For one thing, he and city legislators were faced with a last-minute budget crunch to the tune of $660 million. They were given two weeks to find a solution. Meanwhile, the antics of Ward 8 Councilmember Marion Barry had exposed the sordid practice of earmarking, whereby councilmembers directed taxpayer funds to favorite nonprofits---in Barry's case, nonprofits that he had created and controlled.

Gray came up with a tidy way to address both problems: End all earmarks, cold turkey.

"I don't want to pick and choose because, inevitably, we will be accused of some bias in the process," Gray told the Washington Post at the time. "People are using them as a lifeline." Organizations from across the District showed up at city hall, calling on the council to preserve their lifelines in a marathon hearing, but Gray held his ground---no earmarks survived in the final budget.

Or did they?

The earmark ban, it turns out, was not absolute. At least one councilmember found a way to get money to key nonprofits in his ward through the fiscal 2010 budget. That would be Ward 5's Harry Thomas Jr.

The key legislative language can be found in the budget of the Children and Youth Investment Trust Corp., a quasi-independent nonprofit charged with making grants to qualified service providers, then overseeing those grants. This is what it says: "The budget provides $1,320,000 of designated grants, which includes $1,000,000 for competitive grants to support community-based targeted gang street intervention and outreach and $320,000 for...Ward 5 anti-crime youth violence initiative."

They key word is "competitive." A Ward 6 initiative, for instance, was competitively bid, with $280,000 grant going to the well-regarded Sasha Bruce Youthwork program. Same goes for an even larger chunk of money granted pursuant to the "Blueprint for Action to Counter D.C. Gang and Youth Violence."

The Ward 5 money was doled out through a different method.

At a performance oversight hearing last week, Ward 6 Councilmember Tommy Wells asked Interim CYITC CEO Ellen London about the Ward 5 money and whether it, like the Ward 6 money, had been subject to competition.

Said London: "They were not competitively bid. We met with the Ward 5 councilmember and talked about what he felt would be the best way to serve the community. We talked about a number of organizations that he suggested we look at that he knows have a track record of good services."

Allow LL to translate: Thomas had a key role in choosing which groups got city money. He earmarked funds.

Thomas protests that characterization: "I have no earmarks," says the councilmember. "We made recommendations for groups we know that have done these types of services, and they have to apply like everybody else to that process."

The process for CYTIC grantees is not without rigor: Nonprofits have to be federally registered nonprofit organizations, preferably with a recent financial audit, must be in good standing with the District government, and must submit a work plan and budget narrative to be considered for funding.

Who are these groups and what do they do? According to a list provided by the CYITC, 21 different groups have been identified to receive funds; checks have already been cut to nine of them.

Some of the groups are fairly well-established, and several of them, in fact, have been funded in the past by the CYITC. And many of the groups tapped for the anti-gang money have a sporting focus---keeping with Thomas' well-known jockish tendencies.

The Woodridge Warriors and Washington Chiefs sports teams each got $20,000. And a group called the Falconsedge Male Task Force has received $40,000 in city funds. David Jones, who heads the organization, said the funds went toward the D.C. Falcons, a football team for older youth---kids who had either graduated from high school or had dropped out.

"It gives them something to do," he says. "I didn't realize how much influence we had over their lives. They've still got a mentor."

The money, Jones says, went to fund jerseys and equipment for his players, and well as bus rental fees for games, which can be as far away as Baltimore and Southern Maryland. The team practices in Ward 5, at McKinley Technology High School, though Jones personally doesn't live in the ward. Jones says he's recruited as many as 70 players for the program, with a core group of 30 or so participating "on a consistent basis." Jones estimated about 60 percent are from Ward 5.

Jones says he heard about the funding opportunity through the CYTIC. "I pay attention to the council hearings. I did see that the councilmember was able to get something from the mayor for the ward, but I didn't know [any details]."

Thomas, he says, is "a big supporter of sports in the community....If you have any problems with anything he can possibly help you with, he'll reach out for you. He'll do everything he can." In appreciation, Jones has posted Thomas' logo on his Web site, with his slogan: "Building Bridges, Finding Solutions, People First"

Of the nine groups funded thus far, by far the largest chuck of money, $125,000, went to the Friends of Carter Barron Foundation, which has long run arts programs for at-risk youth from across the city.

