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It only took Mayor Vince Gray six years to go from running a non-profit for troubled teens to being the city’s top elected official. But after that rapid rise, it’s only taken him two months to cut short his own honeymoon and become a political punchline.
So what happened? How did a guy who looked like a pro while easily dispatching a much-better funded incumbent in September come to look like a lost little lamb by March?
At least part of the problem is that people with questionable backgrounds who want city jobs are clearly attracted to Gray—and the mayor doesn’t know how to push them away.
First it was Reuben Charles, an entrepreneur who quickly became Gray’s go-to-guy during the campaign but had left behind a string of sour business deals and unpaid debts in the Midwest. The rumor mill was pretty certain that Charles was going to be Gray’s chief of staff, until the then-mayor-elect was blindsided by more reports of Charles’ unpaid debt problems.
Next comes Sulaimon Brown, whose rapid transformation from annoying seventh-tier mayoral candidate to the Gray administration’s chief accuser has been nothing short of remarkable. (For the two of you reading this who don’t know Brown’s backstory, here is the CliffsNotes version: Brown runs for mayor on a platform advocating that Gray be mayor. Brown gets a $110,000-a-year job with the Gray administration. LL suggests Brown’s hiring is a bad idea, given his legal problems and other issues. Brown is fired the next day and has to be escorted out of his office by police. Brown goes on the attack, accuses the Gray camp of making illegal payments to his campaign and promising him a job.) Gray has repeatedly denied any wrongdoing in l’affaire Sulaimon, and has been helped by Brown’s increasingly erratic behavior. But by the same token, the crazier Brown acts, the more one has to wonder why the Gray administration ever hired him in the first place.
Joining Brown in the category of never-should-have-been-hired is Talib Karim, a Gray supporter who was the chief of staff at the same agency where Brown worked. Karim resigned last week after LL wrote about court records that indicated he used physical force against his wife.
And then there’s Howard Brooks, the current man of mystery who stands accused by Brown of being the Gray aide who slipped him envelopes of cash. Brown doesn’t have a shady background—public records show he’s lost a couple of business-related lawsuits, declared bankruptcy, and has a couple speeding tickets—but his behavior since being accused by Brown does not inspire confidence. First, Brooks denied to The Washington Post ever calling Brown. Then when he was confronted with phone records showing multiple calls between the two, Brooks told the Post he was lawyering up and wouldn’t answer any more questions. He’s since been ignoring reporters’ calls.
Reports this week on Brooks’ past business enterprises and their links to Gray also cast doubts on the mayor’s claim that he doesn’t know Brooks well.
Gray shouldn’t be held personally responsible for everyone who joins his team. He’s the mayor, not the head of human resources. But he needs to find someone who’s looking out for his political interests, and quickly.
“They’re leaving him hanging out there,” says Ward 3 Councilmember Mary Cheh, an avid Gray supporter who says the constant scandal drip coming from Gray’s office is “kind of depressing.”
Other Gray supporters, speaking on condition of anonymity, say Gray’s inner circle has let him down by being politically tone-deaf. “Ultimately, he’s put his trust in some of the wrong people,” says one supporter. (Some of the finger-pointing has centered on Lorraine Green, Gray’s campaign and transition chairwoman, who Brown has also accused of giving him cash. Green denies Brown’s claims.)
For proof, look no further than the hirings of the progeny of Gray’s backers. The children of Gray’s chief of staff and his communications director, as well as Brooks’ son and Green’s daughter, all landed new jobs with the Gray administration. Gray says the new hires have been qualified, but for a guy who ran on a platform of ending cronyism in city government, he should have known how bad those hires would look. Or he should at least have someone working for him to tell him how bad it looks.
“That may not have been the best decision,” says Ward 7 Councilmember Yvette Alexander, another strong Gray supporter.
So what can Gray do to get out of this hole? One thing that’s frustrating his supporters is the way Gray seems to have lost his message mojo. Rather than making news, he’s now only reacting to the steady stream of bad headlines coming his way. Gray’s tried to turn the page by announcing that Kaya Henderson will be permanent chancellor of the D.C. Public Schools, but it hasn’t been enough.
Perhaps more dramatic news is needed. Maybe he could buy a Smart Car?
* * *
It’s not as sexy as Sulaimon or the Lincoln Navigators, but there’s a corporate tax reform issue looming that just might highlight Gray’s problem of listening to the wrong people.
