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Diane Simmons Williams has taken a lot of flak from old-timers since becoming D.C.’s first lady. First, the District’s crusty political class whined that she didn’t embrace the city, much less her ceremonial role in it. Then, they complained that she was a cheapskate, refusing to spend money on the re-election campaign of her husband, Mayor Anthony A. Williams.

Now it appears that this transient dabbler had a better command of local politics than all the inveterate advisers swirling around her husband. Unlike everyone else in the mayor’s entourage, Simmons Williams long held serious suspicions about Gwendolyn Hemphill, last year’s mayoral re-election campaign co-chair and special assistant to the Washington Teachers’ Union president.

“She’s after the money,” D.C.’s first lady warned Williams confidants more than a year ago, sources close to the campaign tell LL.

Law-enforcement authorities might just agree with her. According to a forensic report prepared for the local union’s parent group, the American Federation of Teachers (AFT), Hemphill allegedly was a participant in a criminal conspiracy that defrauded D.C. teachers out of an estimated $5 million.

An initial probe by the AFT prompted an FBI investigation into the union’s missing funds, including the seizure of clothing, electronic equipment, and artwork from Hemphill’s home.

Before the FBI arrived on the scene, Hemphill was known as a Williams stalwart, a woman who could be counted on to pitch in on every effort to further the mayor’s prospects. She signed on as a director of a Williams-related nonprofit and showed up at many booster events. “We knew her for a long time,” says Douglas J. Patton, who served as counsel to the 1998 and 2002 Williams campaigns and now serves as a director of that same nonprofit, Washington First Corp.

Over the past six months, though, Hemphill has emerged as the Lex Luthor of local scandals, from the mayor’s petition debacle to the teachers’-union fiasco. Last Friday afternoon, for example, Ward 8 Dems President Philip Pannell called in to WAMU’s D.C. Politics Hour to report that he had received dubious cash assistance from Hemphill for his own re-election efforts.

How long before someone connects Hemphill to Chandra Levy?

It’s easy to pile on Hemphill these days, with the FBI allegations and damning audits swirling around her. But Williams campaign insiders say Simmons Williams had a sinking feeling about her husband’s campaign co-chair long before talk of FBI affidavits and check-cashing schemes and a $12,999 flat-screen TV, allegedly purchased by Hemphill with union funds.

Simmons Williams began compiling her own mental file on Hemphill and the union during the 2000 race for president of the newly configured D.C. Board of Education. Although Hemphill and the union had supported Williams in the 1998 mayoral election, they wouldn’t endorse his favored candidate for school-board president, Peggy Cooper Cafritz.

Instead, they pledged their support and considerable resources to the Rev. Robert Childs.

Simmons Williams served as treasurer for Cafritz, who is a personal friend.

The teachers’ union pledged to give Childs all kinds of help. Indeed, many of the names involved with the current union scandal appear on the pages of Childs’ campaign-finance reports: President Barbara A. Bullock, attorney Curtis J. Lewis, Treasurer James O. Baxter II, and Hemphill all contributed $500 to the Childs campaign.

Something else didn’t appear in the reports: campaign expenditures. D.C. campaign-finance watchdog Marie Drissel filed several complaints against the Committee to Elect Childs for failure to report campaign expenditures. Drissel complained that even though she spotted posters, T-shirts, and other Childs campaign paraphernalia all around town, she did not see those items listed as campaign expenditures.

“Recently, at forums a truck with VA rental tags has been seen with campaign posters attached to it,” wrote Drissel in her complaint. “There is no charge for this rental truck.”

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The attorney representing Childs in the complaint was Lewis. The truck’s driver, according to Drissel’s complaint, was Lewis’ brother, James Baxter.

The Office of Campaign Finance eventually dismissed Drissel’s complaints when the Childs campaign reported expenditures in later reports. As noted in the office’s official orders, Childs had written personal checks to pay for many of those campaign expenditures.

In the next election cycle, Simmons Williams and Hemphill were on the same team—the Williams re-election campaign.

Back in June 2000, the mayoral re-election effort officially kicked off with a lavish fundraiser at the home of Democratic moneyshakers Ron and Beth Dozoretz. The event, whose guests of honor included President Bill Clinton and former Senate Majority Leader Bob Dole, raised more than $500,000 for the upcoming mayoral race. By the beginning of 2002, Williams had raised a whopping $1.2 million.

The strategy was to raise enough money to discourage mayoral wannabes such as Ward 2 Councilmember Jack Evans and Ward 7 Councilmember Kevin P. Chavous. The unintended consequence was that every Democratic apparatchik, it seemed, had an idea about how to spend the campaign cash to personal benefit.

According to campaign sources, D.C. Democratic State Committee Chair Norman C. Neverson approached the Williams campaign committee about getting approximately $150,000 for a get-out-the-vote effort. It was an expensive request for a campaign against no brand-name opponent.

Campaign Co-Chair Hemphill was familiar with Neverson’s qualifications, because she had worked with him as executive director of the state committee and was a longtime friend and neighbor.

Hemphill advocated on Neverson’s behalf, to no avail: The request was shot down, even after Neverson reduced his price.

“People saw the campaign war chest as a gravy train,” explains Simmons Williams, who played a critical behind-the-scenes role in vetoing questionable expenditures.

The petition screw-up cinched Simmons Williams’ wariness of Hemphill. Under Hemphill’s watch, a ragtag group of staffers compiled 10,000 nominating-petition signatures, about 80 percent of which were invalid. Simmons Williams took a special interest in Hemphill’s testimony before the city’s Board of Elections and Ethics, which investigated the petition scandal.

Hemphill denied having any role in the day-to-day operations of the campaign. When asked about the fiasco, Hemphill told the board, “I cannot speculate on why certain things were done.”

Hemphill’s hands-off alibi contradicted the testimony of Williams campaign adviser Charles N. Duncan—as well as Simmons Williams’ own understanding of campaign hierarchy.

Simmons Williams watched as Hemphill rolled up her sleeves each day for the campaign. Hemphill handled contracts and directed payment of campaign expenditures. “At first it was my understanding that she was taking a leave of absence [from the union],” she says. “The campaign wasn’t going to pay her.”

Around the same time Williams was waging his battle with the Board of Elections and Ethics to remain on the ballot, the AFT had opened its internal investigation of the local union. According to forensic investigators, Hemphill wrote checks on the union account that a union employee then cashed, returning most of the money to Hemphill.

Simmons Williams saw parallels in the way the mayor’s pre-petition-scandal campaign handled money.

“I felt that my suspicions were confirmed after I read in the City Paper that Scott Bishop Jr. said that he took large campaign expenditure checks to the bank to cash,” said

Simmons Williams.

POLITICAL POTPOURRI

* The Dozoretz fundraiser featured stars of politics, sports, and the Internet economy. It also featured two future stars of lawsuits: Hemphill and C. Gregory Earls.

Until last November, Earls was chair and chief executive officer of U.S. Technologies Inc. He served as chair of the June 2000 fundraiser, along with Fannie Mae Chair Franklin Raines, former vice presidential candidate Jack Kemp, and America Online founder Jim Kimsey.

U.S. Technologies made headlines after former Securities and Exchange Commission chair Harvey L. Pitt selected former FBI director William H. Webster as chair of a new national accounting-oversight board. Pitt failed to disclose that Webster had been involved in U.S. Technologies’ own accounting missteps, as a member of the troubled company’s audit committee. Webster resigned from the national board, and Pitt later stepped down as well.

Last month, Earls was charged with 10 counts of securities, wire, and mail fraud. Federal prosecutors allege that Earls diverted approximately $13.8 million in investor money for personal use. CP

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