The CYITC grant, says FOCB President Gloria Hightower, went toward a youth holiday musical, held in December at Howard University's Cramton Auditorium. The event featured 25 kids enrolled in the FOCB's year-round arts program, plus about 15 "interns" working on the production. Hightower estimates "at least 20, 30 percent were from Ward 5." (Thomas disagrees, saying, "I would think it was 50 percent of those kids." He added that Ward 5 seniors and parents attended the show free of charge.)

The six-figure check, Hightower says, went to cover a variety of expenses connected with the show---the venue rental fee, union musicians, professional sound and lights, training staff wages, youth stipends, and an honorarium for guest artist Yolanda Adams, a Grammy-winning gospel singer.

"You have to pay people to get quality work," says Hightower.

Like Jones, Hightower said she learned about the funding availability through CYITC, not through Thomas---though Hightower, too, vouched for Thomas' commitment to the community and to her program.

In defending his role in directing the funding, Thomas emphasizes that he made no final decisions; he instead tried to direct funds to groups that he knew to be worthy of investment. "Why as Ward 5 councilmember, when I have the highest amount of murders, would I not make a recommendation for any gang program? Why would I not make a recommendation when I'm on the street every day?" he says, adding he credits the nonprofits with reducing crime in his ward.

But LL's earmarking concerns alight on the sacredness of the competitive process. Thomas may know well worthy groups doing work in the ward; then again, there may be worthier groups that he might not know about or, for one reason or another, he might not support. That's why issuing a public request for bids and subjecting it to a rigorous independent review is the best way to spend city money.

Thomas says his role was little more that sending a letter of recommendation on behalf of certain groups. "I sent the money to the CYITC," he says. "I was grateful that they would listen."

Listen they did.

In an interview, London said that the CYTIC did not open the Ward 5 money to bids, as it did for most other pools of city funds. And Thomas was influential in the funding process: All of the groups that Thomas suggested, she says, are under consideration for funding; she emphasized that, by and large, the groups he recommended are worthy recipients of the funds. "We had not or have not been asked to do something that we're not comfortable with," she says.

LL was unable to locate D.C. incorporation documents or federal tax records for four grant designees, including the Ivey 23 Terps, a youth basketball team, and a group listed as All-Star Homework Assistance. None of those four have been given money yet; London said last week that CYITC continues to work with the groups to complete their paperwork.

Gray---who has led an earmark crackdown, vowing again to excise earmarks from the 2011 city budget---doesn't share LL's opinion that Thomas's designation deserves the E-word. Thomas, says Gray spokesperson Doxie McCoy, "doesn't have the power to direct this money, it is the Children's Trust."

"Councilmembers know their wards, so it is appropriate that they make suggestions," she says, "but they don't have the power to direct the decisions of the [CYITC]."

Anyone who carries on personal and political dealings with Ward 8 Councilmember Marion Barry lives under something of a cloud: Sooner or later, you're going to be interrogated or investigated by authorities. Girlfriend Donna Watts-Brighthaupt, key aide Brenda Richardson, other staffers---they all come in for some prime-time analysis in the report issued earlier this week by attorney Bob Bennett.

The light of scrutiny shines hard on the Rev. Anthony Motley, one of Barry's closest confidants and a 2010 independent candidate for an at-large D.C. Council seat.

Motley's name surfaces in Bennett's report in connection with those various Ward 8 "councils," shorthand for the nonprofits that Barry helped create and to which he steered city funds. Motley told investigators that he launched the groups in order to be Barry's "eyes and ears and legs on the ground."

Besides eyes and ears and legs, Motley's also had a key role regarding Barry's wheels.

Unlike most other councilmembers, Barry's ride doesn't sport special council plates, but rather a plain-old District tag, CU-5768. Marion Barry without vanity tags is a puzzling thing, because if there's one thing the career pol loves, it's the perks of public office.

And if the councilmember drove a car registered in his own name, it's a good bet that he'd have "Ward 8 Councilmember" emblazoned on those red-white-and-blue tags. But his ride, a 1997 Mercedes E320, isn't registered to the councilmember. It's registered to Motley, according to public records available through Lexis-Nexis.

The car has been in Motley's name since May 2007, and Barry has been driving the car at least since June 2008, when it was found inconsiderately parked on Washington City Paper's parking deck. It's regularly parked in front of the John A. Wilson Building---where it was parked yesterday.

