Silent Partner

He's a “New York businessman” who owns a Jag, loathes the press, and seems to spend a lot of time out of town. But is that all there is to James Kelly, the mayor's stealth spouse?

Two years ago this month, Mayor Sharon Pratt Dixon sneaked off to Brookline, Mass., to marry her beau in a secret ceremony. After a brief honeymoon, the location of which she tried unsuccessfully to conceal, she returned as Sharon Pratt Kelly, with her new husband, James R. Kelly III, in tow.

Though James Kelly had been a background presence at many of his future wife's public appearances, both during the campaign and after, not much was known about him. He was said to be a New York businessman who had homes in Manhattan and Los Angeles, a former banker who had embarked upon a variety of entrepreneurial ventures, an inveterate Knicks fan who favored Jaguar automobiles.

Since the wedding, Kelly has attempted to maintain his discreet private-sector profile, no mean feat for a political spouse. He makes a point, rather ostentatiously, of spurning reporters. (He wouldn't talk at all to Washington City Paper, despite messages left at two of his companies and with mayoral spokesman Vada Manager.)

“I don't like press at all,” he told the Washington Post's Paula Span, who attempted to interview him for a June 1991 profile. “I'd just as soon keep my private life private.”


After the public blessing of the Kellys' union in February 1992, he also declined comment. “My wife's job is to do all the speaking,” he explained.

And at Fight Night '92, an annual schmoozefest for D.C. wheeler-dealers, he similarly spurned a Post reporter. “House rule,” he said. “My wife talks. I don't.”

Most reporters only need to be Kellyed once or twice before they give up. Washington Post Magazine writer Peter Perl was swatted away innumerable times as he researched his flattering profile of the mayor last year. “I tried to talk to him at several mayoral events and during a limo ride, but each time he responded with "no comment,' ” wrote Perl, “even when I asked him about a Redskins game.”

So publicity-shy is Kelly that when he organized a basketball league for more than 2,000 inner-city youths last summer, culminating with an August tournament, he hired a public relations flack to do the talking about it.

His friends are equally close-mouthed. “I wouldn't do that,” said Lewis Rambo, a Boston psychiatrist and business partner of Kelly's, when asked to talk about Kelly. “He's my friend, and it's none of your business.”

The mystery man has granted exactly one interview to a Washington newspaper, a less-than-hard-hitting chat with reporter Hamil Harris, then of the Washington Afro-American, around Thanksgiving 1992. Kelly's mission was damage control, and he attempted to rebut critics of his wife and rumors of marital discord.

“The attacks against Sharon were driven by a racist mind thought that says Black women can't do anything unless they have some man telling them what to do,” he fumed, lashing out at the unnamed critics as “White folks who are trying to define who we are.”

At the time, WOL-AM's Cathy Hughes and WRC-TV reporter Tom Sherwood had reported that the Kelly marriage was on the rocks. Hughes had relayed rumors that a domestic dispute had erupted into a violent altercation. James Kelly denied the reports, sort of, but admitted to Harris that he and the wife didn't spend much time together.

“Sharon has a job and I have a business, and we both have separate lives in some ways and we have our life that's private and that's nobody's business,” Kelly told Harris. “We work to keep it that way.”

“Based on her schedule, if we are able to cook dinner, watch television, or go to the movies, that is a treat,” he said, adding that the Kellys only enjoy such quiet domestic evenings about three times a month.

Although they almost never see each other, Kelly said, “we are one in the spirit and direction.”

They are one in purpose, as well. Their marriage represents more than the sum of its parts. It is the union of black politics and black entrepreneurship. The Kellys are a black-power couple in a sense never dreamed of by Eldridge Cleaver, a duo both politically and financially potent.

Even their friends have described the union in oddly political terms, as though James Kelly were some sort of key supporter. “When few people believed that Sharon Pratt Dixon could ever be elected mayor,” Ron Brown told the Washington Post in 1991, “Jim Kelly was absolutely convinced that she could be and would be.”

