An independent investigation commissioned by the Metro board of directors has found that Ward 1Councilmember Jim Graham violated Metro’s code of conduct when he served on the board.

The investigation, done by private law firm Cadwalader, Wickersham & Taft, says Graham, former chairman of the Metro board, broke Metro rules in two ways. One: Graham created “at least the appearance” of a conflict of interest when he tried to leverage the city’s lottery contract into getting a developer he didn’t like off a Metro development project. Two: Graham “acted contrary to his duty to appear impartial” when he acted favorably toward one of his preferred developers.

Graham pledged to support local businessman Warren Williams Jr.’s‘ bid to control the city’s lottery in exchange for Williams’ company, Banneker Ventures, dropping out of a Florida Avenue Metro development, the investigation found. Banneker Ventures had strong ties to former Mayor Adrian Fenty. Graham had long clashed with Williams over Club U, the Williams-run go-go club in the basement of the Reeves Center that Graham got closed down after someone was stabbed there.

The report found that Graham improperly pushed for developer LaKritz Adler to be a part of the Florida Avenue deal while he was opposing Banneker.

“Councilmember Graham’s actions resulted in a breach of his duty to place the public interest foremost in any dealings involving Metro,” the report found.

Much of the details in the report have already been made public via the Washington Times and the Washington Post editorial page. But the Metro investigation did get to interview Graham while under oath during a deposition. Graham could not recall doing the things the investigation concluded he did, but he didn’t deny doing them, either.

When LL spoke with Graham earlier today, he said he was unaware that the report was going to be made public or that the board was going to discuss it today. He said he would not have a comment until he’d seen a copy of the report. In an earlier response to a Washington Post editorial, Graham denied any contract meddling. “Despite what the Post would like readers to believe, the problem with Banneker was not Jim Graham. The problem with Banneker was Banneker,” Graham wrote. (LL will update when/if Graham has more to say.)

The city’s inspector general, who investigated the council’s actions regarding the lottery contract, found that Graham didn’t break any rules but may have created the “appearance that he lost complete independence or impartiality.”

It’s unclear what the outcome of the Metro investigation will be for Graham, as he’s no longer a member of the board. There are no referrals recommended to any law enforcement agency, as there are no conclusions that Graham violated any laws. From the report:

Although the scope and duration of our investigation was limited and we lacked certain tools commonly used by law enforcement to trace the flow of money, we are not aware of any facts to suggest that the conduct of any Metro Board member or Metro employee was motivated by a pecuniary interest. We are not aware of evidence that any payments were offered to, or accepted by, any Metro Board member or Metro employee. Similarly, we are not aware of evidence that any Metro Board member or Metro employee had a financial interest in the Florida Avenue Project or in any of the developers involved in the joint development process.

But the Metro investigation will likely be good for Eric Payne, the former procurement officer in the city’s CFO’s office. Payne is suing the city, saying he was fired because of improper political pressure he received after awarding Williams the lottery contract. Payne secretly recorded a top aide to CFO Nat Gandhi telling him: “Jim Graham is on a personal vendetta here.”

Today, Payne said: “It’s unfortunate that it took an independent Metro investigation to bring wrongdoing to the attention of the public” before noting that that several other city watchdog agencies could have come to the same conclusions much earlier.

Update: Graham’s response: “I am pleased that this report joins two other prior reports and finds that there was no suggestion on my part of any criminal act or unlawful financial interest or even financial conflict of interest.”

The full report:

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Photo by Darrow Montgomery