberg. The contracting process in the District seems a veritable gold mine for aggressive prosecutors. Councilmember Patterson observes with exasperation, "At this point, I almost don't care what case goes forward. I just want it to be a high-profile case."

Bill Lightfoot has questions about Holder's priorities as well. Before he left the council in December, Lightfoot was clamoring for a crackdown on the taxicab commission. People in the industry estimate that at least half the cabs on the street are driven by people with fake hack licenses. They know this partly because in 1992 the commission's chief operations executive, Ronald Stokes, was suspended when MPD internal affairs—which investigates allegations of wrongdoing by city officials—was tipped that Stokes and his subordinates were allegedly selling fake licenses.

Stokes was transferred to the Department of Consumer and Regulatory Affairs, where he stayed until he retired, and nothing came of the case. The taxicab corruption furor died down and became part of city lore until last spring, when current commissioner Novell Sullivan came before the D.C. Council for confirmation hearings. He was accused of having sold attendance and certification cards in his taxi class at the University of the District of Columbia. The cards would allow would-be hacks to get licenses without knowing, say, how to drive or speak English. (Sullivan denied the charges and was confirmed by the council.)

Nonetheless, Louis Richardson, vice president of the D.C. Professional Cab Drivers Association, says corruption in the cab industry is so bad, from insurance fraud to fake licenses, that he wrote a letter to Attorney General Janet Reno last summer asking for a formal investigation by the Justice Department. Under Stokes, the commission had already been the subject of a lengthy undercover investigation, but Richardson and others say that because of political pressure all the internal affairs officers who worked on the case retired or were transferred, and the case never went anywhere.

Lightfoot has tried to get the U.S. Attorney to do something about the taxicab commission, but he says Holder told him that his office won't pursue the allegations. "He didn't say why," says Lightfoot.

Holder says Lightfoot's interpretation is not accurate. "I met [personally with] people involved in that matter, and lawyers in this office examined those allegations very carefully. We took what I think was appropriate action there. All I can say is that we look at these cases, and if there is a way we can criminally prosecute we certainly would.

"On the other hand, we can't bring cases where we don't have a basis for bringing them. If there are evidentiary problems that make a prosecution unwinnable applying the Justice Department standards, we can't bring those cases. [The taxicab commission] is obviously an area that we would be interested in working and developing cases, and if we had the possibility of doing that we certainly would have done it."

Holder's official circumspection roughly translates as "the taxi cases won't hold up in court," but there are plenty of other areas in D.C. government that are ripe for a cleanup. You could start with the the lottery board, which the FBI was investigating early last year for contract irregularities and reports that people on staff there were running businesses out of the lottery offices. Then there's the Department of Consumer and Regulatory Affairs, which has reportedly degenerated to the point that the only way D.C. businesses are getting work done is by greasing the palms of the inspectors and permit officers. And Troupe says that D.C. public schools certainly have their share of dirty little secrets. "The last four years of revelations about the D.C. public schools. Tell [Holder] to take his pick. There's plenty of work here for an aggressive prosecutor," says Troupe.

Holder can hardly be blamed for not having perfect knowledge about every scam involving public dollars in the District, but Seegars says that even when she has gift-wrapped information about specific criminal acts, she hasn't gotten action out of Holder's office. "They want a perfect case. But there's no such thing as a perfect case," she says. Seegars predicts that if the cases don't go anywhere soon, as the 1998 mayoral elections heat up, "Barry will cheat and win and do it again, because he knows he can get away with it."

Both Troupe and Seegars believe there is value in pursuing corruption cases to trial, even if prosecutors aren't sure they will win, because the trials provide a unique window onto what is normally a very closed environment. "The only thing that gets you to clean up municipal corruption is sunshine," Troupe says.