So why would Barry drive a car not registered in his name?

Actually, a better question: Why not?

Like tardiness and nasty quips and the press, Barry has trademarked the art of tying his fortune to that of his cronies. To wit, the Bennett report finds that Barry ordered girlfriend Donna Watts-Brighthaupt to give him cash paid to her via a city contract he awarded.

The report doesn't discuss the councilmember's odd automobile arrangement, but it does outline what Motley has received through his association with Barry: He "personally received at least $54,000 from [fiscal 2009] earmark grant recipients"---earmarks all requested by Barry.

Anthony Motley -- file photo by Darrow Montgomery

However, there's another reason why Barry might not want to have a late-model Mercedes registered in his name. Under the terms of a settlement agreement with federal prosecutors in his long-running federal tax-fraud case, Barry has to fully report his income and spending to authorities on a monthly basis in order to determine how much of his income is seized in order to pay back taxes. If Barry were to include payments on a luxury vehicle, they could demand an adjustment to Barry's repayment schedule.

If prosecutors determine that Barry has been shrouding income---say by driving a car registered in someone else's name---it could lead them to seek yet another contempt finding against Barry.

Motley did not return numerous calls for comment.

LL reached Barry this afternoon and asked him why his car is registered to Motley. His reply: "Goodbye." Dial tone.

The automobile arrangement isn't the only affair raising questions about Motley's fitness for public office. The Bennett Report is rife with instances of bad behavior involving Motley.

When the Ward 8 "councils" were first incorporated, it was Motley who paid for the corporate registration process---by withdrawing money from the Marion Barry Scholarship Fund, money meant for needy kids. Motley told investigators he did so of his own volition, but a Barry aide, according to the report, said it was done under Barry's orders---raising the prospect that Motley was covering for Barry.

As noted above, Barry-directed earmarks were a key source of income for Motley.

Of the $54,000 that Motley received from the "councils," $39,000 reimbursed the Barry associate for serving as executive director of nonprofits named Inner Thoughts and Jobs Coalition.

Motley got another $14,500 through another earmark recipient, a group called the National Association of Former Foster Care Children of America. Motley had no direct connection to the group, but because the NAFFCCA didn't meet the council's minimal rules for receiving earmarked funds, they needed a "fiscal agent"---a third-party group to oversee the group's spending. That group was Inner Thoughts---and the money that the NAFFCCA paid as fees for serving as a fiscal agent went directly into Motley's personal bank account.

Here's what Motley gave by way of explanation: "Rev. Motley said that he believed that the fiscal agent fees received from NAFFCCA were compensation for services he personally provided; therefore, he deposited the funds into his personal account. Rev. Motley said the fee went towards his administrative efforts, and he estimated he spent between four and six hours each month on matters related to NAFFCCA." That works out to at least $202 per hour---not a bad rate.

Investigators also "identified numerous irregularities with regard to the earmark grantees with which Rev. Motley was associated." For one, there's "substantial evidence that Rev. Motley treated earmark funds from all three grantees, including those of the bankrupt NAFFCCA, as one pool of money." That means, for instance, that NAFFCCA earmark checks went into the Inner Thoughts bank account. The funds were then used to pay NAFFCCA expenses to both Jobs Coalition and Inner Thoughts---$48,000 worth. Some of those expenses were paid without the approval of the NAFFCCA board.

The report calls this an "apparent breach of fiduciary duty and self-dealing."

Motley explained to investigators that he thought "Inner Thoughts was entitled to retain grant funds awarded to NAFFCCA so long as Inner Thoughts performed work that was related to the purpose of the NAFFCCA grant."

And here's another gem: "Motley admitted that he manufactured supporting documentation for certain grantee expenses—in some instances, after receiving [the Bennett team's] document subpoena"---including backdated employee timecards and a lease with a fictitious landlord.

In an interview aired yesterday, Motley told WJLA-TV: "These are legitimate entities that were established to provide services to the citizens of Ward 8."

"I am a different kind of council member. I ran to get resources, to uplift people of Ward 8 to do everything I can to empower them."--Councilmember Marion S. Barry Jr. on the dais yesterday in response to Robert Bennett's testimony.

By resources, Barry means the thousands of dollars in city funds he funneled to a set of fishy nonprofits. By "people of Ward 8," Barry means his campaign supporters and love interest.

