WASHINGTON (CBSDC/AP) District of Columbia Mayor Vincent Gray was elected in 2010 with the aid of $650,000 in illicit funds from a district businessman, a Gray campaign consultant admitted in federal court Tuesday.

Eugenia “Jeanne” Clarke Harris’s guilty plea confirms longstanding rumors that off-the-books payments were being used to pay for consultants, supplies and other expenses supporting Gray in what prosecutors described as a “shadow campaign.”

Harris’s guilty plea casts a longer shadow on an election that was already tainted by revelations that Gray campaign operatives made illicit payments to a minor mayoral candidate, U.S. Attorney Ronald Machen said. Two Gray campaign operatives have already pleaded guilty to their roles in that scheme.

“In 2010, the mayoral campaign was compromised by backroom deals, secret payments and a flood of unreported cash,” Machen said. “The people of this city deserve better. They deserve the truth.”

Gray defeated incumbent Adrian Fenty by 10 percentage points in the Democratic primary and cruised to victory in the general election. He ran on a pledge to restore integrity to the office, but he has been engulfed in scandal for nearly his entire term. The mayor has not been accused of any criminal activity and had no immediate comment about Harris’ plea.

None of the shadow campaign funds were reported to the district’s Office of Campaign Finance, said Harris, who pleaded guilty to a federal conspiracy charge, a local conspiracy charge and a federal charge of filing a fraudulent tax return.

According to Harris’ plea agreement, a co-conspirator funneled $653,000 in illicit funds through her public-relations firm that she then spent on campaign materials, consultants, supplies and other expenses. Harris identified her co-conspirator as an accountant who also has government contracts.

She is a close associate of Jeffrey Thompson, a businessman and prominent government contractor. Thompson was not named in court documents and has not been charged with a crime, but his home and offices were searched the same day as Harris’s were.

Harris later sought to cover up the way the funds were spent by amending her company’s tax returns to claim a nonexistent business relationship between her firm and her conspirator’s company, court documents show. Before amending the returns, she had improperly deducted the campaign expenditures from her company’s returns to avoid having to pay taxes on the money, the documents show.

(TM and Copyright 2012 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2012 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)


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