Po­lit­i­cal con­trib­u­tor skirts lim­its ofd.c. law

Contractor’s di­vi­sions mul­ti­ply do­na­tions

The Washington Times Daily - - Front Page - BY JIM MCELHATTON

Busi­nesses owned for years by prom­i­nent D.C. contractor Jef­frey Thompson en­gaged in a pat­tern of po­lit­i­cal giv­ing that ap­pears to run afoul of city cam­paign fi­nance law, com­bin­ing to give twice and some­times three times the max­i­mum do­na­tion to city politi­cians in a sin­gle day, records show.

The con­tri­bu­tions from Mr. Thompson’s D.C. Health­care Sys­tems and closely tied busi­nesses — D.C. Char­tered Health Plan, Char­tered Fam­ily Health Cen­ter and Rapid­trans — en­riched the cam­paigns of city law­mak­ers at a time when Mr. Thompson’s com­pany was win­ning hun­dreds of mil­lions of dol­lars in D.C. gov­ern­ment con­tracts.

On the day af­ter Christ­mas 2006, for in­stance, D.C. Coun­cil mem­ber Phil Men­del­son’s cam­paign re­ceived three $ 1,000 checks — each the max­i­mum al­lowed to an at-large can­di­date — from D.C. Health­care Sys­tems, Rapid­trans and Char­tered Fam­ily Health Cen­ter.

Un­der D.C. cam­paign fi­nance law, a com­pany

and its sub­sidiaries are sup­posed to “share a sin­gle con­tri­bu­tion limit,” mean­ing that a par­ent com­pany and its busi­nesses com­bined could give no more than $1,000 in an at-large race such as the one Mr. Men­del­son, at­large Demo­crat, won in 2006.

Although giv­ing the max­i­mum do­na­tion to Mr. Men­del­son, Rapid­trans and Char­tered Fam­ily Health Cen­ter were listed as be­ing owned by the same hold­ing com­pany — Mr. Thompson’s D.C. Health­care Sys­tems, ac­cord­ing to a 2007 re­port by city in­sur­ance reg­u­la­tors.

Mr. Men­del­son’s cam­paign wasn’t the only one to ben­e­fit.

Records show D.C. Health­care Sys­tems and one or more of the af­fil­i­ated com­pa­nies gave max­i­mum do­na­tions to the same can­di­dates on the same day in more than a dozen lo­cal po­lit­i­cal cam­paigns.

The pat­tern of same-day max­i­mum checks from en­ti­ties joined in a com­mon cor­po­rate struc­ture trou­bles cam­paign-fi­nance an­a­lyst Mered­ith Mcgehee, pol­icy di­rec­tor for the non­par­ti­san Cam­paign Le­gal Cen­ter.

“Based on this in­for­ma­tion, it ap­pears that the con­tri­bu­tions were in ex­cess of the max­i­mum al­low­able amount,” she said. “The whole rea­son for con­tri­bu­tions lim­its is be­cause of cor­rup­tion or the ap­pear­ance of cor­rup­tion. There’s no great mys­tery that cam­paign con­tri­bu­tions buy ac­cess and in­flu­ence.”

Mr. Men­del­son said he wasn’t aware of the ties among Char­tered, Rapid­trans and D.C. Health­care Sys­tems. He said do­na­tions were not flagged by cam­paign fi­nance reg­u­la­tors, ei­ther. He also said he turned to Mr. Thompson for fundrais­ing help af­ter his 2006 elec­tion vic­tory over a well-fi­nanced chal­lenger that left his cam­paign in debt.

Mr. Men­del­son said he trusts donors to be in­formed about the law and cam­paign fi­nance reg­u­la­tors to alert him if some­thing is amiss.

“I thought that they were dif­fer­ent com­pa­nies. It’s hard for a can­di­date to know the fi­nan­cial re­la­tion­ships be­tween com­pa­nies,” he said, adding that donors typ­i­cally know the law and that “if they get caught, they’re the ones who are break­ing the law.”

Mul­ti­ple calls left for Mr. Thompson at his ac­count­ing of­fice, Thompson Cobb Bazilio & As­so­ciates Inc., were not re­turned last week. Mr. Thompson’s po­lit­i­cal giv­ing has come un­der sharp scru­tiny since a fed­eral raid on his home and of­fices this month.

Cor­po­rate ties

On Aug. 10, 2006, D.C. Health­care Sys­tems, Char­tered Fam­ily Health Cen­ter and Rapid­trans each gave $1,500, the max­i­mum do­na­tion al­lowed, to fu­ture Mayor Vin­cent C. Gray’s cam­paign for D.C. Coun­cil chair­man. Gray spokes­woman Doxie Mccoy de­clined to dis­cuss any spe­cific do­na­tions, but said Mr. Gray’s cam­paigns have been run with the “ut­most in­tegrity.”

The D.C. Of­fice of Cam­paign Fi­nance de­clined to dis­cuss whether reg­u­la­tors had flagged the pat­tern of con­tri­bu­tions from D.C. Health­care Sys­tems, Char­tered Health Plan and af­fil­i­ated com­pa­nies. Wes­ley Wil­liams, a spokesman for the of­fice, ini­tially said The Times’ re­quest for in­for­ma­tion would be treated as a Free­dom of In­for­ma­tion Act re­quest.

