Contract Scam Investigation

D.C. Council hires lawyer Robert P. Trout to probe recreation contracts

By Nikita Stewart
Washington Post Staff Writer
Saturday, March 6, 2010; B05

In an escalation of its investigation into million-dollar city contracts awarded to firms with ties to the administration of Mayor Adrian M. Fenty, the D.C. Council has appointed well-known defense lawyer Robert P. Trout to further probe the contracts.

Council member Harry Thomas Jr. (D-Ward 5), who has led the special inquiry into contracts for recreation centers since October, said Friday that he wants an independent examination of how the Fenty administration awarded the contracts without council approval.

The appointment of Trout, who will work pro bono, comes days after the council censured Marion Barry (D-Ward 8) following an independent investigation by Washington lawyer Robert S. Bennett, who concluded that Barry personally benefited from a $15,000 contract he secured for a former girlfriend. The council also unanimously voted to refer the public corruption allegations against Barry to the U.S attorney's office.

Depending on Trout's conclusions, the council could take the same approach with the contracts investigation, said council Chairman Vincent C. Gray (D). "We're talking about tens of millions of dollars in contracts that were involved in this effort," Gray said Friday at a news conference at the John A. Wilson Building. "The testimony is stunning, shocking. . . . There's a lot of questions associated with this thing."

Four council committees launched a joint special investigation in October after learning that the Fenty administration had transferred millions of dollars to the D.C. Housing Authority to build recreation centers, ballfields and parks -- a process that skirted a law that requires council approval of contracts that exceed $1 million. Banneker Ventures, a firm owned by Fenty friend and fraternity brother Omar Karim, won a $4.2 million contract to oversee and select subcontractors for $82 million in construction.

Attorney General Peter Nickles has said that the contracts should have been submitted to the council for approval, but he deemed them legal and binding. In an interview Friday, Nickles said Thomas's goal is to malign Fenty (D). "Obviously, that's where this is headed," he said. "That's the motivation. It's political motivation. . . . It just seems to me it's being viewed by Thomas as a tit for tat."

Nickles said that he has provided documents to Thomas, the office of the inspector general and the office of the D.C. auditor, and that he would cooperate with Trout's investigation.

One of Trout's most recent clients was former Louisiana congressman William Jefferson, who was convicted of corruption after $90,000 in marked bills were found in a freezer in his home. On Friday, Trout said that he had been hired by the Montgomery County Council in the early 1980s to investigate corruption within the county's liquor-distribution operation, and concluded that there was no wrongdoing.

A. Scott Bolden, attorney for Karim and subcontractor Sinclair Skinner, said he expects Trout to draw the same conclusion in the contracts investigation. "While there may have been mistakes made, there was no criminal wrongdoing," he said. "It begs to question what the Trout investigation or Trout report will bring. Not one scintilla of evidence has been uncovered that someone or some agency engaged in criminal conduct."

Skinner, also a friend and fraternity brother of Fenty, has not testified before the council despite invitations and a subpoena to appear. Last week, Superior Court Senior Judge Stephen F. Eilperin ordered Skinner to appear before the council on March 24 or risk a $5,000 fine for non-appearance on that day and another $1,000 a day for continued no-shows.

Thomas said the investigation, which he hopes will wrap up in the next 45 days, could have ended earlier if witnesses, especially Skinner, had been more cooperative. "I don't know about you, I can't be left at the altar but so many times," he said.

http://www.washingtonpost.com/wp-dyn/content/article/2010/03/05/AR2010030503858_pf.html

Takes Money To Get Money - When Welfare Is Development

D.C. gives H Street developer $5 million tax break

By: Bill Myers
Examiner Staff Writer
March 4, 2010

The D.C. Council has given a multimillion-dollar subsidy to a developer of the gentrifying H Street corridor. Without dissent, the council approved an emergency measure that grants a tax abatement to Steuart Investment Co., owner of the lot at the corner of Third and H Streets Northeast. The tax break is designed to help the Chevy Chase developer build a high-rise building with shopping, restaurants and apartments or condos. Under the law, Steuart's property taxes will be frozen at what it paid in fiscal 2010 for 10 years. The company then will pay a portion of taxes above the fiscal 2010 level through fiscal 2030. The breaks are capped at $5 million -- 7 percent of the project's expected costs.