As the Bennett Report lays out in detail, Barry's nonprofits enriched few outside of his inner circle. At best, they provide a blueprint for how nonprofits should not be run.

Blueprint after the jump!

Bennett's investigation did some serious digging into the financial records of the six nonprofits---Clean and Green, Inc., Clean and Sober, Inc., Education Council, Inc., Health Council Inc., Workforce Development Council, Inc., and the Youth Leadership Council, Inc.---conceived by Barry. They found:

*60 percent of the six nonprofits' budget went to administrative salaries.

*8.65 percent went to the fiscal agents.

*$23,885 was spent on office supplies and telephones

*$3,091 was spent on postage.

*$35,376 was spent on marketing and promotion materials.

*$13,589  was spent on catering.

*14.1 percent of the total budgets fell under "miscellaneous."

So what's the takeaway?

Only really bad nonprofits devote 60 percent of their budget to salaries. And despite all this money spent on food and promotions, hardly anyone we talked to in Ward 8 over the summer had heard of these nonprofits.

In response to a Freedom of Information Act Request, Washington City Paper obtained documents on the day-to-day business of the nonprofits. The documents provide some insight into just how these organizations function and how wide a net they cast.

One meeting of the Ward 8 Health Council is indicative of the groups' outreach problems. According to a memo detailing the minutes of  the Jan. 16, 2009, Health Council meeting, interested parties lamented its poor attendance. During one discussion, individuals "agreed to make a concerted effort to get at least 25 citizens to the table" for its February meeting.

Those listed on the Ward 8 Health Council's contact list included a woman who had quit the organization and former Barry girlfriend Donna Watts-Brighthaupt.

Among the food expenses on behalf of the Ward 8 Health Council: an invoice for $250.00 for "juices," "veg. soup" and "weightloss + nutrition juices." It is unclear from the invoice whether this cost included more than just juices and soup.

In April 2009, the Ward 8 Health Council spent $1,238.75 for T-shirts and brochures.

The Bennett Report states the operations of the nonprofits were managed mainly out of Barry's constituent services office. At best, the work of some of the nonprofits went incomplete. The agendas of some of the nonprofits were typed up on Barry letterhead---evidence, perhaps, that the nonprofit managers were serious about keeping expenses low.

The Bennett findings zeroed in on the woman Barry tapped to oversee the nonprofits---Brenda Richardson. She raked in more than $100,000 for work that the report characterizes as follows: "Ms. Richardson was in charge of quality control for the councils, selected various vendors utilized by the councils, and regularly reported to Council Member Barry regarding the councils."

The Bennett team found a very legal way of saying that Richardson was overpaid:

"Ms. Richardson submitted invoices for payment to the councils reflecting that she worked fewer hours than she was committed to work, but she was nonetheless paid the full amounts under the contract for the pertinent pay period."

Richardson was supposed to work 20 hours per week for each council. But according to the invoices she submitted, she worked 10 hours per week. Yet her paychecks overlooked the invoices, paying her for the full 20 hours per week. Richardson held this arrangement with three of the nonprofit organizations, meaning that she was compensated for 60 hours of work per week, or one-and-a-half employees. "These invoices were not questioned by the fiscal agents or the agencies monitoring each grant," the report states.

In his deposition, Barry called Richardson his "accountability officer."

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.

Well, it sure as hell wasn't a whitewash.

Attorney Bob Bennett this morning presented the findings of a five- seven-month investigation into D.C. Council contracts and earmarks---a probe prompted by the shenanigans of Ward 8 Councilmember Marion Barry this summer. [Download a PDF of the report's executive summary; download the full report.]

The blockbuster finding is that Barry handed council checks to girlfriend Donna Watts-Brighthaupt, then ordered her to go to a bank, cash the checks, and give him part of the proceeds. Barry, in a deposition, protested that any money she handed over was to repay loans Barry had given.

But, Bennett noted today, the "evidence is overwhelming" that Barry illegally took city funds. He called for the council to refer the matter to the U.S. attorney and the D.C. Office of Campaign Finance.

The other part of the Bennett investigation concerned the longstanding council practice of awarding "earmarks"---noncompetitive grants to various nonprofits favored by councilmembers. Bennett and his team, following Washington City Paper's reporting on the matter, found massive irregularities with the process by which several nonprofits, created at Barry's behest, were funded and operated. Like City Paper, Bennett found that incorporation documents were forged, that large amounts of money were steered to political supporters, and that Barry remained in control of the groups.