Last Friday, two women who work in Holder's office were bustling around the front office filing paperwork and attending to his long list of official business. One of them commented on the number of letters Holder was getting from citizens trying to get him to intervene on behalf of former deputy police chief Claude Beheler, who was forced to retire last week by Chief Larry Soulsby. One woman asked, "Can Eric do anything about police?"

No, explained the other woman.

"No? I didn't think so."

Holder can't do anything about a lot of stuff in District government, but that doesn't prevent people from asking. He is in the rare position of being an unelected person who is seen as honest, concerned, and powerful enough to make change. His efforts to reconnect to the community may be working too well. The complaints about Holder's public corruption record may be symptomatic of the impossible expectations his appointment raised among community members who saw in him great potential to fix all that ailed the city government.

Some prosecutors express their own frustration with a city that tries to use the U.S. Attorney to do the work of the personnel system. In a government where firing people is an impossible chore, attorneys say that they are often pressured by city officials to step up on employees, but that laziness and incompetence aren't criminal offenses.

Even some of Holder's critics understand how complicated the District's situation is. Lightfoot suggests that the U.S. Attorney's staff may just be stretched too thin. "When you consider the prosecutorial breadth of the office, it's staggering," says Lightfoot. "They investigate every police shooting. That's a state function, not a federal function. How can you do all of our stuff plus the work of the federal government? Their workload is huge. We're just low on the totem pole in terms of priorities."

Indeed, while the District's U.S. Attorney's office is the nation's largest, with more than 300 prosecutors in its ranks, more than two-thirds of those lawyers are assigned to D.C. Superior Court, where they prosecute local crimes such as homicides and drug offenses. The federal court division is responsible for a broad range of offenses, including all federal government corruption cases, like espionage, embezzlement, and bribery of public officials. Only 11 attorneys are assigned to handle public corruption in both the federal and local government. When you consider the size and historic venality of District government, they seemed outgunned.

Lightfoot gives Holder credit for focusing on low-level government corruption that doesn't make big news. He notes that the U.S. Attorney has been diligently prosecuting bad cops, correctional officers, and ticket-fixers at the Bureau of Traffic Adjudication. He says these cases may reflect a shift in emphasis away from the high-profile cases orchestrated by diGenova and Stephens, who hoped those big cases would have ripple effects. "They failed," Lightfoot says, adding that while Holder might take a hit for not taking on big cases, he's done a substantial amount of work to improve local law enforcement.

One veteran D.C. defense attorney believes that the city won't benefit from the big public corruption cases as much as it will from Holder's close attention to local street crime. "We wasted millions of dollars on the Barry thing, and for what?...Here we are, Barry is mayor again, and the only people who suffered for that case are the children of D.C.," she says.

Holder says that the office's public corruption section is not doing any less work than it did under Stephens. He argues that very little has changed in the way the office handles public corruption cases since he took office—most of the attorneys have been there longer than he has. One of Holder's staffers says public corruption prosecutions become personally associated with the guy on top even though the cases would proceed with or without him. So when a case like the Barry investigation drags on, Holder takes the blame personally.

But in the end, Holder will probably escape the District untarnished by Marion Barry. Even without any big corruption trials, in the final analysis, Holder will get what all the District's U.S. Attorneys get for their trouble here: a better job. Holder's three and a half years in the District have given him wings. He's likely to be flying on to the Justice Department soon, where the albatross around his neck will be replaced by one who looks quite a bit like Bill Clinton. Meanwhile, the District will be left with the same old cadre of crooks, a durable group who know that if they bide their time they can outlast just about any U.S. Attorney.

"You have your time in any job," Holder says somewhat apologetically. "You do the best you can while you're there, and if there is a reason to move on, regrettably, sometimes you have to do that without seeing a case to its end on your watch. That doesn't mean, however, that the case won't ultimately be resolved in a way that I think is appropriate. The people in this office are career folks, and regardless of who the U.S. Attorney is, they'll do the right thing."

Art accompanying story in the printed newspaper is not available in this archive: Darrow Montgomery.

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