Now that she has been, and now that her mysterious, diffident boyfriend has become her mysterious, diffident husband, D.C. political junkies still can't figure out her enigmatic man. When he shows up with her at official events—when he's not in New York or Los Angeles, that is—he hangs in the background, “like Prince Philip back there somewhere,” his wife once said.

“He's kind of like a shadow,” says a District political observer with ties to themayor. “He's kind of there. Wherever you go, he's there in the background.”

“It is the strangest couple,” this person muses. “He won't talk, and you can't get her to stop.”

Friends and acquaintances confirm that Kelly is indeed capable of speech, but his silence nurtures a kind of mystique. “Kelly bears a likeness to Malcolm X,” wrote Washington Post reporter Mary Ann French, somewhat breathlessly: “the sandy hair, the glasses, the height, the quiet reserve.”

Yet for all his diffidence, James Kelly can't seem to keep his name out of the papers. On a number of occasions over the last two years, he has surfaced in connection with city business, campaign donations, and spending by the mayor's political action committees (PACs). The pattern indicates that James Kelly has assumed a central position in the mayor's network of friends, family, and favors. He shares the shotgun seat with his old friend Fletcher Wiley, an influential Boston lawyer and husband of the mayor's sister, Benaree.

“If you want to get anything done in this city,” says a D.C. business lobbyist, “you have to talk to Jim or Wiley.”

The center of things, or slightly to one side, is where a political spouse belongs, of course. Kelly has fulfilled some of the traditional aspects of his role, serving as gatekeeper, aide-de-camp, and admirer, while avoiding arrest or committal.

Well, not completely. Kelly was arrested in July at the U.S. Capitol, protesting for D.C. statehood. He was herded aboard a police bus with the other activists; his wife rode to the station in a squad car.

He performs such husbandly duties as recording the mayor's home answering-machine message and attending funerals on her behalf (that of Arthur Ashe, for example). At public events, he appears generally well-dressed and well-behaved, as a political spouse should, and is polite without being overly talkative.

He's no Barbara Bush, though. Kelly finds himself playing Rodham to his wife's Clinton. Like the first lady, the District's first man has extensive private-sector dealings. To what extent should his business activities be open to scrutiny? How independent are they from his spouse's office? For James Kelly, as for Hillary Clinton, these questions have been left unanswered.

But they're worth asking—more than once, if necessary. Where does his public life end and his private business begin? His own stance seems to waver. He would, as he's told the Post, “just as soon keep my private life private.” But when he's in town, which is about half the time, he spends many of those private moments in a city-owned car, driven by a city employee who waits as Kelly attends meetings, lunches, and, at least once, a golf tournament. (His Jaguar, with DC tag No. 3, must get lonely in the garage at home.)

Shortly after Kelly married the mayor, a plan was floated to give him an office in the District Building. Spokesman Manager defended the proposal at the time, saying Kelly had an official role “as one-half of the first couple of the District.” The idea was quickly dropped.

Office or no office, James Kelly's business career has always included a healthy political component. His friendship with Ron Brown is one example; his support for DavidDinkins is another. Since he began dating Sharon Pratt Dixon (in 1989, as he told the Afro- American), the ratio of politics to business has steadily increased.

Or it appears to have increased, based on the few dribs and drabs of information about Kelly's business activities that have leaked into the public record. As an entrepreneur, he leaves very few footprints: no press releases, no publicly traded companies, no lawsuits.

“He strikes me as the kind of businessman who runs everything out of his shirt pocket,” says one mayoral friend and Kelly acquaintance (a phrase that describes quite a few of the mayor's friends; not many seem to know her husband well).

His paper trail is virtually nonexistent. None of his assets or income appear on his wife's financial disclosure form, for example, not even the $110,000 city contract awarded last year to radio station WKYS-FM (93.9), of which Kelly is part-owner.

The mayor is required to disclose her ownership interest in any entity transacting business with the District government, and any income resulting from city business. A spouse's assets and income must be disclosed only if jointly held, an oversight reflecting outdated assumptions that a politician's spouse would be a housewife without independent assets or income.