In testimony before the council today, Bennett pointed to two Barry cronies who personally benefited from the earmarking arrangement---Brenda Richardson, his constituent service director, who made more than $100,000 through the groups, and Anthony Motley, the at-large council candidate, who made more than $50,000.

Aside from the critique of Barry's practices, investigators were just as critical of the earmarking process writ large. Prior to the presentations of the report's findings, Council Chairman Vincent C. Gray announced a number of changes he planned to make to the earmarking process. But Bennett & Co. made clear that any changes to the system would be little more than cosmetic.

Bennett testified that there has been "little transparency, "no competition," and "little or no accountability" in earmarking. Earmarks, another investigator reported, provide "substantial opportunities for waste and abuse"; the official recommendation is that the council "seriously consider ending earmark grantmaking as currently practiced."

Bennett called the earmarks "like a narcotic drug" to politicians. Once they start using them, they can't get enough of them.

Barry's misbehavior didn't end then the contracts and earmarking was exposed. Bennett described a campaign by Barry to obstruct his investigation, in part by minimizing the seriousness of the probe and attacking its legitimacy, and in part by attempting to convince Watts-Brighthaupt not to share key evidence with investigators.

In the end, Bennett concluded, Barry "breached the high ethical standards expected on him" and "breached the public trust."

Bennett, before presenting his findings, explained that over the course of the inquiry, a team of dozens of lawyers spanning two top firms (he moved from Skadden Arps to Hogan & Hartson amid the probe) "collected and reviewed 575,000 pages of documents obtained from numerous sources" since the council authorized the investigation in July.

Barry for his part protested mightily Bennett's investigations and its findings, protesting inquiries into his sexual behavior and noting the lack of "written procedures" for awarding personal service contracts.

Bennett swatted the latter claim away readily: "I wouldn't expect the city council to have written rules---with all due respect, sir---that you should not give [contracts] to people you have a relationship with."

Barry's ultimate defense: "I don't apologize for getting as many resources to the ward as I can." Never mind that the investigation found that most of those resources found their way into the pockets of Barry's political allies rather than his greater constituency.

"We couldn't have been more fair to Mr. Barry," Bennett said before the dais. "We plain and simple found that he did some things wrong."

That includes Catania's decision to walk out on Friday's press conference announcing an independent investigation of Barry's contract with Donna Watts-Brighthaupt after Barry used to opportunity to rail against Park Police. And also Catania's abortive investigation into what "essentially is a personnel matter" with a nonprofit he funded through an earmark.

Why such treatment? Instead of the race card, Barry pulls the gay card: "I attribute your latest actions to my 'no' vote on recognizing same sex marriages from other states."

With regard to the nonprofit, he writes: "For you to imply that the 'Clean and Sober' community investment is administered or supervised by myself or Brenda Richardson is a lie. I call upon you to stop spreading these lies and false perceptions as it pertains to this."

He closes: 'You and your emotionally charged actions is causing a great divide. In a Democracy, there is room for dissent and disagreement. It happens in Legislative bodies all across this great land. Let’s meet and see if we can come to an amicable resolution.'

The full letter:

July 13, 2009

Dear David,

I have been perplexed, appalled, hurt by your increasingly levels of disrespect. On several occasions Chairman Gray has asked that you and I meet, and you have refused. Most recently, you walked out of the Chairman’s press conference making an emotional public statement. I attribute your latest actions to my “no” vote on recognizing same sex marriages from other states. Prior to the vote, we worked together cordially and with respect to one another.

As you may recall, soon after the vote you came down to my office. To say that you used choice words when speaking with me would be an understatement – you literally cursed me out. Since that time you have been rude, disrespectful, and will not even speak to me even when spoken to. Furthermore, you have taken upon yourself to draw in on what essentially is a personnel matter for the Board of Directors of Clean and Sober and Youth Leadership Council. This is unprecedented in your affairs with DC City Council.

As you very well know, the community investments in question were approved by the DC City Council. These community investments are administered by the agencies where they are placed. As you further know, Council members DO NOT HAVE contract authority. For you to imply that the “Clean and Sober” community investment is administered or supervised by myself or Brenda Richardson is a lie. I call upon you to stop spreading these lies and false perceptions as it pertains to this.