Third & H Street project

» $67.5 million

» 42,000 square feet of retail, including a multi-story grocery store

» 210 apartments or condos

» Parking garage with up to 270 spaces

A planned grocery store gets its own 10-year tax break, but that isn't capped. In the fall, Chief Financial Officer Natwar Gandhi warned the council against the legislation because the city -- facing nine-figure budget gaps -- can't afford it. The legislation was championed by Councilman Tommy Wells, D-Ward 6, who represents H Street. The Steuart development, he said, "is the linchpin to the revitalization of H Street." "H Street, since the riots of 40 years ago, has been a street noted by chaos, disorder, drug sales," Wells told The Examiner. "The street is really rebounding, but it takes investment and city help." Developers and city planners have been eyeing the H Street area between Third and 15th streets as a potential real estate gold mine as young professionals spill out of Capitol Hill and head north looking for nests. A series of boutiques and high-end restaurants and bars have sprouted on H Street in the past decade, and the city is planning to build a streetcar line there. In related legislation, the council also passed a bill that would allow business owners along H Street to obtain a property tax deferment this year. Wells said the deferments would help compensate owners whose businesses are being hurt by the city's reconstruction efforts on H Street. A similar law was passed last year. Two businesses inquired about the tax deferment, and one applied for it, finance office spokesman David Umansky said.

bmyers@washingtonexaminer.com

RheeFenty Rock Throwing

D.C.'s Rhee told that replacing Hardy principal may backfire

By Bill Turque
Washington Post Staff Writer
Thursday, March 4, 2010; B01

There are signs that the lingering dispute over Chancellor Michelle A. Rhee's decision to replace Hardy Middle School Principal Patrick Pope may be driving away the very families she sought to attract with the change: those in the "feeder" elementary schools in Northwest Washington.

Parent leaders told Rhee at a meeting Tuesday that the Georgetown school, which requires that students apply for admission, has received no completed forms from any of the approximately 150 fifth-grade families at Hyde-Addison, Key, Stoddert or Eaton elementary schools.

Last year, about 35 percent of fifth-graders from the feeder schools entered sixth grade at Hardy. Many of the rest secured spots at Deal Middle School, Washington Latin Public Charter School or parochial or other private schools.

Applications from students at other city elementary schools are also down sharply, from 162 at this time last year to 30 as of Monday morning, parents reported, although many more students are seeking admission through a school system lottery.

"Clearly the removal of Mr. Pope has hurt the program," said Keenan Keller, chairman of the panel of parents, teachers and administrators known as the LSRT (Local School Restructuring Team) for Hardy.

An enrollment decline would have funding consequences for the school, which has about 160 sixth-graders. Pope, who will leave his post in June, confirmed the numbers and said he was "very concerned." But with a March 31 application deadline, Rhee said it is still too early to draw conclusions.

"We would have to wait until the application deadline to have data that is really meaningful," she said in an interview after the meeting.

Rhee announced late last year that Pope, founder of the arts and music program that draws a majority-African American student body from across the city to the newly renovated school, would be replaced in June by Hyde-Addison Principal Dana Nerenberg.

Rhee said she wanted to strengthen Hardy's identity as a neighborhood school despite the application process, which she describes as confusing for local families. Rhee has assigned Pope to begin planning a middle school arts magnet. Nerenberg will run both Hardy and Hyde-Addison, underscoring the continuity between Hardy and its surrounding feeder schools.

Some African American parents at Hardy said Rhee is trying to alter the demographics of the school, an assertion she denies.

Parents at some of the feeder schools said that instead of making Hardy more inviting, the turmoil has given them pause. Sherry Woods, who has a fourth-grader at Eaton and two children at Hardy, said there is concern about having a principal running two schools.

"I don't want a principal who's got her feet in two doors," Woods said. "One of those learning environments is going to be grossly impacted. Bottom line, it will be the middle school."

Allan Assarson, who has a third-grader at Key and a sixth-grader at Hardy, said Key parents are worried about Hardy faculty following Pope out the door. "There are a lot of concerns about the transition Rhee is imposing," he said.

Rhee is also locked in a dispute with the LSRT over the District's annual out-of-boundary lottery for parents seeking to place students in schools outside their neighborhoods.