Kelly's various corporations and ventures are as reticent as the man himself, sometimes failing to file required corporate documents with state and District authorities. The Millennium Group, incorporated in Massachusetts in 1990 with Kelly as president, has not filed annual corporate reports with the state since then, and is not in good standing, according to the Massachusetts Secretary of State's office.

Nor has the Millennium Group obtained a certificate of authority from the D.C. Department of Consumer and Regulatory Affairs, required by D.C. law of any out-of-state company that does business in the District. The Millennium Group's one and only office is located at 300 M St. SW. And finally, although the Millennium Group has sold thousands of dollars' worth of buttons and political trinkets in the District, to the Democratic National Committee and to Friends of D.C. (a statehood political action committee), the D.C. Department of Finance and Revenue has no record that James Kelly's company has ever paid D.C. business tax.

Kelly's company couldn't register here if it wanted to, because the name Millennium Group is already taken by a Georgetown firm. “We have a federally trademarked name,” notes Basel Dalloul, the president of that Millennium Group.

James Kelly himself, who lived in New York and Los Angeles prior to the marriage, is one of those out-of-state residents whom his wife is so eager to tax. He is registered to vote in New York, not the District, although the mayor managed to win election as Democratic National Committeewoman last year nevertheless. On a Federal Communications Commission (FCC) ownership document filed this year for WKYS, Kelly lists as his legal residence an apartment on West 49th Street in Manhattan. New York voter registration, on the other hand, lists his address as West 52nd.

Which brings us to another perplexing question: If he's going to pay extortionate local taxes, shouldn't he do so in the jurisdiction where his wife is mayor?

“That's a personal issue that only he can address,” says Manager.

Political marriages, particularly if they are second (or in his case, third) marriages, seem to whirl the rumor mill into a frenzy: He's gay, people say, or she's a lesbian, or both; they fight all the time (does she look like a happily married woman?); she's got a lover in Congress, or he's got a mistress in New York (or was it California?).

What is known for sure about James Kelly is this: He was born in the District on June 4, 1946, the son of a Baptist minister. His father later became a dean at West Virginia State College, a historically black school in Institute, W.Va. Kelly grew up in Institute and attended West Virginia State, but dropped out for reasons that are unclear (and which he has refused to discuss).

Out of school, Kelly was drafted into the Army in November 1966. He spent a year stateside before being sent to Vietnam in January 1968. He spent seven months there, first as a cook and then as a personnel specialist, before requesting and receiving a release so he could return to school. He went home to Institute, according to military records, but he never did complete his college degree. Military records list his education level as “High School Graduate,” with a specialty in “Food Service Course.”

At this point, Kelly's career track becomes cloudy. He told the Afro-American that his first job was with the Ford Motor Co., in industrial relations, after which he and a friend started a job-placement service for minority banking executives. After that, Kelly decided to become a banker himself, and went to work for First Pennsylvania Bank.

However, the Post's Span wrote that Kelly launched his banking career at Virgin Islands National Bank in St. Thomas, later moving to Vanguard National Bank on Long Island and Chemical Bank in New York. Adding to the confusion, a 1991 Village Voice piece describes Kelly as having been a “trainee” at the Long Island bank.

At any rate, Kelly in 1978 became a vice president at State Street Bank in Boston, one of its first minority veeps. There, he made many of his key associations and friendships. He met Fletcher “Flash” Wiley, who is now his lawyer, friend, and brother-in-law. He also met entrepreneur Bertram Lee, who would become his partner in several ventures. At the time, Wiley recalls, Kelly had already been married and divorced once, and had fathered a daughter named Khrys.

Kelly's two Boston buddies, Wiley and Lee, are flamboyant publicity-seekers. The Boston Globe called Wiley “one of the most famous party animals in the commonwealth.” By contrast, say Wiley and other associates, Kelly has always preferred the shadows to the limelight. One person who was involved in a transaction in which Kelly also participated says Kelly never showed his face; he was the silent partner.

Kelly moved to New York in the early '80s, and went to work for Continental Illinois Bank. He got married again, to an insurance-company lawyer. In late 1984, he went uptown to Harlem's Freedom National Bank, which had been founded by Jackie Robinson. Friends cite the move as an example of Kelly's social commitment.

