City Desk

Read the Bennett Report on D.C. Council Contracts and Earmarks

Without further ado, here's the full executive summary of the investigative report into D.C. Council contracting and earmarks prepared by attorney Bob Bennett and his former Skadden Arps colleague Amy Sabrin.

Highlights:

  • "Mr. Barry personally delivered a contract payment check to her, insisted that they go directly to a bank, waited in the car while she cashed the check, and when she returned to the car, required her to pay a portion of the funds over to him, claiming that the payments he made on her behalf were loans, not gifts. She did not recall how much she gave him out of the check proceeds, but it may have been between several hundred or several thousand dollars."
  • "Council earmark grants create substantial opportunities for waste and abuse. Further, as a practical matter, the present procedures for awarding and monitoring Council earmarks substantially undermine grantee accountability."
  • "Special Counsel concludes that many of the grantee organizations to which Mr. Barry steered public funds were rife with waste and abuse, and provided substantial financial benefits to some of his close friends and supporters. These grants also effectively permitted Mr, Barry to circumvent laws and regulations that restrict the nature and amount of funds that can be expended for citizen-service programs."

A PDF of the summary is also available. [UPDATE, 4:30 P.M.: The full report is now available as well.] The full report, complete with appendices, is forthcoming. In the meantime, have a look:

Confidential

Council of the District of Columbia Contracts and Grants
Report of Investigation
Pursuant to D.C. Council Resolution 18-217
(Summary)

Submitted by
Special Counsel
Robert S. Bennett
Hogan & Hartson LLP

Deputy Special Counsel
Amy R. Sabrin
Skadden, Arps, Slate, Meagher & Flom LLP

February 16, 2010

SUMMARY OF KEY FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

A. Personal Services Contract to Donna Watts-Brighthaupt

Special Counsel found that approval of the personal services contract to Donna Watts-Brighthaupt was not obtained in accordance with D.C. law or Council rules, policies, and procedures because the authorities responsible for approving such contracts were misled about its purpose and because Mr. Barry did not disclose his financial, personal, and sexual relationships with Ms. Watts-Brighthaupt, Special Counsel further found that Council Member Barry received part of the contract proceeds from Ms. Watts-Brighthaupt in payment for loans he claimed to have made to her.

1. Factual Findings

The complex facts regarding Ms. Watts-Brighthaupt's personal services contract are discussed in detail in Part V of Special Counsel's Report. Based on the evidence, Special Counsel determined as follows:

• Mr. Barry arranged for a personal services contract to "be awarded to Ms. Watts-Brighthaupt, with whom he had a sexual and close personal relationship. Ms. Watts-Brighthaupt was paid a total of $15,000 pursuant to the contract.

• Mr. Barry sought to hire Ms. Watts-Brighthaupt to draft a proposal for a program entitled "Emerging Leaders of Ward Eight." The initial scope of work for this project was not accepted by the Office of the Secretary, which must approve personal services contracts. The Office of the Secretary advised Mr. Barry that the project description was insufficiently detailed and that the project was not appropriate for funding because it appeared to be political in nature and did not relate to Mr. Barry's Council functions. Subsequently, Mr. Barry submitted a new scope of work stating that Ms. Watts-Brighthaupt would assist in the planning and execution of a series of public hearings on poverty reduction, which was accepted by the Secretary. Thereafter, however, Ms, Watts-Brighthaupt executed the original Emerging Leaders project proposal.

• Significant portions of the initial Emerging Leaders deliverable prepared by Ms. Watts-Brighthaupt for Council Member Barry were copied without attribution from publicly available materials located on the Internet.

• Testimony and other evidence shows that Council Member Barry sought approval for the contract after paying for certain expenses for Ms. Watts-Brighthaupt, and that he received a portion of the moneys paid to Ms. Watts-Brighthaupt under the contract as repayment for funds he claimed to have loaned her. Specifically, knowing she was in financial distress, Mr. Barry on occasion paid Ms. Watts-Brighthaupt1 s mortgage, utility and car repair bills, and bought other items for her that she had believed to be gifts, including jewelry and a coat, Ms. Watts-Brighthaupt testified that on several occasions, Mr. Barry personally delivered a contract payment check to her, insisted that they go directly to a bank, waited in the car while she cashed the check, and when she returned to the car, required her to pay a portion of the funds over to him, claiming that the payments he made on her behalf were loans, not gifts. She did not recall how much she gave him out of the check proceeds, but it may have been between several hundred or several thousand dollars. Mr. Barry acknowledged that he insisted that Ms. Watts-Brighthaupt repay the money he believed she owed him, but could not recall the amounts involved. He further testified that he might have gone with her to the bank on one or two occasions when she owed him money, but did not specifically recall doing so. He denied, however, that he insisted that she cash the checks and repay him from the proceeds.

2. Conclusions

As discussed in detail below, Special Counsel concludes that the foregoing conduct circumvented the Council's policies and procedures for the awarding of personal services contracts and resulted in a misuse of government funds. In the view of Special Counsel, it also constitutes a conflict of interest under the laws and regulations of the District of Columbia, violates the standards of conduct applicable to Council Members, and warrants a referral to appropriate authorities for investigation of possible violations of law.

