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Last summer, D.C. Council Chairman Vincent C. Gray was faced with a crisis.

For one thing, he and city legislators were faced with a last-minute budget crunch to the tune of $660 million. They were given two weeks to find a solution. Meanwhile, the antics of Ward 8 Councilmember Marion Barry had exposed the sordid practice of earmarking, whereby councilmembers directed taxpayer funds to favorite nonprofits—-in Barry’s case, nonprofits that he had created and controlled.

Gray came up with a tidy way to address both problems: End all earmarks, cold turkey.

“I don’t want to pick and choose because, inevitably, we will be accused of some bias in the process,” Gray told the Washington Post at the time. “People are using them as a lifeline.” Organizations from across the District showed up at city hall, calling on the council to preserve their lifelines in a marathon hearing, but Gray held his ground—-no earmarks survived in the final budget.

Or did they?

The earmark ban, it turns out, was not absolute. At least one councilmember found a way to get money to key nonprofits in his ward through the fiscal 2010 budget. That would be Ward 5’s Harry Thomas Jr.

The key legislative language can be found in the budget of the Children and Youth Investment Trust Corp., a quasi-independent nonprofit charged with making grants to qualified service providers, then overseeing those grants. This is what it says: “The budget provides $1,320,000 of designated grants, which includes $1,000,000 for competitive grants to support community-based targeted gang street intervention and outreach and $320,000 for…Ward 5 anti-crime youth violence initiative.”

They key word is “competitive.” A Ward 6 initiative, for instance, was competitively bid, with $280,000 grant going to the well-regarded Sasha Bruce Youthwork program. Same goes for an even larger chunk of money granted pursuant to the “Blueprint for Action to Counter D.C. Gang and Youth Violence.”

The Ward 5 money was doled out through a different method.

At a performance oversight hearing last week, Ward 6 Councilmember Tommy Wells asked Interim CYITC CEO Ellen London about the Ward 5 money and whether it, like the Ward 6 money, had been subject to competition.

Said London: “They were not competitively bid. We met with the Ward 5 councilmember and talked about what he felt would be the best way to serve the community. We talked about a number of organizations that he suggested we look at that he knows have a track record of good services.”

Allow LL to translate: Thomas had a key role in choosing which groups got city money. He earmarked funds.

Thomas protests that characterization: “I have no earmarks,” says the councilmember. “We made recommendations for groups we know that have done these types of services, and they have to apply like everybody else to that process.”

The process for CYTIC grantees is not without rigor: Nonprofits have to be federally registered nonprofit organizations, preferably with a recent financial audit, must be in good standing with the District government, and must submit a work plan and budget narrative to be considered for funding.

Who are these groups and what do they do? According to a list provided by the CYITC, 21 different groups have been identified to receive funds; checks have already been cut to nine of them.

Some of the groups are fairly well-established, and several of them, in fact, have been funded in the past by the CYITC. And many of the groups tapped for the anti-gang money have a sporting focus—-keeping with Thomas’ well-known jockish tendencies.

The Woodridge Warriors and Washington Chiefs sports teams each got $20,000. And a group called the Falconsedge Male Task Force has received $40,000 in city funds. David Jones, who heads the organization, said the funds went toward the D.C. Falcons, a football team for older youth—-kids who had either graduated from high school or had dropped out.

“It gives them something to do,” he says. “I didn’t realize how much influence we had over their lives. They’ve still got a mentor.”

The money, Jones says, went to fund jerseys and equipment for his players, and well as bus rental fees for games, which can be as far away as Baltimore and Southern Maryland. The team practices in Ward 5, at McKinley Technology High School, though Jones personally doesn’t live in the ward. Jones says he’s recruited as many as 70 players for the program, with a core group of 30 or so participating “on a consistent basis.” Jones estimated about 60 percent are from Ward 5.

Jones says he heard about the funding opportunity through the CYTIC. “I pay attention to the council hearings. I did see that the councilmember was able to get something from the mayor for the ward, but I didn’t know [any details].”

Thomas, he says, is “a big supporter of sports in the community….If you have any problems with anything he can possibly help you with, he’ll reach out for you. He’ll do everything he can.” In appreciation, Jones has posted Thomas’ logo on his Web site, with his slogan: “Building Bridges, Finding Solutions, People First”

Of the nine groups funded thus far, by far the largest chuck of money, $125,000, went to the Friends of Carter Barron Foundation, which has long run arts programs for at-risk youth from across the city.

The CYITC grant, says FOCB President Gloria Hightower, went toward a youth holiday musical, held in December at Howard University’s Cramton Auditorium. The event featured 25 kids enrolled in the FOCB’s year-round arts program, plus about 15 “interns” working on the production. Hightower estimates “at least 20, 30 percent were from Ward 5.” (Thomas disagrees, saying, “I would think it was 50 percent of those kids.” He added that Ward 5 seniors and parents attended the show free of charge.)

The six-figure check, Hightower says, went to cover a variety of expenses connected with the show—-the venue rental fee, union musicians, professional sound and lights, training staff wages, youth stipends, and an honorarium for guest artist Yolanda Adams, a Grammy-winning gospel singer.

“You have to pay people to get quality work,” says Hightower.

Like Jones, Hightower said she learned about the funding availability through CYITC, not through Thomas—-though Hightower, too, vouched for Thomas’ commitment to the community and to her program.

In defending his role in directing the funding, Thomas emphasizes that he made no final decisions; he instead tried to direct funds to groups that he knew to be worthy of investment. “Why as Ward 5 councilmember, when I have the highest amount of murders, would I not make a recommendation for any gang program? Why would I not make a recommendation when I’m on the street every day?” he says, adding he credits the nonprofits with reducing crime in his ward.

But LL’s earmarking concerns alight on the sacredness of the competitive process. Thomas may know well worthy groups doing work in the ward; then again, there may be worthier groups that he might not know about or, for one reason or another, he might not support. That’s why issuing a public request for bids and subjecting it to a rigorous independent review is the best way to spend city money.

Thomas says his role was little more that sending a letter of recommendation on behalf of certain groups. “I sent the money to the CYITC,” he says. “I was grateful that they would listen.”

Listen they did.

In an interview, London said that the CYTIC did not open the Ward 5 money to bids, as it did for most other pools of city funds. And Thomas was influential in the funding process: All of the groups that Thomas suggested, she says, are under consideration for funding; she emphasized that, by and large, the groups he recommended are worthy recipients of the funds. “We had not or have not been asked to do something that we’re not comfortable with,” she says.

LL was unable to locate D.C. incorporation documents or federal tax records for four grant designees, including the Ivey 23 Terps, a youth basketball team, and a group listed as All-Star Homework Assistance. None of those four have been given money yet; London said last week that CYITC continues to work with the groups to complete their paperwork.

Gray—-who has led an earmark crackdown, vowing again to excise earmarks from the 2011 city budget—-doesn’t share LL’s opinion that Thomas’s designation deserves the E-word. Thomas, says Gray spokesperson Doxie McCoy, “doesn’t have the power to direct this money, it is the Children’s Trust.”

“Councilmembers know their wards, so it is appropriate that they make suggestions,” she says, “but they don’t have the power to direct the decisions of the [CYITC].”