Former DC councilman pleads guilty to bank fraud

The former chairman of the District of Columbia Council pleaded guilty Friday to lying about his income on bank loan applications, the latest blow to a city government rocked by scandal.

Kwame Brown, who resigned his seat earlier this week, admitted in federal court to submitting false documents, including forging the name and signature of a college friend and overstating his income by tens of thousands of dollars. The falsehoods were on bank applications to acquire a home equity loan and a loan for money to buy a boat. His plea comes five months after another councilmember admitted to stealing funds earmarked for youth sports programs.

The two resigned five months apart, and their departures this year — coupled with a federal probe of Mayor Vincent Gray's 2010 campaign that has already produced guilty pleas from two aides — have sent the city government into a tailspin. And the scandals likely aren't helping efforts to gain greater budget autonomy, much less win a vote for the D.C. delegate to Congress or to secure the long-sought goal of statehood.

Corrupt officials have been brought down in other cities, including Detroit and Chicago, but the problem is magnified in a city where the governing body has 13 members, effectively functions as a state legislature and operates less than three blocks from the White House.

"Whether it's resignations, investigations, whatever it is — I think it's had a very bad effect," said Councilmember Mary Cheh, now the panel's acting chair. "People are feeling demoralized, I think they're feeling disappointed."

Cheh said the pleas and investigations risk setting back the goal of gaining more autonomy for District residents.

"It certainly gives (critics) ammunition to say, 'What kind of a system are you running over there?'" she said.

Long-running investigations by the U.S. Attorney's Office for the District of Columbia have rattled nerves inside the city government complex and yielded significant developments in recent months.

On Wednesday, Council Chairman Kwame R. Brown was accused in federal court of falsifying his income by tens of thousands on bank applications for a home equity loan and for a boat. He resigned his seat following a closed-door meeting with council members. On Friday he pleaded guilty in federal court and was expected to make another court appearance on a separate misdemeanor campaign finance violation that was also brought this week in D.C. Superior Court.

Brown was by turns remorseful and defiant as he addressed reporters after the federal plea hearing, noting that he has not been charged with stealing or misspending campaign funds, despite a lengthy federal investigation. His voice broke as he apologized to his family and the public.

"It has been a long and difficult journey," he said. "Today I am taking the first step in regaining the trust of the people that I love and serve."

The charges come five months after another councilmember, Harry Thomas Jr., pleaded guilty to embezzling more than $350,000 in public money earmarked for youth sports and arts. He also resigned and was sentenced to more than three years in prison.

Last month, two former Gray campaign aides pleaded guilty to charges arising from his 2010 mayoral campaign. One aide admitted lying to the FBI about straw donations to a minor candidate in the race and the other aide admitted funneling the money and destroying evidence of the transactions. The payments were intended to keep the candidate, Sulaimon Brown, in the race so he could continue assailing then-Mayor Adrian Fenty as he sought re-election.

Gray has denied wrongdoing and has not been directly implicated. But the investigation continues and the issue has dogged the mayor since two months after he took office, when Sulaimon Brown alleged to The Washington Post that he had been paid and offered a job if Gray won.

Investigators in March also raided the home and offices of Jeffrey Thompson, a well-connected government contractor who was a major contributor to Gray's campaign and to other local officials.

"It's disheartening to say the least, especially when I had supported some of those people who are now under investigation," said Laina Aquiline, a neighborhood leader in the northwest Washington community of Columbia Heights.

There's nothing new about political scandals in the capital city. Marion Barry drew national attention when, as mayor, he was caught on video smoking crack cocaine in 1990. He served six months in prison for cocaine possession. Barry staged a comeback, winning a fourth and final term as mayor, when Congress seized control of city government following years of poor fiscal stewardship. Barry returned to the council in 2004 and has kept his seat despite other legal troubles.

While Brown and Thomas have left the council, an investigation of city leaders continues.

The allegations come at a delicate time for the city, as district advocates have been lobbying Congress for more autonomy on fiscal affairs. Although district residents were given the freedom to elect a mayor and city council in 1973, Congress has the final say over the district's budget and laws.

Nick Jeffress, executive director of the D.C. Republican Committee, said the scandals should make voters think extra hard about electing honest leaders who will have the clout and respect to push the statehood cause.

"We need to have that at the forefront of our minds — who are we electing and what sort of baggage might they bring," Jeffress said. "We need to focus on electing councilmembers who in turn will be able to lobby, hopefully with greater results, to Congress."

But Aquiline said she wasn't convinced the scandals would harm the movement.

"My personal hope would be that it would actually work in the opposite fashion," Aquiline said. "I actually think you would have more well-qualified citizens for such a position if we believed that our voice had any power."

Council members will meet next week to select an interim chair from among four at-large members. Cheh said the city government is still functioning and officials will work to win back trust.

But, she noted, "This is a stain on the government."