Chief Financial Officer Natwar Gandhi has been pressuring District lawmakers for a while to adopt a corporate income tax policy known as combined reporting. The law would require multistate corporations, like Comcast or Pepco, to pay taxes on profits they make in the District, rather than shifting money around to other states. If the District were to enact combined reporting, it would join 23 states (of the 45 with a corporate income tax) that have combined reporting—and raise an additional $23 million the next fiscal year. Which might come in handy, given the buckets of red ink D.C. budgets have been dipped in lately.
Opponents, who include the well-connected lobbyists of large corporations and the D.C. Chamber of Commerce, say combined reporting can be overly burdensome and unfair. Supporters of combined reporting say the law not only helps the District’s struggling finances, but also levels the playing field for smaller businesses that exist in the District alone and can’t take advantage of out-of-state loopholes.
Or, as the wordsmith Gandhi put it to LL in a statement: “Combined reporting can provide a far more accurate picture of a unitary enterprise’s true income within a taxing jurisdiction because it minimizes distortion from income and expense shifting all too common in separate entity jurisdictions like the District of Columbia.” (The CFO is clearly not the message maven Gray is looking for.)
To find a good example of why combined reporting is needed, supporters say, look no further than the District’s unreliable electric utility Pepco. Records indicate that there have been years when Pepco’s not had to pay state income taxes, despite being profitable. A Pepco spokesman says the company, which operates in D.C., Maryland, Delaware, and New Jersey, opposes combined reporting because it could lead to higher electric rates.
In 2009, the D.C. Council actually approved combined reporting, but it still needs to pass enabling legislation, which Gandhi has already drafted, that spells out exactly how the law will be implemented.
At a recent news conference to convey the good news that the District’s budget gap was only (“only”) going to be $322 million and not several hundred million worse, Gandhi passed out revenue projections that made clear the District would lose $100 million over the next four years if the council didn’t act on combined reporting.
Joining Gandhi in support of combined reporting is Ward 2 Councilmember Jack Evans, who heads the finance committee and is the council’s biggest budget hawk.
“I don’t see any reason why we shouldn’t do it,” says Evans. When asked to describe the pitch he gets from lobbyists opposed to combined reporting, Evans says they say “it’s not fair and all that other kind of crap.”
(Sure enough, when LL asks Chamber of Commerce President Barbara Lang about combined reporting, she says, “I just think it’s unfair.” She believes the legislation would allow the District to tax income that wasn’t made in D.C., which supporters of the legislation say is false.)
One might think that with the support of Gandhi, the guy most elected officials in the District see as the last word on all things financial, and Evans, who is opposed to pretty much every other type of tax increase, combined reporting would breeze into law. One might also think, after listening to Gray repeatedly talk about shared sacrifices, that the mayor would be jumping at a chance to make corporations pay their fair share.
But that’s not the case. Gray hasn’t given any indication whether he’ll include combined reporting and the revenue it will generate in the budget he’s supposed to release on April 1. “That’s a decision that’s yet to be made,” Gray said earlier this month at a news conference.
It could be that Gray is being his normal deliberative self. Evans said last Friday that Gray’s budget folks had told him “it’s right on the line.” (Opponents of combined reporting are convinced Gray will include it his budget, while supporters are convinced Gray won’t. This way he’s sure to please someone!)
Or it could be that Gray, as Evans took the rather unusual step of suggesting to LL, is trying to accommodate the business community that backed him. Multistate corporations that oppose combined reporting were generous donors to Gray’s campaign, transition, and inauguration funds. He appointed Lang to head his transition team’s economic development committee. And let’s not forget that there are dozens of multistate corporations represented by a class of well-connected lobbyists who seem to thrive no matter who is in power. (Take, for example, David Wilmot, a top-paid lobbyist who is on expensive retainers for Comcast, AT&T, and Wal-Mart.)
So will Gray cave to the pressure of the people who supported him? We’ll get our answer when his budget comes out. It’s worth noting that Gray didn’t waste any time pissing off the unions his detractors said he’d be beholden to.
Yet there’s also reason to believe Gray’s looking for a way to make his business backers happy. Asked at a news conference whether he supported combined reporting in theory, Gray wouldn’t answer: “I don’t want to get out ahead of myself.” That could be Gray being cautious, but LL’s got his suspicions.
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Photo by Darrow Montgomery