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No Funds, No Festival: '15 Adams Morgan Day Canceled Amid Sponsor’s Turmoil

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Adams Morgan Day has taken place since the late 1970s, drawing tens of thousands of people to the Northwest D.C. neighborhood on the second Sunday in September.
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Adams Morgan Day has taken place since the late 1970s, drawing tens of thousands of people to the Northwest D.C. neighborhood on the second Sunday in September.

Michele Banks has shown and sold art at the annual Adams Morgan Day since 2000. The D.C. street festival — once billed as the "East Coast's biggest block party" — has taken place for the last 36 years, and regularly draws tens of thousands of people to the neighborhood.

“It’s definitely a really good event, and it’s consistently good. As an artist, that’s hard to find,” Banks says. “There really aren’t that many events where every year people really come and there’s a big crowd and they support the artists.”

But Banks recently found herself asking why she hadn’t yet heard anything about this year’s festival, which is organized months before its takes place in early September. Last week she got her answer: The city’s longest-running street festival had been quietly canceled.

Beset by a crisis of leadership, tens of thousands of dollars worth of unpaid bills to the city and a possible federal investigation into financial irregularities linked to a former D.C. Council candidate, the organization that sponsors the festival — Adams Morgan Main Street — recently concluded that it wouldn’t be able to put on the festival in 2015.

The decision — made public via an announcement on the organization’s Facebook page — comes as Adams Morgan struggles to redefine itself in a city that has seen an explosion of nightlife options in other neighborhoods. It has also left many artists and other vendors looking for other options for the year.

“I’m not going to say it’ll ruin my year, but it’s not good,” Banks says.

Turbulence in Adams Morgan

While the public announcement cited no reason for the cancellation, multiple business owners and board members at Adams Morgan Main Street say that the decision comes in the wake of years-long turbulence within the organization.

Members of the board say they have discovered unpaid bills to vendors and city agencies from last year’s festival, and have not communicated with the organization’s president, Marc Morgan, for months.

They also say that Morgan, who took over in 2013, has not been forthcoming about the organization’s finances. As a consequence, they say they don't know how much money they have — or do not have — to put on the festival, which costs roughly $100,000 to organize. (The festival has broken even, or made a small profit, in recent years.)

The board members say Morgan set up multiple bank accounts and commingled personal and organizational funds. Even more seriously, they say he may have transferred money between the organization’s account and the account he used to finance his unsuccessful 2014 run for an At-Large seat on the D.C. Council.

Morgan, for his part, denies all the charges, saying that he's suffering the same fate as his predecessor: initially praised for doing good work, but unfairly vilified as soon as he departed.

"Everyone who takes the helm of this is accused of this. My predecessor was. There was no mismanagement," he says.

Problems with the books?

Jim Nixon, co-owner of Toro Mata — a store on 18th Street NW that sells Peruvian arts and crafts — says that the problems at Adams Morgan Main Street quickly became apparent to him after he was asked to serve as the organization’s treasurer in May 2014. Prior to that, Morgan served as both president and treasurer.

“I found it impossible to get the documents, bank records, information on income and expenses. I found it impossible to gather all that information. [Morgan] possessed it and just was not forthcoming with it,” Nixon says.

As Morgan eventually turned over financial records and handed over access to bank accounts, Nixon says he noticed a troubling pattern of money being moved between accounts that Morgan controlled, including his personal and campaign accounts. When Nixon was given access to a new account Morgan had opened in July 2014 for the organization, he noticed an unexplained deposit for $4,347 from Morgan’s campaign account.

“We discovered that there was also what appeared to be commingling of campaign finance accounts with the Main Street account,” says Nixon of Morgan, a two-time Republican candidate for the Council and former advisory neighborhood commissioner for LeDroit Park.

“Marc indicated that that was a teller error that caused that, but gave us no access to any information to find out where the funds had been, for how long or how much. We were not able to see any records prior to July 11 of last year to know where those funds had gone and where they exist today,” Nixon says.

Official records haven’t help: The organization hasn’t filed required tax forms since 2012.

But Morgan says it wasn't at all confusing. In fact, he says used personal funds to help the organization.

"I took out a small line of credit for the festival back in ‘13 because we didn’t have any money, so that’s what they’re talking about when they say commingling of personal funds. In terms of campaign funds, that’s ridiculous," he says.

On the money that came from his campaign account, he says he donated leftover funds from his ANC account to the organization.

But Nixon largely dismisses Morgan's claims, saying he heard those personally. He also says that the more he looked at what he was getting from Morgan, the more confused he became.

“We had questions everywhere we looked,” Nixon says. “Every time we did get one document to examine, it just raised 20 more questions.”

Overdue bills

Despite concerns over the organization’s finances and some logistical hiccups, the festival successfully took place in 2014. But it was only afterward that Nixon became aware that bills to city agencies and vendors — some of which Morgan said had been paid — remained unpaid.

Earlier this year, Nixon was presented a stack of bills owed to the city: $19,749.08 for police officers that worked the 2014 festival, $5,850 to the D.C. Department of Transportation for water barriers and $2,848.92 to the D.C. Department of Public Works for cleaning up after the festival ended, among other bills.

Private vendors have also called in unpaid debts. One of those vendors is Avner Ofer, who for 12 years has helped run Arts on Belmont, an artists-only offshoot of the festival that takes place on Belmont Street NW. He says Morgan owes him $6,300 for the 2014 festival.

Like Nixon, Ofer says that Morgan has fallen out of contact since last year.

