Updated: 9:00 p.m. March 10, 2014
WASHINGTON (CBSDC/AP) — District of Columbia Mayor Vincent Gray knew about an off-the-books “shadow campaign” to support his 2010 bid for the office and personally requested the funds from an influential district businessman, federal prosecutors said Monday.

Gray, who’s seeking a second term and faces seven challengers in the district’s April 1 Democratic primary, dismissed the allegations as “absolute lies” and said he thought all the fundraising for his campaign was legitimate.

The explosive allegations were revealed in court documents detailing the activities of Jeffrey Thompson, WNEW’s Kevin Rincon was there.

Thompson, the multimillionaire former owner of a well-connected accounting firm pleaded guilty Monday to two conspiracy charges.

According to the documents, Gray met Thompson for dinner at the apartment of another alleged conspirator in August 2010 and presented Thompson with a one-page budget of $425,000 needed for get-out-the-vote efforts. Thompson agreed to pay that amount by funneling it through another company, the documents said.

During an earlier meeting with Thompson, he told the mayor that he would find his campaign but that the contributions would not come from him or anyone associated with him, the document said. Thompson told Gray to say the money came from “Uncle Earl,” and after the meeting to discuss the shadow campaign, Gray thanked Thompson and referred to him as “uncle,” the document said.

Thompson’s plea to conspiring to violate federal and district campaign finance laws comes as Gray seeks re-election against seven challengers in the Democratic primary, which is set for April 1. Gray has not been charged with a crime and has denied any wrongdoing in the 2010 campaign.

Gray has not been charged with a crime and has denied any wrongdoing in the 2010 campaign.

U.S. Attorney Ronald Machen declined to say whether the mayor would be charged. The investigation is ongoing.

“What you learned about today was really only the tip of the iceberg,” he said.

Gray also told WNEW D.C. Bureau Chief Matt DelSignore that Thompson’s allegations are “lies.”

Gray said he knew Thompson raised money for his campaign — as many people did — but didn’t know of any illegal activity, as Thompson claimed in federal documents. Gray did confirm that Thompson asked to be called “Uncle Earl” to avoid retribution from the mayor at the time, Adrian Fenty.

Thompson, the multimillionaire former owner of a well-connected accounting firm, pleaded guilty Monday to conspiring to violate federal and local campaign finance laws by funding off-the-books campaign activity for candidates including Gray and presidential hopeful Hillary Rodham Clinton.

According to the charging document, Thompson funded illicit campaign activity for Clinton, Gray and seven other candidates for local office in the district. All told, the efforts, described previously by prosecutors as “shadow campaigns,” were valued at more than $2 million.

Read: Charging Documents Against Jeffrey Thompson

Prosecutors also said Thompson exceeded contribution limits by using straw donors and funneling money from his corporation through intermediaries. Thompson contributed more than $500,000 to local candidates and more than $250,000 to federal candidates and political-action committees over a six-year period, according to the 10-page document.

Thompson, 58, had long been suspected of giving money to Gray’s 2010 campaign to fund get-out-the vote and other efforts, and the document put the value of the shadow campaign at $668,000. He was also charged with pouring $608,750 into Clinton’s 2008 presidential bid. The efforts to help Clinton were detailed in a previous case against a Thompson associate.

The charges against Thompson come three weeks before the district’s Democratic mayoral primary, in which Gray is seeking re-election against seven challengers, some of whom have pointed to the mayor’s association with Thompson as a sign that he is unfit for office.

Gray has denied all wrongdoing but has not answered specific questions about his knowledge of Thompson’s activities. Chuck Thies, Gray’s campaign manager, said in a statement Monday that the document did not implicate Gray.

“No one has suggested that Hillary Clinton knew of Thompson’s illegal activities. Mayor Gray has not been afforded the same presumption of innocence,” Thies said. “We urge the media to be cautions when reporting the facts of this case.”

Gray spoke with DelSignore on Sunday, and reflected on the investigation into the 2010 campaign.

In addition to Gray, Thompson admitted funding a $608,000 shadow campaign for Hillary Rodham Clinton’s 2008 presidential bid and other campaigns for seven local district office candidates, prosecutors said in the documents. Clinton was not aware of the campaign, they said.

The total value of Thompson’s illicit contributions was $3.3 million, prosecutors said.

“Today’s guilty plea pulls back the curtain on years of widespread corruption,” Machen said. “With Mr. Thompson’s cooperation, we have the opportunity to hold many wrongdoers accountable and to usher in a new era of honesty, integrity, and transparency in D.C. politics.”

Thompson’s expenditures on Gray’s campaign totaled $668,000, and they were never reported to the city’s campaign-finance office, prosecutors said. The money went toward consultants, supplies and a massive get-out-the-vote operation centered east of the Anacostia River, where Gray defeated then-Mayor Adrian Fenty by huge margins.

The most recent race Thompson sought to influence, the documents allege, was that of Vincent Orange, who ran for and won an at-large council seat in 2011, and is now one of the candidates competing with Gray for the mayorship. Orange has acknowledged handing over to federal investigators documents related to the 2011 campaign.
Thompson also ran a $278,000 shadow effort for a mayoral candidate in 2006, the document shows. Adrian Fenty defeated Linda Cropp in that year’s mayoral primary, and Cropp received contributions that year from Thompson and his associates.

Federal authorities searched Thompson’s home and offices two years ago. Since then, U.S. Attorney Ronald Machen has built a case against Thompson by targeting his associates, five of whom have pleaded guilty to felonies.

Two close friends of Gray who worked on his 2010 campaign were among those who pleaded guilty. Two others pleaded guilty to making straw contributions to political candidates on his behalf, and another acknowledged using illicit funds to help Clinton’s presidential bid in Texas and other primary states. The cases outlined Thompson’s extensive financial backing of his favored candidates for federal, state and local office.

Thompson would tap into a vast network of donors, including employees, business associates, friends and relatives, many of whom would make large donations to his chosen candidates on the same day, campaign finance records show. After the allegations surfaced, several candidates donated the amount they received from Thompson to charity.

Thompson, a Jamaican immigrant, founded an African-American-owned accounting firm that received millions of dollars in local and federal government contracts. He was also the sole owner of D.C. Chartered Health Plan, a managed-care provider for district residents that had the single largest contract in city government, worth more than $300 million annually. The managed-care firm went bankrupt amid the investigation, and Thompson left the accounting firm.

Federal prosecutors were looking at possible links between Thompson’s support for Gray and a settlement that his health care company received after Gray took office. Administration officials strongly denied any wrongdoing related to the settlement, which was approved by the D.C. Council.

(TM and Copyright 2014 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2014 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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