To add insult to injury, you have not involved any of the other four members of the Committee, including myself, in the issue of “Clean and Sober.” Independent of any other Member of the Committee, you on your own, has asked the Inspector General to investigate this matter. David, this is under the purview of the entire Council and not you independently. Just because you have a personal vendetta against me, an equal member of the Council with the same voting rights as you, does not mean that you should not be professional and discuss this matter with me and other members of the committee prior to making any calls of an investigation.

May I suggest that you turn the page and stop being disrespectful and unprofessional as it relates to me, personally and professionally, and other Members of the Council. You and your emotionally charged actions is causing a great divide. In a Democracy, there is room for dissent and disagreement. It happens in Legislative bodies all across this great land. Let’s meet and see if we can come to an amicable resolution.

Marion Barry

We were all disappointed.

At-Large Councilmember David A. Catania, who called the hearing to examine the role of "fiscal agents" in administering Department of Health grants, read an opening statement then announced he was recessing the hearing.

In his remarks, Catania explained that he had intended a "hearing of limited scope" about the fiscal agent relationships and "irregularities in the administration" of a particular grant, to Clean and Sober Inc., run by Sharon Wise. Wise, he explained, had contacted him about a contractual dispute, and Catania says he moved to resolve it, but was stymied when Brenda Richardson, Barry's constituent services maven and a key player in the dispute, declined to cooperate via a statement from her lawyer, A. Scott Bolden that cited an ongoing Inspector General investigation.

"Since our inquiry began," Catania said, "new and very serious additional allegations have been made public relating to this and other grants, involving Ms. Richardson in her capacity as constituent services employee to Mr. Barry." Catania went on to mention several of the allegations mentioned in City Paper's story published Friday night.

Said Catania, "If these allegations are true, and in light of the fact that these are public funds, the entities in question are arguably illegitimate....These accusations are extremely serious and should be reviewed. Given the timing of some of the information, the Committee is not prepared to delve into this matter this afternoon. In fact, given the allegations, I believe these matters are better reviewed by the Inspector General in their entirety. At the very least, each of these allegations should be investigated and a full accounting of all receipts and expenditures of the referenced entities should be conducted."

Waiting in the hearing room to testify was S. Patrice Sheppard, co-founder of Lydia's House, the group tasked with overseeing a $75,000 grant to Clean and Sober Inc.---one of the six groups created and operated by aides and associates of Barry that received earmarked funds in fiscal 2009.

She handed LL a prepared statement, saying that Lydia's House had been "asked if we would serve as the fiscal agent on behalf of" Clean and Sober.

LL asked who did the asking. Said Sheppard, "Brenda Richardson."

Stay right here at City Desk for more.

Washington City Paper is reporting tonight that Councilmember Marion Barry has funneled nearly $1 million dollars in city funds to six nonprofits under the apparent control of his own staff. Barry first secured funding for the groups in June 2008. But here's the catch: This was months before the groups existed, city records show.

Furthermore, incorporation documents appear to be marred by highly irregular representations. Two supposed incorporators of multiple organizations say their signatures were forged onto the papers, and one alleged director is a person who doesn't exist. And the documents were drawn up by paid Barry staffers and notarized by a close political ally of Barry. A Barry associate closely oversees the operations of all the groups.

These actions are entirely unconnected to Barry's contractual dealings with former girlfriend Donna Watts-Brighthaupt but raise similar questions about his use of public funds.

Read the entire story on Barry's financial dealings, and his staff's involvement.

Photo By Darrow Montgomery

On Tuesday, Ward 1 Councilmember Jim Graham pre-emptively told reporters that he'll be directing a grant or two in his pending committee report. "We do have earmarks," he said, "but we have kept them to an absolute minimum."

Absolute minimum, eh? Quite a boast for a guy whose committee report last year LL called "a true masterpiece of the porkly arts."

LL spent this evening poring through his report, released today. Graham's barely lost a step. By LL's count, he's sent more than $6 million to favored community groups and to projects almost entirely located within his home ward. That's roughly the same amount he sent to Ward 1 groups and projects last year.

Where'd the money come from? Most of it came from three spots: $6.8 million came from the new "Sweeper Cam" program, where street sweepers are now equipped with automated cameras to record illegally parked cars. That revenue, from an estimated 237,500 $40 tickets, hadn't been figured into the 2010 budget. Another $12.6 million comes from "enhanced neighborhood parking enforcement citations"---in other words, more parking enforcement officers writing more tickets on nights and weekends. Graham also found $12.7 million in Metro funds "double counted" in the budget. So he spent that, too.