Until this year, Pope ran Hardy with an unusual degree of autonomy, based on a 2003 decision by the old Board of Education designating the school as a "special program." He instituted an application process that includes a student letter, teacher recommendation, the most recent report card and a school visit. Pope and Keller have said that it was set up as a way to assess students' needs and reach out to parents, not as a device to exclude anyone.

Families within Hardy's attendance boundaries are guaranteed spots. And rarely has an out-of-boundary family that completed the application process been denied admission, Pope has said.

But Rhee wants Hardy to draw out-of-boundary students from the lottery and then require them to complete the application process as a condition of admission. Citywide, interest in Hardy remains robust.

In the lottery that closed Sunday, 151 students put in bids for sixth-grade seats at the school, up from 88 last year.

"I actually believe that what we want to create here is a process where any family, regardless of where they live, as long as they fulfill the requirements of the application, have an equal opportunity," Rhee said.

Keller, an attorney for the House Judiciary Committee, said District law allows specially designated schools such as Hardy to admit by application and to use the lottery at the back end of the process if necessary to fill spaces.

Rhee and the LSRT ended the meeting at an impasse.

"Once again, you are creating instability at Hardy," said Keller, who contended that Rhee was "not in compliance" with D.C. law.

"I disagree," Rhee said.

Inquiries to D.C. Attorney General Peter Nickles and school system General Counsel Jim Sandman were referred to Rhee spokeswoman Jennifer Calloway, who said in a statement late Wednesday: "The Chancellor has the authority to set the selection criteria for Hardy, and she has determined that selection of out-of-boundary students shall be based on the good-faith completion of all elements of the application process and participation in the out-of-boundary lottery."

http://www.washingtonpost.com/wp-dyn/content/article/2010/03/03/AR2010030302585_pf.html

Judging Fenty On His Terms

When asked about the opportunity to unite a seemingly divided city, the mayor said he was elected to "provide high-level service to every District resident, no matter where you live" and suggested that he should be judged on that.


http://www.washingtonpost.com/wp-dyn/content/article/2010/02/28/AR2010022804185_pf.html

DC Gov Pats Itself On The Back

Storm assessment: Sidewalks were biggest problem in D.C.

By: Hristina Ninova
Special to The Examiner
February 28, 2010

City workers did a good job clearing the streets after the recent snowstorms, D.C. officials said, but residents and business owners not doing their part to clear the sidewalks was a problem.

City officials and residents dissected the city's snow cleaning performance at a meeting of the D.C. Council's Public Works and Transportation Committee.

The biggest issue, they said, was the impassable sidewalks. Residents complained that unshoveled pedestrian walkways and huge piles of snow blocking access to many of the cleaned ones was a threat to public safety, forcing Washingtonians to walk on the streets.

The heads of the District's transportation and public works departments explained that it is the responsibility of the business owners and residents to clean their own sidewalks.

"People were not ready to clear their own sidewalk three to four times," said DDOT Director Gabe Klein.

Another problem that the witnesses pointed out was that not all D.C. streets were properly plowed and some residential areas were missed.

Klein explained that in some cases, plows were not large enough to push the deep, heavy snow. In other cases, plows were too wide to make it down narrow residential streets that had cars parked on both sides.

He also said that the cleaning efforts and funds were spread fairly across the city's eight wards.

Part of the efforts to improve the snow-cleaning results for next year will include the purchase of a new truck that will suck and melt the snow, Klein said.

http://www.washingtonexaminer.com/local/Storm-assessment_-Sidewalks-were-biggest-problem-in-D_C_-85584277.html

Finally DC Boosts Recycling Laws

D.C. to require cardboard, plastic recycling

By: Michael Neibauer
Examiner Staff Writer
February 26, 2010

All property owners in the District -- commercial and residential -- will be required to separate cardboard and plastic containers from their regular trash under overhauled recycling regulations being proposed by the Fenty administration.

The revised rules also quadruple in some cases the fines for commercial property owners who repeatedly fail to properly recycle. Penalties for homeowners, generally $25, are not slated to change.

The amended regulations are an attempt to broaden the District's recycling collections and to discourage repeat commercial violations by holding down penalties for the first and second offenses, but hitting violators hard for subsequent wrongs.