He later emailed a state­ment to The Times, say­ing that “any ac­tive prin­ci­pal cam­paign com­mit­tee of a can­di­date is sub­ject to an on­go­ing re­view process by this of­fice.”

Though the com­pa­nies share dif­fer­ent ad­dresses in some cases, the ties among the busi­nesses were hardly a se­cret. Years’ worth of reg­u­la­tory fil­ings laid bare the ex­tent of the cor­po­rate ties.

Char­tered Health Plan “is a pri­vate-sec­tor mi­nor­ity-owned HMO, with an af­fil­i­ated health care cen­ter, Char­tered Fam­ily Health Cen­ter, PC, and a van trans­porta­tion com­pany — Rapid­trans, as of De­cem­ber 31, 2007,” the D.C. Depart­ment of In­sur­ance, Se­cu­ri­ties and Bank­ing stated in a re­port.

“All com­pa­nies are owned by the hold­ing com­pany — D.C. Health­care Sys­tems, which is 100 per­cent owned by Jef­frey E. Thompson, chair­man of D.C. Char­tered Health Plan.”

What’s more, an­nual re­ports from 2005 to 2010 list D.C. Char­tered Health Plan as a wholly owned sub­sidiary of D.C. Health­care Sys­tems, with Rapid­Trans and Char­tered Fam­ily Health Cen­ter listed as af­fil­i­ates of the health plan.

An ac­com­pa­ny­ing graphic shows an or­ga­ni­za­tional chart that lists D.C. Health­care Sys­tems along with Char­tered Health Plan and Char­tered Fam­ily Health Cen­ter as “mem­bers of the hold­ing com­pany.”

For 2010, Rapid­trans is not listed on the hold­ing com­pany chart, though it is re­ported as an af­fil­i­ate in a sep­a­rate sec­tion of the an­nual re­port. But or­ga­ni­za­tional charts con­tained in prior years’ an­nual re­ports do dis­close Rapid­trans as part of the D.C. Health­care Sys­tems hold­ing com­pany.

Through­out those years, cam­paign fi­nance records show nu­mer­ous in­stances of Rapid­trans and D.C. Health­care Sys­tems sep­a­rately giv­ing the max­i­mum checks to city politi­cians on the same day. Some­times, they gave to dif­fer­ent can­di­dates in the same race.

Max­i­mum checks

On Aug. 30, 2006, D.C. Health­care Sys­tems gave $2,000 to can­di­date Marie Johns’ may­oral cam­paign. Rapid­trans do­nated $2,000 on the same day.

Days ear­lier, D.C. Health­care Sys­tems and Rapid­trans each gave $2,000 to Adrian M. Fenty’s 2006 may­oral cam­paign. The coun­cil mem­ber at the time was run­ning against Ms. Johns.

Af­ter Mr. Fenty won, the next Ward 4 coun­cil mem­ber, Muriel Bowser, re­ceived three checks on Jan. 25, 2007, from D.C. Health­care Sys­tems, Char­tered Fam­ily Health Cen­ter and Rapid­Trans — each for $500, the most al­lowed in a ward race.

Sim­i­larly, when Mr. Fenty was run­ning to rep­re­sent Ward 4, he re­ceived two $500 checks from Char­tered Fam­ily Health Plan and D.C. Char­tered Health plan on the same day, Nov. 1, 2000.

More re­cently, Rapid­trans and D.C. Health­care Sys­tems last year each gave $1,000, the most al­lowed for an at­large race, to coun­cil mem­ber Vin­cent B. Orange, at-large Demo­crat, whose of­fice did not respond last week to re­quests for com­ment.

Mr. Orange also re­ceived a pair of $1,500 con­tri­bu­tions in 2010 from Rapid­trans and D.C. Health­care Sys­tems when he was run­ning for coun­cil chair­man.

D.C. Coun­cil mem­ber David A. Cata­nia, at-large in­de­pen­dent, whose health com­mit­tee over­sees Char­tered Health Plan, which holds a city Med­i­caid con­tract, re­ceived a $1,000 check from D.C. Health­care Sys­tems on March 27, 2006, the same day he re­ceived a check for the same amount from Rapid­trans.

A spokesman for Mr. Cata­nia ac­knowl­edged the do­na­tions but, like Mr. Men­del­son, pointed out that city cam­paign-fi­nance reg­u­la­tors had not raised an is­sue about them.

“They were fully vet­ted by cam­paign fi­nance,” said Cata­nia spokesman Bren­dan Wil­liams-kief. “Any con­tri­bu­tions by Jeff Thompson or re­lated com­pa­nies in the past have had no im­pact on coun­cil mem­ber Cata­nia’s will­ing­ness to pro­vide heavy and strong over­sight.”

When The Times re­ported in 2004 that Char­tered Health Plan re­ceived a $1.8 mil­lion no-bid con­tract to open a health clinic in Ward 7 for 24 hours a day, seven days a week, but in­stead closed overnight and on Sun­days, Mr. Cata­nia called the ar­range­ment “out­ra­geous.” D.C. of­fi­cials even­tu­ally said Char­tered would re­turn the money.


BENE­FAC­TOR: D.C. Coun­cil mem­ber Phil Men­del­son said he re­lies on cam­paign fi­nance reg­u­la­tors to alert him if some­thing is amiss in do­na­tions he re­ceives.

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