Former District of Columbia Council Candidate Pleads Guilty to Filing a False Statement on Campaign Finance Report
WASHINGTON—Jeff Smith, 40, of Washington, D.C., a former candidate for the Council of the District of Columbia, pled guilty today to a felony charge for filing a false and misleading report with the District of Columbia’s Office of Campaign Finance that concealed campaign contributions in excess of those permitted under D.C. campaign finance laws.
The guilty plea was announced by U.S. Attorney Ronald C. Machen Jr., Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, and Thomas J. Kelly, Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI).
Smith is the second candidate to plead guilty to charges in recent weeks. Kelvin Robinson, 53, pled guilty on June 3, 2014, in the Superior Court of the District of Columbia to a charge of conspiring to violate District of Columbia campaign finance laws by defrauding the District of Columbia’s Office of Campaign Finance. He is awaiting sentencing.
Smith also entered his plea in the Superior Court of the District of Columbia. The Honorable Anita Josey-Herring scheduled sentencing for Aug. 28, 2014. The charge of making a false statement or report carries a statutory maximum of five years in prison and potential financial penalties. Under the Court’s voluntary sentencing guidelines, the parties have agreed that Smith faces a range of six to 24 months in prison, or, possibly, probation.
The charge involves contributions to Smith’s 2010 campaign for the Ward 1 seat on the Council of the District of Columbia. Smith admitted that more than $140,000 was secretly channeled to his campaign from businessman Jeffrey E. Thompson. Smith lost the election.
Thompson is the former chairman, chief executive officer, and majority owner of Thompson, Cobb, Bazilio and Associates (TCBA), a corporation that provided accounting, management, consulting, and tax services. He also is the former chairman, chief executive officer, and owner of D.C. Healthcare Systems, Inc. (DCHSI), an investment holding and for-profit corporation. Both companies generated millions of dollars in government contracts.
Thompson and six others earlier pled guilty to charges involving Thompson’s illegal contributions to numerous federal and District of Columbia campaigns. In addition to Robinson, who also admitted receiving excess contributions from Thompson, the others who have pled guilty include Eugenia C. Harris, a business owner in the District of Columbia; Lee A. Calhoun, an executive for TCBA; Stanley Straughter, the owner of a business based in Philadelphia; Vernon Hawkins, who was a volunteer advisor in 2010 for a 2010 mayoral campaign; and Troy White, the owner of a marketing company based in New York.
Another person, former District of Columbia Council member Michael A. Brown, pled guilty to charges in an unrelated bribery investigation. In those proceedings, he publicly admitted that his campaign committees had secretly received money from Thompson.
As part of Thompson’s guilty plea, on March 10, 2014, he agreed to cooperate fully in an ongoing investigation. No date has been set for his sentencing.
“Three months ago, Jeff Thompson’s guilty plea pulled back the curtain on widespread corruption that tainted election after election, year after year in D.C. politics,” said U.S. Attorney Machen. “Today Jeff Smith became the third candidate to stand before a judge and confess to taking Thompson’s secret campaign cash. We commend Jeff Smith for acknowledging his misconduct and will press forward with our efforts to hold accountable all those who participated in under-the-table deals with Jeff Thompson.”
“Today, Mr. Smith admitted to accepting illegal contributions to his campaign for D.C. Council and to filing a report which concealed these illegal in-kind contributions to the D.C. Office of Campaign Finance,” said Assistant Director in Charge Parlave. “Along with our law enforcement partners, the FBI remains vigilant to abuses of campaign finance laws to protect the citizens of the District of Columbia from schemes within the electoral process.”
According to a statement of offense submitted as part of today’s guilty plea, from at least December 2009 through December 2010, Smith, Thompson and others acted to make and to receive – and to conceal – campaign contributions in excess of those permitted under the District of Columbia Campaign Act.
Smith admitted that Thompson, with his knowledge, provided more than $140,000 of in-kind contributions, contributions which were concealed from the Office of Campaign Finance. Smith provided a budget to Thompson in March 2010, seeking $140,975 for voter registration and get-out-the-vote efforts for his campaign. Then, from March 2010 until September 2010, Thompson used funds, via TCBA and DCHSI, to provide more than $140,000 in coordination with and in support of Smith’s campaign committee. At least part of this money was spent on campaign services and materials.
The District of Columbia Campaign Act imposes limits on the amount of money that can be contributed to a District of Columbia candidate and that candidate’s principal campaign committee. It also prohibits any person or corporation from making a contribution in the name of another, including by reimbursement. Finally, it requires principal campaign committees to file periodic reports of receipts and disbursements.
The law limits the amount that an individual or entity can contribute in the aggregate in the primary and general elections of a candidate seeking election to a Ward seat to $500.
In his plea, Smith admitted that, acting on behalf of his campaign committee, he filed, that is, authorized to be filed, a false and misleading report to the D.C. Office of Campaign Finance in December 2010. The report concealed the excessive and unreported in-kind contributions provided directly and indirectly by Thompson.
In announcing the guilty plea, U.S. Attorney Machen, Assistant Director in Charge Parlave, and Special Agent in Charge Kelly commended the work of those who investigated the case from the FBI’s Washington Field Office and IRS-CI.
They also expressed appreciation for the work of Assistant U.S. Attorneys Michael K. Atkinson, Jonathan P. Hooks, Ellen Chubin Epstein, Lionel André, and Ephraim “Fry” Wernick, of the Fraud and Public Corruption Section of the U.S. Attorney’s Office for the District of Columbia, who are prosecuting cases in the investigation.
Finally, they acknowledged the efforts of others who worked on the case from the U.S. Attorney’s Office, including Deborah Connor, Chief of the Fraud and Public Corruption Section, as well as Criminal Investigators Matthew J. Kutz, Mark Crawford, Melissa Matthews, and Durand Odom; Forensic Accountants Crystal Boodoo and Maria Boodoo; Paralegal Specialists Krishawn Graham, Tasha Harris, and Corrine Kleinman; Former Paralegal Specialists Shanna Hays and Nicole Wattelet; and Legal Assistant Angela Lawrence.