City Paper is not for tourists
Mayor Sharon Pratt Kelly‘s cabinet members soon may begin to feel like deer on the first day of hunting season. But in one way they’re even worse off than their four-legged friends: There’s no limit on how many cabinet members the D.C. Council can bag, as its assault on the mayor intensifies with the arrival of the ’94 election year. For some time now, the council has displayed its eagerness to step into the leadership void created by Kelly’s haphazard, inexplicable, and largely ineffective style of governing, and seize powers for the council that once belonged solely to the mayor.
Expect to see some trophies taken before the season ends. LL can just imagine walking into a councilmember’s office and finding, stuffed and mounted on the walls, the taxidermic heads of some of Kelly’s top officers. In the chambers of at-large Councilmember John Ray, we wouldn’t be surprised to spot the angular face of Ellen O’Connor, the city’s chief financial officer, next to the well-worn head of Walter Ridley, director of the troubled D.C. Department of Corrections. Over in the office of Council Chairman Dave Clarke would be hung the battered visage of Department of Finance and Revenue (DFR) Director Sharon Morrow. Gawd, what a gruesome vision.
Of course, the most coveted trophy is the head of Mayor Kelly, whom councilmembers consider almost beneath contempt for her lack of leadership and political integrity. And they may get that head. If they do, it will have to go on rotating loan because nearly every one of the 13 council offices would want a chance to display the relic on their walls.
Morrow was the first cabinet member caught in the council’s crosshairs, when, over a year ago, then-Council Chairman John Wilson called on Herroner to oust the DFR director. But Morrow has hung on despite personnel turmoil and ongoing problems in collecting taxes and assessing properties. Morrow’s survival may indicate that cabinet officials are going to be tougher to bring down than councilmembers realize.
Two weeks ago, Ray called for Ridley’s resignation in the wake of FBI-led arrests at the D.C. Jail and Lorton that netted 23 current and former correctional officers for selling drugs to prisoners. Under Ridley, the last of the department-head holdovers from the reign of Mayor-for-Life Marion S. Barry Jr., the inmates seem to have taken control of the institution, since some of the officers arrested had previously been imprisoned on felony convictions that should have made them ineligible for employment in the District’s correctional system. LL can see how this situation would never do. Once word got out that drugs are more readily available behind bars, users would be trying to break into the jails, and there would be no room for the city’s corps of stone-cold killers.
Ray called on the mayor to give Ridley the boot even before the corrections chief revealed at a Nov. 19 council hearing his department’s deplorable record in keeping inmates confined in halfway houses in D.C. Ridley admitted that in the last four years—during which he was in charge of corrections for the city—some 7,000 inmates have escaped from halfway houses. More than 900 remain at large, and the police haven’t bothered to search for about one-third of those. This year alone, more than 1,500 prisoners have fled halfway houses, and more than 500 of these are still roaming free. The Kelly administration should keep these statistics in mind the next time they try to convince a community that halfway houses make good neighbors.
This week, Ray is calling on Kelly to tell O’Connor to “take a walk” for O’Connor’s handling of the District’s $1.8 billion in municipal bond sales over the past three years. O’Connor and Kelly picked Lazard Freres as the city’s financial adviser for those bond sales. At the time, Lazard Freres had an undisclosed arrangement with Merrill Lynch & Co., in which Lazard Freres received a commission on business referred to Merrill Lynch. So which investment firm did Lazard Freres advise the D.C. government to choose as its lead underwriter on the bond sales? Was it a.) the D.C. Department of Corrections; b.) Blue Plains Sewage Treatment Plant; c.) Colombia’s Medellin cocaine cartel; or d.) Merrill Lynch? If you picked d.), congratulations. You have just passed the entrance exam to become a D.C. cop.
The deal between Lazard and Merrill Lynch became public only this past summer, when it was disclosed by the Boston Globe. Shortly afterward, O’Connor told Ray that city officials knew about the deal at the time it hired both firms. O’Connor certainly did not view this as the conflict of interest that Ray saw it to be. Unsatisfied by her explanation, Ray demanded to see the documents both firms had supplied to the city. O’Connor finally handed over those documents last week, just a few hours before Thanksgiving arrived. Along with the documents, O’Connor provided a lengthy report claiming that the expertise provided by Lazard Freres and Merrill Lynch saved the city $72 million in lower interest payments since 1991. Her report also claimed that the two firms did not share fees on the D.C. bond business.
Ray this week dismissed O’Connor’s report as “self-serving,” and called on D.C. Auditor Otis Troupe to investigate. He also sent Kelly a letter recommending that she have the city’s inspector general look into the matter. “It is clear to me that these people [Kelly and O’Connor] could be hit between the eyes with a conflict of interest and not recognize it,” said Ray, who has his sights set on the mayor’s office in ’94. “It’s one of the most obvious conflicts of interest in your life. This is a deal that never should have happened!”
