Reg­u­la­tors aware of po­ten­tial vi­o­la­tions

Thompson funds queried in let­ter

The Washington Times Daily - - Metro - BY JIM MCELHATTON

D.C. cam­paign-fi­nance reg­u­la­tors were alerted long ago about po­ten­tial vi­o­la­tions in­volv­ing big con­tri­bu­tions to city politi­cians from busi­nesses owned by D.C. contractor Jef­frey E. Thompson.

But they didn’t do any­thing to stop the flow of cor­po­rate con­tri­bu­tions from Mr. Thompson’s in­ter­twined health care hold­ings, which com­bined for twice and some­times three times the max­i­mum le­gal cor­po­rate do­na­tion to politi­cians in a sin­gle day, records show.

Un­der D.C. cam­paign-fi­nance law, a par­ent com­pany and its sub­sidiaries are limited to a sin­gle cam­paign do­na­tion to a politi­cian per elec­tion. But city records show mul­ti­ple in­stances where Mr. Thompson’s D.C. Health­care Sys­tems and one or more of its busi­nesses sep­a­rately gave checks for the max­i­mum do­na­tion on the same day to the same city politi­cians.

In 2006, for in­stance, then-d.c. Coun­cil mem­ber Vin­cent C. Gray ac­cepted three $1,500 checks from D.C. Health­care Sys­tems, Char­tered Fam­ily Health Cen­ter and Rapid­trans Inc., each the max­i­mum do­na­tion, in his race for D.C. Coun­cil chair­man. City in­sur­ance fil­ings show Mr. Thompson’s D.C. Health­care Sys­tems owned the health cen­ter and Rapid­trans at the time.

Such do­na­tions, which aren’t limited to Mr. Gray, have come un­der scru­tiny af­ter a fed­eral raid this month on the of­fices and home of Mr. Thompson, whose pro­lific fundrais­ing for city politi­cians has co­in­cided with the award of hun­dreds of mil­lions of dol­lars in city con­tracts to his health plan and ac­count­ing firm over the years.

But the ques­tion sur­round­ing do­na­tions from Mr. Thompson’s health care hold­ings isn’t new. In­deed, it came to the at­ten­tion of the D.C. Of­fice of Cam­paign Fi­nance as far back as 2002, records show.

That sum­mer, the of­fice is­sued an “in­ter­pre­tive opin­ion” in re­sponse to a let­ter from D.C. res­i­dent Mar­garet Gen­try, who asked about the “ap­pro­pri­ate dis­po­si­tion of ex­ces­sive con­tri­bu­tions” to then-d.c. Coun­cil mem­ber Carol Schwartz’s 2000 cam­paign from D.C. Char­tered Health Plan, Char­tered Fam­ily Health Cen­ter and Rapid­trans Inc.

All three en­ti­ties were owned by Mr. Thompson’s D.C. Health­care Sys­tems, records show. And all three sep­a­rately do­nated money that, when com­bined, ex­ceeded cor­po­rate con­tri­bu­tion lim­its.

In an of­fi­cial re­sponse, city cam­paign reg­u­la­tors told Ms. Gen­try her let­ter pre­sented an is­sue of how the cam­paign “may ad­dress the ex­ces­sive con­tri­bu­tion.”

The let­ter also quoted city cam­paign-fi­nance law, stat­ing a “cor­po­ra­tion, its sub­sidiaries, and all po­lit­i­cal com­mit­tees es­tab­lished, fi­nanced, main­tained or con­trolled by the corpo-

ra­tion and its sub­sidiaries share a sin­gle con­tri­bu­tion lim­i­ta­tion.” Based on the law, the let­ter said, “any ex­ces­sive con­tri­bu­tion must be re­turned to the donor.”

Still, for years, the money con­tin­ued flow­ing into city cam­paigns, records show.

Wes­ley Wil­liams, a spokesman for the city’s cam­paign of­fice, said Tues­day that the le­gal opin­ion’s thrust wasn’t that the com­pa­nies were re­lated, “but there may have been an ex­ces­sive con­tri­bu­tion spe­cific to that par­tic­u­lar com­mit­tee.”

“There­fore, per­haps, there was no in­sti­tu­tional knowl­edge es­tab­lished or main­tained that these en­ti­ties were pos­si­bly re­lated,” he said. “Our data­base isn’t de­signed to track that in­for­ma­tion and over time. How­ever, we are seek­ing up­grades to our elec­tronic fil­ing sys­tem to ex­pand the pa­ram­e­ters for the iden­ti­fi­ca­tion of ex­ces­sive con­tri­bu­tions.”

The Washington Times ob­tained a copy of the let­ter from the D.C. Of­fice of Cam­paign Fi­nance web­site.

In a brief phone in­ter­view Tues­day, Ms. Gen­try said she was asked to write the let­ter by for­mer coun­cil mem­ber-turned-lob­by­ist John Ray, who sup­ported one of Ms. Schwartz’s op­po­nents in the 2000 race. He did not re­turn phone mes­sages Tues­day. An at­tor­ney for Mr. Thompson also did not re­turn a phone mes­sage.

While reg­u­la­tors and law­mak­ers have pro­fessed to be un­aware of the ties be­tween Mr. Thompson’s health care com­pa­nies, years of fil­ings com­piled by city in­sur­ance reg­u­la­tors make clear the com­pa­nies were not only re­lated, but fell un­der the same cor­po­rate struc­ture.

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 public 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.”

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