“Most black professionals wanted to go work for a big bank,” says Ronald Homer, a longtime Kelly associate and chairman of the Boston Bank of Commerce. “To leave a comfortable downtown bank and go to work in Harlem—not a lot of people were doing that at the time.” But Continental Illinois had collapsed, spectacularly, in mid-1984, so Kelly was probably glad to escape.

Freedom National had its own problems, which would eventually result in its takeover by the Federal Deposit Insurance Corp. (FDIC) in November 1990. And some say that Kelly contributed to the bank's woes. A Voice investigation of Freedom's collapse charged that Kelly “played fast and loose with Freedom's loan portfolio,” a charge he has denied. After Kelly became chief loan officer in 1985, he made a series of loans to small- and medium-size companies, using only accounts receivable as collateral, according to the Voice. He also arranged a $400,000 loan to a neighbor, which was approved although the bank could not verify the neighbor's employment or income, according to the Voice. The loan went bad by 1986. Later that year, then-President Tab Buford dismissed Kelly for his role in that loan. Buford himself was deposed not long after.

To the Voice, Kelly accused Buford of “blam[ing] everything that happened on me, including his firing. One has to find a scapegoat.”

By the end of 1986, Kelly was on his own again. In a later review of Freedom's portfolio, bank President George Russell attributed many of the poorly performing loans to Kelly's tenure. The bank's failure will cost taxpayers $16.4 million, the FDIC estimates.

After weathering the corporate infighting that marred Freedom, Kelly apparently decided to go solo and embarked on a career of free-lance entrepreneurship. In November 1986, he and Lee formed Kellee Communications, a company that installs pay telephones in airports and convention centers. Kelly and Lee lent cachet to their consummately dull enterprise by installing on Kellee's board such black luminaries as Arthur Ashe—and Ron Brown.

The company's largest contract is a joint venture with AT&T to install and maintain some 1,350 pay phones in Los Angeles International Airport. The $12 million contract awarded by the city of Los Angeles in January 1989 required at least 20 percent of the venture to be held by a minority firm. (Another 12 percent is held by a female-owned concern.)

In 1988, Kelly and Lee teamed up with Brown in a bid to purchase the San Antonio Spurs basketball team. They would have been the first minority owners in NBA history, but their bid was rejected. Lee later purchased the Denver Nuggets with other partners; luckily, Kelly wasn't in on the deal, which soured when Lee failed to meet capital calls. By 1991 the partnership had collapsed, and Lee had been ousted from the Nuggets' front office and evicted from his Denver apartment.

Kelly, Brown, and Lee later teamed up with two other entrepreneurs to purchase Washington's WKYS from NBC for about $49 million in 1989. Their company is called Albimar Communications, named for a kind of brown shark with a white tip. All of the shareholders but one are black.

Once Sharon Pratt Dixon was elected mayor, James Kelly's business life drew nearer to—and subtly began to mesh with—the business of governing the city.

His old friend Fletcher Wiley became one of his wife's key advisers. Wiley is credited, for better or worse, with recruiting several unemployed Dukakis aides to work for the District, including Deputy Mayor for Finance Ellen O'Connor. Lee's wife, Laura Murphy Lee, got a $76,000-a-year job as the mayor's special assistant for tourism, a post she has since left. And one of the mayor's first acts was to award a temporary bond counsel contract to Brown's law firm, Patton, Boggs & Blow, even though the firm had little experience in municipal finance (it was subsequently hired as a permanent bond counsel).

Kelly himself worked the phones, raising money for his fiancée both before and after her election. In May 1991, he helped stage fund-raising events for her in New York and Los Angeles, tapping his network of sophisticated, affluent fast-trackers—many of whom represented securities firms eager to do business with the city. Kellee Communications kicked in $1,000 in 1991, as did Kelly himself.

As for his business, his activities since the election and since the Kellys' wedding are less clear. For the record, he told the Afro-American, “I am one of five owners of WKYS, [and] I am the majority shareholder of Kellee Communications, which sells telephones to airports, prisons, and convention centers.”