If O’Connor did know about the fee-sharing arrangement but did not demand to see the agreement before hiring the two firms, then she should be fired, Ray said. “I think the mayor ought to ask Lazard Freres to take a walk,” he continued, “and I think the mayor ought to ask Miss O’Connor to take a walk.” Ray remains unconvinced that the arrangement didn’t cost city taxpayers, asO’Connor and Kelly contend. Ray argues that the city might have gotten a better deal if the bond firms had been selected through competitive bidding.
Left unexplored in all of this is the Boston connection. O’Connor came to the Kelly administration fresh from her experience as budget director and comptroller for then-Massachusetts Gov. Michael Dukakis. She fled that city just after the so-called Massachusetts Miracle had turned into theMassachusetts Mishap. Some Kelly critics now say that O’Connor has brought the same kind of economic malaise down on D.C. The other Massachusetts link involves Lazard Freres partner Mark Ferber, who, after Kelly’s election, became a leader of the team advising the District on its bond sales. Ferber has had business dealings with the Boston law firm of Flash Wiley, the mayor’s brother-in-law. O’Connor, through her spokesperson, Cheryl Crowell, said Wiley played no role in landing her the Kelly administration post, and, as far as O’Connor knew, did not receive any fees from the D.C. bond business.
In July 1991, Mayor Kelly picked the D.C. law firm of Patton, Boggs & Blow to handle some of the legal work on the bond sales, even though Patton, Boggs had no real expertise or experience in this area. One of the firm’s partners was Ron Brown, now the U.S. Secretary of Commerce, but at the time a business partner of James Kelly, whom the mayor married at the end of her first year in office.
“I smell a skunk here, and it stinks,” observed Ray.
In the meantime, LL has heard a rumor, not yet confirmed, that Ray has been measuring his office wall space to see where to hang O’Connor’s mounted head.
MORE CONFLICTS OF INTEREST
This week, the city’s liquor industry showed its appreciation for outgoing Alcoholic Beverage Control (ABC) Board member Mercy Drake by tossing a party in her honor at the River Club in Georgetown. Drake’s retirement bash was hosted by Steve O’Brien and Dimitri Mallios, the industry’s two biggest legal guns when it comes to obtaining licenses and winning contested license renewal cases before the ABC Board. Joining O’Brien and Mallios in organizing and footing the bill was former ABC Board Chair Marlene Johnson, who is trying to move into the league of her two co-hosts and build a lucrative legal practice representing clients before her former agency. The liquor industry’s fondness for Drake raised some eyebrows and confirmed some suspicions held by community activists, who grumble over the treatment they have received from the board while protesting the issuance of liquor licenses.
Even more eyebrows are being raised by the continued presence of D.C. Zoning Commission member Jerrily Kress on the board of the D.C. Building Industry Association (BIA). BIA is one of the main groups that lobbies the commission and other city agencies on behalf of developers and against requirements that developers build residential housing downtown. Kress’ membership on the BIA board was raised at her council confirmation hearing last summer by neighborhood activists opposing her nomination. Now Kress, an architect, is seeking another term on the BIA board, whose members include executives of the area’s major development firms and commercial property owners. BIA also counts among its officers and directors members of the Wilkes Artis Hedrick & Lane law firm, the city’s premier lobbying firm on zoning and land use issues. Wilkes Artis lobbied hard earlier this year to secure Kress’ appointment to the Zoning Commission.
“Here is another example of a Kelly appointee being blind to appearances of conflicts of interest,” said downtown housing activist Terry Lynch. Lynch noted that one of Kress’ first actions on the commission was to vote to strip the residential requirement from the office-retail complex planned for 1201 K St. NW. He had lobbied hard—and in vain—to preserve the residential requirement in the development project. “When she voted against 1201 K Street, was she acting as a Building Industry Association member, or as a member of the Zoning Commission? Or both?”
LL tried to pose Lynch’s question to Kress, but she failed to return phone calls.
Shadow U.S. Senator/D.C. statehood lobbyist Jesse Jackson needs to brush up on his local history. In the wake of the historic House vote on D.C. statehood Nov. 21, Jackson invoked the memory of the late D.C. Council Chairman Wilson and thanked him for his contribution to the statehood movement. According to Jackson, Wilson gets credit for pushing through the legislation that created the offices of two shadow U.S. senators and one shadow representative, a bill that had been stalled throughout the ’80s. However, Wilson was not chair of the council when the bill passed in 1990, as Jackson claims, and was skeptical about the prospects and feasibility for statehood. Dave Clarke chaired the D.C. Council when the bill finally passed. But Jackson’s revision of recent D.C. history is in keeping with his posture that only African-Americans will be recognized as statehood leaders and heroes.
Meanwhile, Mayor Kelly has been doing some revisions of her own. Kelly claimed, in the wake of statehood’s rejection by all but one of the House members from the Maryland and Virginia suburbs, that she was not pushing a commuter tax as part of statehood. But her administration’s need and desire for the commuter tax was stated clearly in a letter Kelly sent to members of Congress two days prior to the vote, much to the chagrin of D.C. Congressional Delegate Eleanor Holmes Norton, who led the House floor fight for the statehood bill.