Now most of that went to fund various agency budget lines and to restore programs in other agencies. But a bunch of it didn't. Here's the full list:

• $400,000 to "fund construction of an alley in Square 394/Lot 59 in FY 2010 to include paving, drainage easement, lighting improvements, and other required services."
• $1,250,000 to the Columbia Heights / Shaw Family Support Collaborative, the fiduciary agent and member of the Citywide Coordinating Council on Youth Violence Prevention Executive Committee "to sustain progress in the creation of a city-wide, community based gang/crew violence intervention."
  ---$250,000 to the Ward 4 Georgia Ave. Family Support Collaborative
  ---50,000 to the Columbia Heights Youth Club at the DPR Columbia Heights Youth Center
  ---$75,000 to MentoringWorks2 at the DPR Parkview Recreation Center
  ---$70,000 to Keely’s Boxing and Youth Center at the former Meyer Elementary School
  ---$50,000 for In-Da-Streets at the Hubbard Place, located at 3500 14th St. NW.
  ---$600,000 for "gang / crew intervention and prevention grants awarded by the process established by the CCCYVP and in consultation with the Children’s Youth Investment Trust Corporation and other members of the CCCYVP Advisory Board."
• $50,000 to the Reeves Recovery Group, Inc.
• $250,000 to the U Street Theatre Foundation for the Lincoln Theatre "for grants to support non-profit organizations and performance based activities, including developing performance arts groups and school cultural enrichment activities."
• $300,000 to the Columbia Heights / Shaw Family Support Collaborative "to continue the services of the Georgia Ave. / Kennedy St. Green Team"
• $250,000 to the Park Road Business Association and North Tivoli Business Association "to establish a Green Team in their respective business corridors"
• $150,000 to the Columbia Heights / Shaw Family Support Collaborative "for sustaining and enhancements to the U Street Green Team"
• $150,000 to the Columbia Heights / Shaw Family Support Collaborative "for the Lower Georgia Avenue Green Team."
• $500,000 to "support the newly assembled community stakeholders group representing the youth, parents and stakeholders of Clubhouses #10, #11, Eastern Branch and Jelleff" for "seed money to begin to establish community based programming back into their respective Clubhouses and technical assistance to help incorporate their group as a citywide body to represent all of the District Boys and Girls Clubs."
• $250,000 to the Boys and Girls Club of Greater Washington "to support their ongoing efforts to increase capacity training and programs at the District’s Clubhouses."
• $100,000 to Uniting Our Youth, Inc. "for the operating costs associated with the Children’s Centers located at Kelly Miller and Park Morton housing communities."
• $75,000 to the Lower Georgia Ave. Job Training Center "for job training, skill building, family support, and employment placement services."
• $150,000 to the D.C. Caribbean Carnival Inc. "to support its annual Caribbean style parade and 2 day cultural festival."
• $200,000 to Fiesta DC "to support its annual Latino Festival of Washington."
• $100,000 to AdamsMorgan MainStreet Group "to support its annual Adams Morgan Day Festival of Washington."
• $50,000 to the Mautner Project "to enhance its ongoing programs."
• $50,000 to the D.C. Latino Federation "to enhance its ongoing programs."
• $50,000 to the Ethiopia Community Service and Development Council "to enhance its ongoing programs."
• $50,000 to the CuDC "to support the Source Theater’s operational efforts."
• $100,000 to the Gala Hispanic Theater "to support GALA’s operational efforts."
• $75,000 to the Vietnamese-American Community Service Center "to enhance its services to the community."
• $50,000 to the Wilderness Leadership and Learning (WILL), "a positive youth development program focusing on using the outdoors as a learning resource."
• $75,000 to Educational Organization for United Latin Americans "to maintain the Center’s ongoing efforts to support Latin American seniors in the District."
• $50,000 to New Futures "to support their scholarship fund for young people living in poverty to attend vocational training programs and colleges."
• $50,000 to Mt. Pleasant Main Street "to support street cleanup (“Green Team”) and business development in the Mount Pleasant neighborhood, including historic way finding signs produced by DDOT."
• $125,000 to the Dance Institute of Washington "to enhance its ongoing programs."
• $75,000 to the Barbara Chambers Children's Center
• $100,000 to the Joseph’s House
• $75,000 to the Latino Economic Development Corporation "to support its Small Business Development program and the expansion of the Local First DC program in Wards 1 and 4."
• $100,000 to Jubilee Housing "to support its Jubilee JumpStart program to promote bilingual care and education for infants, toddlers and preschoolers in Jubilee Housing and for low-income neighbors."
• $250,000 "to fund capital improvements at the 12th Street YMCA/Thurgood Marshall Center."
• $250,000 "to fund capital improvements at the Mary Church Terrell House."
• $150,000 "to support storefront improvements in the Georgia Avenue and 14th Street Corridors."
• $250,000 "to fund capital improvements at the U Street Foundation."
• $50,000 to Mt. Pleasant Main Street "to support street cleanup (“Green Team”) and business development in the Mount Pleasant neighborhood, including historic way finding signs produced by DDOT. As such, this initiative is also described in that section of this report."

