Gray Donor Pleads Guilty To Conducting 'Shadow Campaign'

Eugenia Harris also admits to role in straw donation scheme

Eugenia Harris, also known as Jeanne Clarke Harris — a longtime associate of big-time political donor Jeffrey Thompson who was also affiliated with Mayor Vincent Gray's campaign — pleaded guilty in court Tuesday of conspiracy, fraud and campaign finance charges. She now faces up to 37 months in prison.

Federal prosecutors detailed a so-called "shadow campaign" that was created to help reelect Mayor Gray in 2010 and purposely kept off the books. Clarke admitted that more than $600,000 was given to her and her company by an unnamed co-conspirator, thought to be Thompson. This money was then spent to get voters to the polls, to pay for canvasing, and to fund other activities. This money and these expenditures were never reported to the Office of Campaign Finance.

When federal authorities started probing the mayor's 2010 campaign last year, Harris and this co-conspirator wrote up a false business contract and amended her tax return to cover her tracks and conceal where this money came from. The two also amdended IRS forms to pay taxes on the off-the-books activities, and the co-conspirator even tried to send Harris to Brazil to avoid federal authorities, said the U.S. Attorney for the District Ron Machen.

Harris and a co-conspirator also admitted to taking part in a straw donation scheme. They were aware of the limits on federal campaign contributions, she says, and circumvented those limits by funneling money to friends, family members and others to make unlawful political contributions.

That money, according to prosecutors, was later paid back to Harris by this co-conspirator.

There were more than a dozen straw donor contributors involved, according to the document, and the contributions were made to various federal and local campaigns over the years. The court Harris and several of her family members were connected to a set of suspicious money orders that were donated to political campaigns last year. The court document details $44,000 in straw donations to Mayor Gray's 2010 campaign.

A firm owned by Harris also allegedly deducted more than $900,000 in political expenditures on its 2010 tax return, something corporations are not allowed to do, according to prosecutors.

Harris was paid by Gray's campaign in 2010 for communications work. Harris is the third person associated with the mayor's 2010 campaign to be indicted.

In the end,  Machen said at a press conferences after Harris' plea, the 2010 mayoral campaign was corrupted by the backroom deals, secret payments and unreported cash.

"Today's plea confirms the sad truth that many of us have long feared," said Machen. "The 2010 mayoral election was corrupted by a massive infusion of cash that was illegally concealed from the voters of the District."  

The big question now: what did Gray know about this?