On Day That Thompson Pleads Guilty, Feds Say Gray Knew Of Shadow Campaign | WAMU 88.5 - American University Radio

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On Day That Thompson Pleads Guilty, Feds Say Gray Knew Of Shadow Campaign
Gray asked for Thompson's help, say prosecutors

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Jeffrey Thompson leaves federal court in Washington, after being charged this morning in a criminal information with two conspiracy offenses stemming from an ongoing investigation Monday, March 10, 2014. District of Columbia Mayor Vincent Gray was aware of an off-the-books "shadow campaign" to support his 2010 bid and personally requested the funds from Thompson, federal prosecutors said Monday.
(AP Photo/Cliff Owen)
Jeffrey Thompson leaves federal court in Washington, after being charged this morning in a criminal information with two conspiracy offenses stemming from an ongoing investigation Monday, March 10, 2014. District of Columbia Mayor Vincent Gray was aware of an off-the-books "shadow campaign" to support his 2010 bid and personally requested the funds from Thompson, federal prosecutors said Monday.

D.C. businessman Jeffrey Thompson on Monday pleaded guilty to two charges of conspiring to circumvent campaign finance laws, bringing to light new allegations surrounding Mayor Vincent Gray's troubled 2010 campaign.

Thompson, 58, entered guilty pleas on two felony conspiracy counts in federal court yesterday afternoon, after being charged for having used dozens of conduits — including two of his former firms and their employees — to make illegal campaign contributions to numerous candidates for elected office.

According to prosecutors, Thompson's schemes stretched from 2006 to 2012 and amounted to over $3 million in straw donations to local and federal candidates. He gave over $600,000 to aid a presidential candidate and wrote the illicit deductions off on his firm's taxes, and paid a D.C. mayoral candidate $200,000 to drop out of the 2006 race. (See the full statement of offenses here.)

But maybe the biggest bombshell of the day came when prosecutors said in open court that Gray knew of the Thompson-led "shadow campaign" that brought $653,000 to the effort to defeat then-Mayor Adrian Fenty. The revelations — strongly disputed by Gray — come a week before early voting is to begin and less than a month before the April 1 primary.

Gray personally Thompson for campaign funds, say prosecutors

Gray has long denied knowing anything of the $653,000 shadow campaign that Thompson waged on his behalf in 2010. But according to prosecutors, Gray not only knew of the illicit scheme, but he personally requested funds for it.

Thompson, who owned two firms that scored major city contracts worth millions of dollars, said he initially helped Gray by fundraising through his network of straw donors — people who would be illegally reimbursed by Thompson's companies after making a contribution to a specific candidate. He said he thought that supporting Gray would be better for his business.

But Thompson, concerned about retribution from Gray's opponent, then-mayor Adrian Fenty, wanted to keep his support for Gray secret. Thompson picked straw donors that wouldn't be associated with him — and to maintain secrecy — told Gray to call him by a codename: "Uncle Earl." Thompson's middle name is Earl.

A campaign report filed by the Gray campaign showed that he beat Fenty for the fundraising period in question. Many of the donations came from Thompson's network, all of which came in on June 10.

Later on in the campaign, an advisor to the mayor told Thompson he would need more money for a shadow campaign: a get-out-the-vote operation that would be kept off the books.

Thompson replied that he needed Gray to ask for the funds personally.

According to prosecutors, Gray brought a one-page handout to a meeting with Thompson detailing how $425,000 would be spent for a "get-out-the-vote" effort, coordinated with the official Gray campaign. Gray presented the document to Thompson, and Thompson agreed. According to court documents, Gray thanked him and called him "Uncle."

The meeting took place in the apartment of Eugenia Harris, who pleaded guilty to conspiracy, fraud and campaign finance charges in 2012 in connection with the shadow campaign.

Seven people associated with the campaign or Thompson have been charged so far.

Prosecutors also claim that Thompson gave $60,000 to personal friends and family of Gray after the election, in one case funneling $40,000 to a Gray friend for home repairs. He also asked Harris to convey his wishes to Gray that D.C. reach a settlement with one of Thompson's companies. The settlement later took place.

Thompson funneled $2.2 million to D.C. candidates

Thompson's illicit dealings far pre-dated Gray, said prosecutors today, amounting to $2.2 million for numerous mayoral and D.C. Council candidates over the years. All told, Thompson used 75 people to make straw donations.

In 2006, Thompson directed $278,000 to Linda Cropp, who was running for mayor against Fenty. He also gave $200,000 to Michael Brown to encourage him to drop out of the mayoral race. Brown, who was charged with taking bribes last year, took in an additional $100,000 for his victorious 2008 At-Large bid.

Thompson's money also ended up with D.C. Council candidates running in wards 1, 4 and 6, as well as with Council member Vincent Orange (D-At Large), who took in over $150,000 in Thompson's money in 2011. That year, said prosecutors, Orange not only benefited from Thompson's largesse, but also placed fundraising calls from Thompson's office.

A shadow campaign for Clinton

Federally, the charging documents stated that Thompson used 32 conduits to make contributions to 13 federal candidates — including presidential contenders — and one multi-candidate political action committee.

In 2008, Thompson marshaled $608,750 for a presidential candidate; last year it was revealed that a New York man received the money to do unsolicited campaign work for Hillary Clinton.

After spending the money, Thompson used his accounting firm to write off the contributions as "bonuses" and "fees" that could be deducted from the firm's taxes.

Gray calls Thompson a liar

Gray had previously denied knowledge of the shadow campaign that aided his defeat of Fenty. When asked again about the shadow campaign at the Democratic mayoral debate held in the WAMU Media Center on Feb. 26, Gray said: "I will assert, once again, that I did nothing wrong. We have done — we did nothing wrong in that campaign."

Gray reiterated that stance on Monday. In a video interview with NBC Washington's Tom Sherwood, Gray said that the allegations are "lies, absolute lies."

His campaign also responded, with campaign manager Chuck Thies writing in a statement that Gray could be no more responsible than Clinton was in knowing what was being done in their names.

“For too long, Mayor Gray’s political opponents, pundits and even news organizations have relied on innuendo instead of facts. No one has suggested that Hillary Clinton knew of Thompson’s illegal activities. Mayor Gray has not been afforded the same presumption of innocence,” said Thies in a statement.

Charges come as early voting nears

It is yet to be seen how the charges will affect the upcoming mayoral primary — early voting starts on March 17, the primary is on April 1 — but a recent WAMU/NBC poll found that a majority of potential voters would vote for someone other than Gray due to the allegations against him.

In the wake of today's revelations, mayoral contender Tommy Wells — the only member of the D.C. Council not to have received money from Thompson — said, "We’re glad that justice is prevailing." Muriel Bowser, who has polled closely behind Gray, said it was a "tragic day" but hoped that prosecutors would finish the job: "I am confident that prosecutors will push hard to ensure that all wrongdoers are brought to justice," she said.

'Tip of the iceberg'

At a press conference outlining the charges, U.S. Attorney for D.C. refused to offer any details on Gray or other candidates that had received support from Thompson. Still, he called the revelations the "tip of the iceberg" and said that Thompson cooperation would "last a very long time."

Machen also had a message for D.C. candidates who had worked with Thompson: "Come forward now and own up to your conduct. I promise you we are not going away."

Thompson Charts by maustermuhle

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