Once again, LL, as a five-year resident of Ward 1, expresses his thanks to his councilmember.

Last spring, Mayor Adrian M. Fenty and the D.C. Council took heat from LL and others for their earmarks in the yearly budget. In his initial FY09 budget proposal, Fenty included $27 million in noncompetitive grants, which the council later upped to $70 million. Things got to the point that Council Chairman Vincent C. Gray pushed through new restrictions on the earmarking practice.

Needless to say, in these times of fiscal rectitude, earmarks are very, very hard to come by, and this year's draft budget legislation no longer includes the exhaustive list provided in the past. But the earmarks are still there; they're just smaller and harder to find. One honeypot that LL has been able to identify is the Neighborhood Investment Fund---a pot of money set up as a sop to the Washington Interfaith Network and other activists during ballpark negotiations in 2004. The NIF, which is funded with up to $10 million yearly from personal property tax revenue, was intended to fund revitalization projects in a dozen underserved neighborhoods through a rigorous planning process.

The mayor is proposing taking $11.6 million from the NIF and spreading it to various places around the government. Much of it, under the proposal, is to stay under the control of the deputy mayor for planning and economic development---for instance, a $2.1 million subsidy to "fully fund the operating expenses of parking operations" at the DC USA development in Columbia Heights. And another $2.4 million is being set aside, vaguely, to "[r]estore adequate funding for current economic development operations."

The fact that the DC USA parking garage, built with $42 million in District funds, needs a $2 million yearly operating subsidy is little surprise, considering that the garage has been rarely more than half full since the project opened last year. In a message to constituents last May, Ward 1 Councilmember Jim Graham reported that on average, only 250 of the garage's 1,000 spaces were being used. (Greater Greater Washington has been following the DC USA parking folly closely.)

Sean Madigan, a spokesperson for the deputy mayor's office, says the $2.4 million is "pretty mundane stuff, actually"---money intended to fix accounting issues from last year's budget. As for DC USA, he says, "The center's doing great and it's really meeting and exceeding expectations" in general. As for the parking, he says, the city expects greater use of the garage in the future: "We're working on a couple of steps so that we get the biggest bang for our buck there."

Now, neither of the aforementioned line items seems to be in keeping with the original intentions of the NIF, but other mayoral directives are easier to defend---such as $3 million for "human capital development services" in struggling areas. And there's capital-improvement funds totaling $850,000 to be sent to Rachael's Women's Center and the D.C. Center. Some $900,000 is intended to fund playground renovations in Shepherd Park. Bread for the City and D.C. Central Kitchen, both well-established nonprofits, are getting $250,000 each. More than $1.5 million is going to fund various arts organizations through the Commission on the Arts and Humanities---CityDance, the D.C. Jewish Community Center, the Duke Ellington Jazz Festival, the Kennedy Center, the Washington National Opera, and the Washington Performing Arts Society all get $250,000 under the proposal, with Dakshina Dance Company getting $75,000.

Budget maven Ed Lazere of the D.C. Fiscal Policy Institute, informed of the mayor's moves, expresses some concern: "It seems like they're using the [NIF] in part just to plug holes in the mayor's budget....In some ways, it's not a huge problem [that they're not following the NIF process]...but it seems like some of these things aren't in keeping with the spirit of the law, which is to fund neighborhood projects."

Flickr photo by tvol