He forgot the Millennium Group, which he incorporated in Massachusetts in November 1990, just two months after his wife-to-be's election victory. State incorporation papers list Kelly as president, Wiley as secretary, and Lewis Rambo as treasurer. Wiley says he simply lent his name for his client's convenience. (Rambo would not comment.)

The exact nature of the Millennium Group's business is somewhat vague, but its links to city government were cemented in January 1991, when the brand-new mayor named its president, Michael Gallie, to the D.C. Retirement Board, which oversees the District government's pension investments. Gallie describes himself as “an old, old friend” of Kelly's, but won't say much more than that.

Asked about his own prior employment, Gallie replies, “You've got to be kidding.” (Neither the retirement board nor the D.C. Office of Boards and Commissions would release Gallie's résumé, but he is in fact from Boston, and was once an executive with a minority venture capital firm called Urban National Corp.)

In 1991, the Democratic National Committee (DNC)—chaired by Brown—granted a license to the Millennium Group to make and sell items commemorating the party's bicentennial. Kelly's company cranked out duffel bags, ashtrays, keychains, and other trinkets, and forwarded 11 percent of the gross to the DNC. According to Wiley, the Millennium Group seeks to expand its merchandise business and produce knickknacks for other large associations and conventions.

The Millennium Group also made D.C. statehood pins, 5,500 of which it sold to Friends of D.C., a PAC that was formerly controlled by the mayor, for $11,000. The mayor and her cabinet wear the pins, which are red with the number 51 inside a white star. Bernard Demczuk, vice chair of Friends of D.C., says he bought the pins from Gallie in May and July, ignorant of the Millennium Group's links to Kelly. Since March, Demczuk adds, Friends of D.C. has been independent of the mayor.

The mayor's campaign committees may have purchased other items from the Millennium Group. Guests at her birthday party in 1992 were given party favors—red hats and white porcelain cups emblazoned with her initials—that had been purchased from James Kelly's company, according to one source familiar with the event. However, the expenditure does not appear on campaign finance reports for either the mayor's SPK Committee or Friends of D.C.

The Millennium Group's arrangement with the Democrats raised eyebrows in January 1992, when a company part-owned by Brown won a lucrative District contract. For seven years, Brown's company, Capital PEBSCO, had administered part of a deferred compensation program for District employees. A joint venture between Brown and an Ohio-based firm, Capital PEBSCO shared the contract with a company called Copeland Associates. When the contract was re-bid in late 1991, Brown's company was awarded the full contract, worth up to $958,000 over two years.

Brown earned $40,000 in “consulting fees” last year from the parent PEBSCO, according to his financial disclosure form. He valued his Capital PEBSCO holdings between $250,001 and $500,000, and also reported owning between $15,001 and $50,000 worth of Kellee Communications stock. Kellee paid him an additional $5,000 in director's fees.

Of course, the mayor was not involved in picking Brown's company (though she did select Patton, Boggs). The city's procurement process is designed to give at least the appearance of impartiality. But there is still some wiggle room, and that's how PEBSCO appears to have won the contract. D.C. contract evaluators scored PEBSCO's and Copeland's bids approximately equally on all objective criteria, but ranked Copeland lower in such subjective areas as “oral presentation.” One particular evaluator, Kelly appointee Margie Utley, scored Copeland drastically lower than PEBSCO in subjective categories.

The pattern emerging here is one of I'll scratch-your-back-if-you'll-scratch-mine. First, Patton, Boggs & Blow gets a piece of the city's bond counsel contract, despite its inexperience in the bond field. Then Kelly gets a sweet deal from the DNC. Then Brown, a partner of Kelly's in WKYS and a shareholder and director of Kellee Communications, gets a District contract worth nearly $1 million. Shortly after the contract is awarded, Capital PEBSCO gives $2,000 to the mayor's PAC.

Was there a quid pro quo? Or is there really no connection, as the mayor's supporters have maintained, between James Kelly's business and the public business?

Let's flip the question: Is it conceivable that Brown's company or Patton, Boggs could not have gotten those city contracts?

