We know D.C. Get our free newsletter to stay in the know.
Council Chairman Kwame “Fully Loaded” Brown is in a world of hurt. The Office of Campaign Finance has just released its final audit of Brown’s 2008 campaign finance report, and the findings are not good for Brown, whose reputation has already been battered in the last year over personal debt problems and for having very expensive tastes in taxpayer-funded luxury SUVs.
The most explosive finding from the report: $240,000 of Brown’s campaign funds (about 30 percent of all the money spent by the campaign) went to a firm owned by his brother, Che Brown, and there aren’t adequate records to back up those expenses.
The audit details how the money flowed from Brown’s campaign through another company before winding up in Che Brown’s firm, called Partners in Learning. (On his website, Che says he’s a “renowned sales trainer, motivational speaker, and business coach.”)
Kwame’s campaign paid a company called Banner Consulting $380,000 in semi-regular installments to manage campaign field operations. The reports notes that $240,000 of that money went directly to Che’s company without being reported by Kwame’s campaign.
“Several expenditures were made to Partners in Learning in close proximity to the time frames if not the same day and the same amounts to Banner Consulting,” the report finds. “It was also noted that the payments and/or transfers made by the Committee to Re-Elect Kwame R. Brown to Banner Consulting were paid and/or transferred to Partners in Learning on the same dates or in close proximity.”
The report says Kwame’s committee didn’t provide records to back up that those payments were legitimate.
It should be noted that the Committee failed to provide the Audit staff with bank records and statements for Partners in Learning as requested by the Audit staff in the Interim Audit Report. The Committee provided a Profit and Loss Statement for Partners in Learning and copies of the invoices from Partners in Learning that were previously submitted to the Audit staff.
The Profit and Loss Statement provided by Partners in Learning reflects revenue totaling $241,663.42 received from Banner Consulting with a net income to Partners in Learning in the amount of $25,877.85.
The Profit and Loss Statement also reflects expenses of $169,164.00 for “day labor”; $1,052.98 for “fuel”; $2,696.61 for “office supplies”; and, $1,871.98 for “telephone and fax”. However, the Committee failed to provide adequate documentation to substantiate the aforementioned expenditures totaling $174,785.57.
The Audit staff submits that without documentation (bank records and statements of Partners in Learning) to substantiate and/or evidence the aforementioned expenditures totaling $174,785.57, it cannot attest that the financial records submitted, fairly represent the financial activity as indicated in the Profit and Loss Statement provided by Partners in Learning.
Based on the lack of documentation related to Kwame’s brother as well as the Brown campaign’s failure to report 210 contributions totaling $102,763.00 and 53 expenditures totaling $169,431.49, the OCF auditors are referring their findings to OCF’s lawyer “for whatever action deemed appropriate.” (The report also chided Brown’s campaign for issuing eight checks, totaling $31,590.79, made out to “cash,” five of which had insufficient documentation to account for where the cash wound up: “The Audit staff recommended that the Committee establish internal control procedures that would ensure that cash withdrawals of checks paid to cash are not made in amounts greater than $50.)
Che Brown tells LL he has no direct comment on OCF’s findings, but adds that “all our records are with the Office of Campaign Finance.”
Che says he is “really pleased” with the “tireless effort of the team” associated with Partners in Learning for his brother’s campaign. He declined to specify how many people are members of the Partners in Learning team.
In a statement, Kwame Brown says the money paid to his brother was all above board, without mentioning the audit’s findings that there’s no records to back that claim up.
It is important for everyone to understand that all payments from our Campaign, as reflected in the Audit Report, were remitted pursuant to properly documented invoices and, as it relates to independent contractors providing services, Statements of Work were required as an attachment to their Agreements. We ensured that all such services were performed in furtherance of the Campaign, including my own brother who worked tirelessly on the Campaign.
Here’s the OCF report:
[scribd id=52354940 key=key-1bx31br9cyqyjhps4y9k mode=list]