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In Fight For Deals, Developers Make Well-Timed Campaign Contributions

Day 4: Deals for Developers, Cash for Campaigns

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Construction on the Marriott Marquis Convention Center Hotel on June 6, 2012. (Flickr photo by thisisbossi)
Construction on the Marriott Marquis Convention Center Hotel on June 6, 2012. (Flickr photo by thisisbossi)

Seven years ago, during D.C.’s real estate boom, the District asked developers to submit proposals to build on public land in the Southwest waterfront area.

Dozens of developers lined up for a shot, forming 17 development teams in early 2006. They could potentially score the land and receive other subsidies but they’d have to provide affordable housing and meet other criteria.

That's why controversy emerged when the winning team later wanted to relax affordable housing requirements.

What most people didn’t know is that months before the city’s economic development committee approved scaling back the affordable housing, five of the companies on the development team made nine campaign contributions, on the same day, to the chairman of the committee, then-Council Member Kwame Brown. The council approved the plan shortly after the committee vote.

A WAMU investigation found a dozen developers donated the most the year their subsidy was approved. In addition, the investigation identified ten cases in which campaign contributions were recorded as being made on the same day, to a single candidate, by three or more developers working jointly on subsidized projects. In some cases, the subsidies were proposed or approved around the same time.

Two of the 110 projects examined that received the largest subsidies — the Wharf and the convention center hotel — are among those with developers contributing on the same day and around the time legislation was proposed or approved.

“The timing of a contribution is important,” said Sheila Krumholz, with the Center for Responsive Politics. “There have been times when contributions have come in right around a vote, before a vote. That might be a kind of carrot. There might also be an element of reward if a vote is taken that favors a special interest or donor.”

The investigation also found 133 groups donated more than $2.5 million in campaign cash and received $1.7 billion in subsidies over the past decade

“Trust is undermined if money is being exchanged with patterns like the ones [WAMU has] discovered. It gives rise to reasonable suspicions,” said Dennis Thompson, a political philosophy professor at Harvard and director of the university’s Edmond J. Safra Center for Ethics. “Is the subsidy going to the right person?”

Explanations for timing

Developers said the timing of the contributions was coincidental or several companies may have donated on the same day because they called each other to rally support for a candidate they liked.

Fred Cooke, an attorney who has represented developers, council members and others, said he’s never been associated with any projects in which the developers felt obligated to make campaign contributions to get council approval for something. If the project is good, he said it speaks for itself.

“I have seen people with proposals that I might not have considered the best or most well thought out or the most realistic,” he said. “I’ve seen those people try to influence council people by making contributions to their campaigns and hoping that will get them some favorable treatment. Usually that doesn’t work...You can’t turn chicken poop into chicken salad.”

He said there is a “perfectly innocent” explanation for why some companies turn in contributions on the same day: Someone thinks a certain candidate should be elected so they recruit their friends or associates to donate.

“We may talk together and say, ‘Let’s give Council Member x the maximum contribution.’ It’s not a bribe. We know elected officials need money,” he said. “Yeah, we turn them in on the same day. But that’s the reason...One person is the point of contact, sort of rides the herd on it.”

Local organizers had another possible explanation for the timing of certain contributions.

“The campaign contributions are definitely part of what is fostering these political relationships where there’s basically a quid pro quo or some kind of benefit that’s delivered,” said Parisa Norouzi, executive director of community group Empower D.C.

Subsidies for a waterfront development

At the Southwest Waterfront project, called the Wharf, developers have been awarded more than $290 million in subsidies to build a hotel, homes, a park and waterfront shops and restaurants.

On July 20, 2010, five companies on the development team — PN Hoffman, CityPartners, E.R. Bacon, Paramount Development, and Triden Development — and their affiliates gave $9,500 in campaign contributions and later that year, in December, the council approved a bill to effectively cap the number of affordable housing units that would be built.

The lead developer, PN Hoffman, said the campaign cash didn’t make any difference.

“Any suggestion that one or more political contributions to a council member could impact the project is simply naive and inaccurate,” said a spokesman for PN Hoffman, the lead developer.