“He doesn’t answer phones, he doesn’t answer emails, he doesn’t reply to letters, he doesn’t reply to anything. He disappeared off the face of the planet, in many ways. I had to show up at his home, I had to show up at his work downtown in order to get a hold of him. I literally knocked on his door and said, ‘Where’s my money?’” Ofer says.

Nixon doesn’t have an exact figure, but he guesses that Adams Morgan Main Street owes city agencies and private vendors more than $50,000 for the 2014 festival.

Morgan concedes that there are unpaid bills to the city, as well as to vendors like Ofer. But he says that the board itself had wanted to end it relationship with Ofer, which had been formalized under the leadership of Lisa Duperier, who established Adams Morgan Main Street in 2002 and ran it until 2012.

Ofer admits that issues within the organization predate Morgan, but says that they got worse once he took over.

“They had internal issues within the board, but in terms of festivals it always happened, we got sponsors, everybody got paid and it always made money. Over the last two years they squandered it," he says.

An investigation

In late 2014, Nixon and board members wrote a letter to outgoing U.S. Attorney for D.C. Ron Machen asking his office to investigate Morgan’s handling of the organization’s finances — and possible violations of IRS, banking and campaign finance laws.

“We had taken it as far as we could. It became apparent that absent subpoena authority, we were not going to get that information,” Nixon says.

Bill Miller, a spokesman for the U.S. attorney’s office, says he cannot confirm or deny whether an investigation is underway, but Nixon says that he was recently interviewed by an FBI agent.

The D.C. Office of Campaign Finance may also may investigating. It launched a random audit of Morgan’s campaign account earlier this year, and recently fined him close to $2,500 for failing to produce requested documents and appear at audit hearings.

Court records show that Morgan has also faced two recent lawsuits. In one, his landlord accused him of not paying rent for the property he used for his campaign. Morgan eventually paid and later moved out. In another, the campaign manager for Morgan’s Council run claims that he was never paid for three months of work. In March, a court ruled that Morgan owed his former campaign manager $4,700.

Morgan says those lawsuits were merely misunderstandings that were eventually settled.

A poisonous environment

Morgan says that much of the accusations against him stem from the difficult and fractious politics within Adams Morgan itself.

"Had I known when I signed up for this, I never would have gotten involved. Looking back at the history of everyone who has served in the leadership of the organization, it has always been the same thing: they’re running it, they do good things for a couple of years and then as soon as they leave they’re accused of being a crook," he says.

Duperier, who founded Adams Morgan Main Street and was replaced by Morgan, still fuels passioned disagreements. Her defenders say she helped sustain and grow the lively festival, while critics accuse her of much the same financial mismanagement as Morgan now is.

One person with knowledge of the festival and Adams Morgan Main Street who spoke on background to avoid recrimination says that while the difficult politics of the neighborhood may be fueling some of the accusations against Morgan, there may be some truth to them. But even there, the accusations of wrongdoing could extend past Morgan.

"I don't know if they guy is a thief, but he wasn't forthcoming with the truth — which he needed to be," they say. "But there is more than one person who's record is besmirched."

A last attempt to save the day

After falling out of touch with Morgan, Nixon and other board members went about trying to salvage the 2015 festival. But it quickly became apparent that without paying outstanding bills to the city, they would not be able to get required permits for the festival — which closes down a stretch of 18th Street NW from Florida Avenue to Columbia Road — in 2015.

There are other obstacles. Nixon says he does not know whether the organization would be able to put up the $100,000 it regularly takes to put on the festival. The website for the organization and festival have expired, and banners and other materials needed for the festival were kept by Morgan. (They were stored in his ANC office until late last year. He did not run for re-election.)

Additionally, there are even questions as to the name of the festival. “Adams Morgan Day” was trademarked by Adams Morgan Main Street in 2006, but with doubts around who controls the organization and whether it even exists anymore, there are concerns that Adams Morgan Day couldn’t be called that again.

By June, Nixon and others knew that putting on the festival was simply impossible. Even Council member Brianne Nadeau (D-Ward 1), who represents the area, says that the problems within Adams Morgan Main Street are significant enough that there isn’t anything she can do to salvage it.

“We’ve tried to be helpful, but we can’t undo the past. We’ve tried to be as supportive as we can, but they’re just in such a difficult situation. It’s very, very hard to know if there’s anything we could have done differently, but there’s nothing you can do about bad actors. Hopefully justice will be served in this situation and we’ll get back to things next year,” Nadeau says.

Hopes for the future

That’s what Nixon hopes. He says that losing the festival for this year will have an impact, both on the neighborhood and on him.

“It’s a great community asset, a source of pride. We draw tens of thousands of people here every second Sunday in September. As a businessperson, it’s probably my best sales day in September. We’re all taking a hit, both in community pride but also a financial hit,” Nixon says.

Other business owners say the hit will be especially hard given how Adams Morgan is struggling to remain relevant as other neighborhoods — including the nearby U Street NW area — replace it as a nightlife destination.

“It’s really tough. There are more and more businesses coming into the city and more areas are becoming gentrified with bars and restaurants and places to go. Adams Morgan is one of the oldest destinations for entertainment, and not having the festival would be really devastating for a lot of people. To not have it, it would be a big morale blow,” says Amy Bowman, who co-owns The Black Squirrel and Libertine and serves on the board of Adams Morgan Main Street.

Bowman tries to remain upbeat, and says that she hopes that even if the festival isn’t held again until 2016, something impromptu — albeit much smaller — can replace it this year.

“I know we’ll have a festival again. I hope the businesses can get together this year and put together some kind of celebration of the day," Bowman says. "It won’t be Adams Morgan Day, but maybe we can do a celebration of the day that it’s historically held on."

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