The line between private business and city business was further blurred when the Kellys purchased a house in Shepherd Park. In June, the Kellys closed a deal to buy a large dwelling at 16th and Iris Streets NW for $315,000. There were a number of odd things about the deal. For one, the seller was not a human being, but a faceless corporate entity called the 7601 Limited Partnership, which had bought the house in 1989 for $350,000. Since then, the owner has performed at least $60,000 worth of renovation work, according to District land records, adding a rear wing and a new garage. Its assessed value was more than $400,000. So the seller took a $95,000 loss.

Who is this stoic seller?

Lena Bundy is the general partner of 7601 L.P., and is also listed as a resident of 7601 16th Street in the 1993 Haines Criss-Cross Directory. Neighbors say the house sat vacant for much of the past several years.

Who is Lena Bundy? Lena Bundy gave $1,000 to the mayor's PAC in February. This same Lena Bundy (who did not return a telephone message) works with politically connected real-estate dealer Oliver Cowan (who also did not return a call). Back in 1991, you may remember, the city signed leases of more than $400,000 a year to shelter homeless families in two Cowan-owned apartment buildings. For several months, the city was paying rent to Cowan without actually having moved homeless families into the apartments, the Washington Post reported.

“There was no sweet deal,” says Manager. “The house was on the market for at least two years. Any assertion that the price was lowered is absolutely ludicrous.”

Meanwhile, the mayor's old house on West Beach Terrace NW, which she bought with her first husband, has not been sold. And when the Kellys had trouble arranging financing, they tapped Kelly's old chum Ronald Homer for a $267,000 bridge loan from the Boston Bank of Commerce. “It was a good piece of business for us,” he says.Homer says the full mortgage was taken by another Boston bank, the Boston Faith Deposit Trust.

The Kellys got their house for cheap. But come Halloween, they weren't in a generous mood, it seems: Trick-or-treaters who approached the house were told by guards that the Kellys would not be giving out any candy.

What the mayor and her husband have in common, above all else, is an elite background: The dean's son married the judge's daughter. She was acutely conscious of this, no doubt, when Post reporter French interviewed her for a 1991 Essence profile.

“Everybody saw the miniseries Roots,” she told French. “We all know how it got started. I am the product of that experience like everybody else. I know who I am and I know who I bottom-line for: Black folks.”

The question is, which ones? All black folks, or does she bottom-line for the ones who share her “roots”—a narrowly defined circle of entrepreneurs and politicians?

These, after all, are her husband's companions and business partners, and members of her extended family: people who stand to gain a lot from her position, either directly or indirectly. On a few occasions, Sharon Pratt Kelly's political career has intersected with James Kelly's business ventures and those of his friends, although there is no evidence that the couple has used her position to enrich him. Then again, if the mayor's Christmas wish for a new convention center and stadium is granted, both of his businesses could stand to benefit.

Kelly's business ventures, the ones we know about, seem pedestrian enough—pay telephones and Democratic Party duffel bags are not the stuff of American fortunes or political scandals. So why does this life-partner of a public figure hug the shadows? What is the source of his animosity for the press? His name rarely made it into print before his girlfriend was elected mayor in 1990, after all.

He acts for all the world like a man who's got a secret. And since the mayor will face competition for re-election next year, she should expect many impertinent questions in the next 10 months. Where, exactly, is the boundary between James Kelly's private business and her elected office? How high is the wall?

The first couple's answers have varied to suit their convenience. When James Kelly wants a District Building office, and a District government car and driver, he is “one-half of the first couple of the District,” as his wife's spokesman put it. When questions are raised about his financial affairs, the male half of the District's first couple is transformed into a private citizen. Their professional careers are putatively separate; they even file separate tax returns. But she did give up her name—a politician's greatest asset—at his insistence, as she told the Post Magazine. Now they're both “Kelly.” It might or might not help James Kelly to share the mayor's name, but it sure can't hurt him. At least people remember his name now.

One thing is clear: It's time for public officials' financial disclosure requirements, now stuck in the age of Barbara Bush, to catch up to the age of Hillary Clinton and James Kelly.

Art accompanying story in the printed newspaper is not available in this archive: Guion Wyler.

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