The other developers could not be reached for comment. Brown declined to comment

Contributions to a single candidate from the Wharf's developers
Both mayoral candidates score contributions

Developers and affiliates of the massive convention center hotel project donated on the same day at least three separate times.

For instance, in 2006, three of the developers — Capstone Development, Quadrangle Development, RLJ Companies, and their affiliates — donated $9,500 for then-Council Member Linda Cropp's mayoral campaign. The contributions were made on the same day — a month before Cropp sponsored legislation to award nearly $200 million in subsidies for the project.

Later that year, after then-Council Member Adrian Fenty won the Democratic nomination for mayor, the same three developers — and another on the project, Marriott — gave $7,000 to his campaign on the same day.

Cropp and Fenty could not be reached for comment. RLJ declined to comment and the others could not be reached.

Contributions to two council members from the convention center hotel's developers
“Money helps a campaign”

On July 10, 2011, Council Member Yvette Alexander proposed a tax break for a project called the Nannie Helen at 4800. About a month later, three companies on the development team, A. Wash & Associates, Blue Skye Construction and The Bozzuto Group, and their affiliates made several donations worth $2,000 to Yvette Alexander.

The legislation was later withdrawn.

Bozzuto said in a statement that it’s extensively involved in D.C. and other places: “When we can, we try to support elected officials who we think bring wisdom, common sense and reason to governance. We felt, and still feel, that Councilmember Yvette Alexander is someone we are proud to support.”

The other companies could not be reached for comment.

“Money helps a campaign. I’m going to be honest about that,” said Council Member Alexander. “But I can give you several examples of people who gave me money and I didn’t support their effort on something.”

She said she often tells developers she’ll take the contribution but they shouldn’t expect anything in return: “They have a lot of money to give out and if any developers are listening, you can give to Yvette Alexander’s constituent fund and help me out.”

Timing of affiliates’ contributions

Some companies donate the most the year the Council approved a subsidy. Take Chapman Development, in the past decade, the company and its affiliates donated the most campaign contributions to D.C. political campaigns in 2010 — the year the Council approved $2.6 million in tax breaks for two of Chapman's buildings called Grays on Pennsylvania and the Lotus. Five of 23 contributions that year were made on Jan. 27, 2010 — the day the legislation was proposed.

Critics noted the projects were already built and leasing apartments when the tax breaks were approved. What’s more, the Grays project had already received more than $10 million in other government funding and tax breaks and its tenant, a grocery store, received a $900,000 city grant, according to city documents.

“It isn’t clear why these projects now need a tax abatement,” Jenny Reed, a policy analyst at the D.C. Fiscal Policy Institute, said at a city meeting before council members voted to approve the subsidy.

Tim Chapman, managing member of Chapman Development, said the contributions – and the use of affiliates – were not intended to buy influence, but he would not elaborate.

At a city meeting on the proposed tax breaks, Chapman said the subsidies would allow him to continue his practice of trying not to evict people who are behind or late on rent. “It’s a constant struggle in these communities,” he said.

“Lot of influence” at city hall

Redevelopment plans for the Hine School, currently home of the Eastern Market farmer’s market, have been in the works for years.

The city picked the development team and months later, in February 2010, four of the developers on the team — Stanton, Dantes Partners, EastBanc, L. S. Caldwell & Associates and their affiliates — made nine contributions worth $3,500 to Councilman Tommy Wells on the same day. The council formally approved the land subsidy for the development later that year.

Wells, who is running for mayor, said it’s hard to avoid the appearance of conflicts with the current system.

He said he told the Hine School developers to hold off donating to him until after the city picked a developer: “I wouldn’t have anything to do with them during the bidding process.”

They then donated to him after they were picked: “I knew that they had provided no influence to me but I know that it can look otherwise.”

Wells said during an interview at the Wilson Building that he has made campaign finance reform a key platform for a reason: “It does look like we have been influenced...I do know there is a lot of influence in this building and it’s not local citizens but it’s people attached to large money.”


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