3. Recommendations Regarding Personal Services Contracts

Special Counsel concludes that controls recently implemented by the Council through the Office of the Secretary have substantially improved the accountability for personal services contracts. The Council, however, should require that a Council Member seeking approval for a personal services contract certify that he or she has no financial, business, family, or personal relationship with the proposed contractor or contractor personnel. The contractor likewise should be required to agree to abide by District of Columbia conflict of interest laws and regulations. Additionally, there should be greater transparency with regard to the award of personal services contracts. In particular, the name of the Council Member seeking approval for the contract, the amount of the contract, the identity of the contractor, and the stated purpose of the contract should be reported publicly at the time of award. Special Counsel's recommendations as to personal services contracts are addressed in greater detail in. Part VIII of Special Counsel's Report.

B. Council Earmark Grants

Special Counsel finds that—notwithstanding the Council's recent efforts to impose controls on earmark grants, and notwithstanding that many of these grants benefit well-run, legitimate organizations—Council earmark grants create substantial opportunities for waste and abuse. Further, as a practical matter, the present procedures for awarding and monitoring Council earmarks substantially undermine grantee accountability.

Special Counsel's review of earmarks focused on certain grants sponsored by Council Member Barry, which illustrate the pitfalls of earmark grant making. A detailed discussion of the facts and Special Counsels conclusions regarding these earmark grants appears in Part VI of Special Counsel's Report. These are summarized as follows:

1. Factual Findings

Council Member Barry sponsored 41 earmark grants in FY 2009—the highest number by far of earmarks by any Member of the Council. The 41 grants totaled $8,475,000. In particular, Special Counsel finds as follows:

• At the behest of Mr. Barry, six councils in "Ward Eight ("the Ward Eight Councils") were awarded a total of $450,000 in earmark grants for FY 2009. These entities principally performed citizen-services activities in the Ward represented by Mr. Barry. The Ward Eight Councils were conceived by Council Member Barry and implemented at his direction by Brenda Richardson, a long-time supporter who managed his Constituent Services Office ("CSO"). Although Ms. Richardson asserts that the councils acted independently of Mr. Barry, there is substantial evidence that the Council Member oversaw the management of the councils through her.

• As part of reforms enacted for FY 2009 by the D.C. Council to improve accountability for earmark grantees, recipients were required to be incorporated to receive grant funds. A number of signatures on the Articles of Incorporation of the Ward Eight Councils were falsified.

• At Mr. Barry's direction, Rev. Anthony Motley drew on funds from the account of an entity known as the Marion Barry Scholarship Fund to pay the incorporation fees for the Ward Eight Councils. The money in that fund had been raised for the purpose of providing scholarships to students.

• A handful of individuals close to Mr. Barry, and their friends and relatives, made tens of thousands of dollars from the Ward Eight Councils and other Barry-sponsored earmark grantees. In particular, Ms. Richardson was under contract to serve as the Project Director for three of the Ward Eight Councils and was paid a total of $101,363 by them. Another Barry supporter, Rev. Anthony Motley, was under contract for approximately $34,000 from two Barry-sponsored grantees, and he also received $14,550 in fiscal agent fees paid by another grant recipient. Likewise, Mr. Barry's Narcotics Anonymous sponsor received a total of $16,465 from two grantees.

2. Conclusions

Special Counsel concludes that many of the grantee organizations to which Mr. Barry steered public funds were rife with waste and abuse, and provided substantial financial benefits to some of his close friends and supporters. These grants also effectively permitted Mr, Barry to circumvent laws and regulations that restrict the nature and amount of funds that can be expended for citizen-service programs.

We note that deficits of professionalism and accountability were not unique to grants sponsored by Council Member Barry. Special Counsel reviewed documentation for certain other grantees, and the Office of the District of Columbia Auditor audited a number of grants sponsored by Members of the Council and found grant performance and accountability lacking there as well. The Auditor's Report concluded 'that sufficient internal controls were not developed to effectively ensure that District funds were properly managed, and accounted for, and used only for their intended purposes." Special Counsel concurs with this finding.

3. Recommendations

Special Counsel recommends that the earmark grants sponsored by Council Member Barry be the subject of a referral to the appropriate authorities, including the District of Columbia Office of Campaign Finance, for further investigation into possible violations of law and ethical standards.

Special Counsel also recommends that the D.C. Council eliminate its current practices with regard to the award of Council earmark grants. If earmark grants are retained, they should be awarded with greater transparency and only to well-established charitable organizations with proven track-records for fundraising and accountability. Specific potential reforms are discussed in more detail in Part VIII of Special Counsel's Report.

C. Mr. Barry's Efforts to Impede Special Counsel's Investigation

Special Counsel found that Council Member Barry attempted to impede the Investigation by refusing to answer material questions related to his conduct and by advising a material witness to withhold documents and information requested or subpoenaed by Special Counsel. Detailed evidence regarding this conduct is set forth in Part VII of Special Counsel's Report. This conduct should be the subject of Council disapprobation and should be referred to authorities for investigation of possible violations of D.C. laws concerning obstruction, of Council proceedings.

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Comments

  1. #1

    All the council members, NEED TO GO!

  2. #2

    If you look up anyones butt, you are bound to find something that stinks.

    But I find it funny that Gray, Barry, Thomas, and The Brown Brothers always find a way to grandstand about ethics.

    You know that phrase, he who smelt it dealt it. As true in politics as in kids bubble baths. Point one finger and three are looking right at you.

  3. #3

    hymesb: "Gray, Barry, Thomas, and The Brown Brothers". That says it all. It's obvious you've studied the dark underworld of certain DC politicians. And you're right on mark about ethics. Add Graham to this list, and it'll be up to date.

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