Feds: DC mayor knew of illicit 2010 'shadow campaign'

  • FILE: Dec. 6, 2013:  District of Columbia Mayor Vincent Gray speaks in Washington.

    FILE: Dec. 6, 2013: District of Columbia Mayor Vincent Gray speaks in Washington.  (AP)

  • March 10, 2014: Washington businessman Jeffrey Thompson as he enters the federal courthouse in Washington, D.C.

    March 10, 2014: Washington businessman Jeffrey Thompson as he enters the federal courthouse in Washington, D.C.  (AP)

D.C. Democratic Mayor Vincent Gray knew about an illicit “shadow campaign” that boosted his 2010 election run, federal prosecutors said Monday, a startling revelation in the years-long federal investigation into the off-the-books campaign activity. Gray has steadfastly denied such knowledge.

Assistant U.S. Attorney Michael Atkinson made the claim while charging wealthy District of Columbia businessman Jeffrey Thompson, who pleaded guilty for his part in conspiring to violate federal and local campaign finance laws by funding under-the-radar campaign activity for candidates including Gray and fellow Democrat Hillary Rodham Clinton.

He said Gray personally requested the funds from Thompson, who pleaded guilty to two conspiracy charges. Atkinson said that Gray presented Thompson with a one-page budget for $425,000 and asked him to “pay for a get-out-the-vote campaign,” to which Thompson agreed.

Gray has not been charged with a crime and has denied any wrongdoing in the 2010 campaign. Robert Bennett, Gray's lawyer, said Monday the mayor continued to maintain his innocence, calling the claims mere "allegations." 

"The mayor's position on that is that it is absolutely not true," Bennett said. "That has not changed one bit." 

Thompson in pleading guilty reportedly admitted to channeling hundreds of thousands of dollars into a campaign operation for somebody identified in court papers as “Mayoral Candidate A,” in the 2010 mayoral race in the District. 

The accusations against Gray and the charges against Thompson come three weeks before the district's Democratic mayoral primary, in which Gray is seeking re-election against seven challengers.

The winner of the primary will likely win the November general election and become mayor in the heavily-Democratic city.

It was unclear what prosecutors will do next, as city residents and others continue to wait and guess whether the probe might eventually lead to charges against Gray.

Though the mayor has denied wrongdoing, he has not answered specific questions about his knowledge of Thompson's activities.

Chuck Thies, Gray's campaign manager, issued a statement Monday that pointed out Thompson’s charging documents do not implicate Gray.

"No one has suggested that Hillary Clinton knew of Thompson's illegal activities,” Thies said. "Mayor Gray has not been afforded the same presumption of innocence."

The new accusations are just the latest in a series of legal problems casting a long shadow over City Hall. Since 2012, three City Council members have pleaded guilty to federal corruption charges.

According to the document, Thompson, the former owner of a well-connected accounting firm, funded illicit campaign activity for Clinton, Gray and seven other candidates for local office in the district. All told, the efforts were valued at more than $2 million.

Prosecutors also said Thompson exceeded contribution limits by using straw donors and funneling money from his corporation through intermediaries. Thompson contributed more than $500,000 to local candidates and more than $250,000 to federal candidates and political-action committees over a six-year period, according to the 10-page document.

Thompson, 58, had long been suspected of giving money to Gray's 2010 campaign to fund get-out-the vote and other efforts, and the document put the value of the shadow campaign at $668,000. He was also charged with pouring $608,750 into Clinton's 2008 presidential bid. The efforts to help Clinton were detailed in a previous case against a Thompson associate.

The document details shadow campaigns for eight candidates for office in the district, with a total value of nearly $1.5 million. The most recent race Thompson sought to influence, the document shows, was a race for an at-large City Council seat in 2011, which Democrat Vincent Orange won with support from Thompson's network of donors. Orange, who has acknowledged handing over documents related to his 2011 campaign to federal investigators, is also running for mayor this year. He did not immediately return a call seeking comment but also has denied wrongdoing.

Thompson also ran a $278,000 shadow effort for a mayoral candidate in 2006, the document shows. Adrian Fenty defeated Linda Cropp in that year's mayoral primary, and Cropp received contributions that year from Thompson and his associates.

Federal authorities searched Thompson's home and offices two years ago. Since then, U.S. Attorney Ronald Machen has built a case against Thompson by targeting his associates, five of whom have pleaded guilty to felonies.

Two close friends of Gray who worked on his 2010 campaign were among those who pleaded guilty. Two others pleaded guilty to making straw contributions to political candidates on his behalf, and another acknowledged using illicit funds to help Clinton's presidential bid in Texas and other primary states. The cases outlined Thompson's extensive financial backing of his favored candidates for federal, state and local office.

Thompson would tap into a vast network of donors, including employees, business associates, friends and relatives, many of whom would make large donations to his chosen candidates on the same day, campaign finance records show. After the allegations surfaced, several candidates donated the amount they received from Thompson to charity.

Federal prosecutors were looking at possible links between Thompson's support for Gray and a settlement that his health care company received after Gray took office. Administration officials strongly denied any wrongdoing related to the settlement, which was approved by the D.C. Council.

The Associated Press contributed to this report.