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August 23, 2014

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DC mayor denies he knew of illegal shadow campaign

WASHINGTON — District of Columbia Mayor Vincent Gray denies he knew of an off-the-books "shadow campaign" to support his 2010 bid and personally requested the funds from an influential district businessman, he said Monday.

Assistant U.S. Attorney Michael Atkinson disclosed the details in court when reading a document that described the activities of Jeffrey Thompson, the multimillionaire former owner of a well-connected accounting firm who pleaded guilty Monday to two conspiracy charges.

The allegations against Gray were included in a document detailing crimes alleged against Thompson.

Gray told WRC-TV (http://bit.ly/1nCCaVQ ) Monday he was not involved or aware of any illicit campaign activity, saying "these are absolute lies." Gray said he thought all the fundraising for his campaign was being done in a legitimate way and that he thought Thompson wanted to conceal his donations to Gray for fear of retribution from former Mayor Adrian Fenty's administration.

According to the document, Gray met Thompson for dinner at the apartment of another conspirator in August 2011 and presented Thompson with a one-page budget of $425,000 needed for get-out-the-vote efforts. Thompson agreed to pay that amount by funneling it through another company, the document said.

During an earlier meeting with Thompson, he told the mayor that he would find his campaign but that the contributions would not come from him or anyone associated with him, the document said. Thompson told Gray to say the money came from "Uncle Earl," and after the meeting to discuss the shadow campaign, Gray thanked Thompson and referred to him as "uncle," the document said.

Thompson's plea to conspiring to violate federal and district campaign finance laws comes as Gray seeks re-election against seven challengers in the Democratic primary, which is set for April 1. Gray has not been charged with a crime and has denied any wrongdoing in the 2010 campaign.

U.S. Attorney Ronald Machen said in a statement: "Today's guilty plea pulls back the curtain on years of widespread corruption. With Mr. Thompson's cooperation, we have the opportunity to hold many wrongdoers accountable and to usher in a new era of honesty, integrity, and transparency in D.C. politics."

In the "shadow campaign," off-the-books payments were used to pay for consultants, supplies and other expenses supporting Gray. The expenditures were never reported.

According to a criminal information filed in the case, Thompson funded illicit campaign activity for Hillary Rodham Clinton, Gray and seven other candidates for local office in the district. All told, the efforts, described previously by prosecutors as "shadow campaigns," 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 charging 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 council seat in 2011, which 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 he has previously denied all 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.

Thompson, a Jamaican immigrant, founded an African-American-owned accounting firm that received millions of dollars in local and federal government contracts. He was also the sole owner of D.C. Chartered Health Plan, a managed-care provider for district residents that had the single largest contract in city government, worth more than $300 million annually. The managed-care firm went bankrupt amid the investigation, and Thompson left the accounting firm.

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.

Associated Press writer Eric Tucker contributed to this report.

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