The Department of Public Works in 2008 expanded the types of products it could recycle to include wide-mouth plastic containers, plastic toys, plastic lawn furniture and milk and juice cartons. But the agency only requires that newspaper, office paper, yard waste, metal and glass containers are separated from the regular garbage.

Plastic containers and cardboard can be tossed with the regular trash, for now, though some D.C. residents say they recycle those commodities today.

"I already do," said Tenleytown resident Beverly Sklover. "I would do it anyway. I think it's fabulous."

The District's fiscal 2009 residential recycling rate -- recyclables collected versus total trash thrown away -- was about 24 percent, according to DPW. But homeowners are responsible for only 30 percent of the District's trash.

The revised regulations target businesses, the most prolific trash producers, for more rigorous enforcement.

Amended fines for owners of commercial and apartment buildings would run from $200 for a first offense to $600 for a second within 60 days and $1,500 for a third within 60 days. Current penalties range from $25 to $1,000 per violation, depending on the size and type of building.

The District is right to save its harshest penalties for those who prove unresponsive to the rules, said W. Shaun Pharr, senior vice president of government affairs with the D.C. Apartment and Office Building Association. The size of the building, he said, "is completely unrelated to whether you've been making an effort to comply with the law."

The proposed rules are expected to be made available for public comment on March 5.

http://www.washingtonexaminer.com/local/D_C_-to-require-cardboard_-plastic-recycling-85429237.html

DC Property Tax Assessments

While paying taxes is a good thing - taxes can be a pain!

D.C. assessments drop, but some taxes will rise

By Nikita Stewart
Washington Post Staff Writer
Saturday, February 27, 2010; B03

District residents will continue to see a drop in their property assessments, but about 22,000 homeowners can expect their yearly tax bills to go up an average $345 because of a new law, tax officials said Friday.

Those property owners have benefited from tax-relief programs, including a homestead deduction and a senior citizen tax break. In some cases, the combination of programs resulted in homeowners paying little or no taxes, said Richie McKeithen, director of real property tax administration in the Office of Tax and Revenue.

The D.C. Council approved legislation last year that requires homeowners to pay on at least 40 percent of a property's assessed value. That will lead to the $345 average increase, McKeithen said.

His office released assessments for tax year 2011 and began mailing tax bills Friday. Property owners will have until April 1 to appeal the assessments.

Overall property assessments, both residential and commercial, declined by 6 percent. Commercial property dropped 10.6 percent, and residential property slumped by 3.7 percent.

Four neighborhoods, all east of the Anacostia River, had double-digit declines in residential assessments. Hillcrest, the Ward 7 neighborhood of council Chairman Vincent C. Gray (D) and council member Kwame R. Brown (D-At Large), led the decline at 15.3 percent, followed by Ward 8's Congress Heights (13.2 percent), Ward 7's Deanwood (12.6 percent) and Ward 7's Randle Heights (10.8 percent).

"They got slammed with a lot of foreclosures," McKeithen said. "It's hard to compete . . . when so many houses in foreclosure are on the market."

Council member Yvette M. Alexander (D-Ward 7) noted that the tax office defines the neighborhoods by their core and surrounding communities, so the decline in Hillcrest includes Penn Branch and other areas. "Unemployment is going up. People are losing their jobs. There are really a lot of social factors we need to look at," she said, adding that more education is needed to inform residents that foreclosure is not their only option.

Alexander said the new assessments could provide relief for residents whose tax bills will be lower, but they hurt residents trying to sell.

The new law that sets a 40 percent threshold is a "revenue raiser" but also tries to bring parity to the current tax system, said Ed Lazere, executive director of the D.C. Fiscal Policy Institute. Because of the tax breaks, "owners have seen their tax bills go up not at all or at a modest rate," Lazere said. The tax bill "will come as a shock, but it is still relatively low and significantly lower than their neighbors'."

The waning property values differed from the 2010 declines that spread in double digits to wards 1, 4 and 5. Residents of those wards saw their property values slide but at a slower pace, according to the data.

Three neighborhoods, Glover Park and Berkley in Ward 3 and Central in Ward 2, showed small increases. "These are west of the [Rock Creek] park . . . not far from Georgetown. Clearly, the market, the desire to be in these neighborhoods, was strong. As the market rectifies itself, you'll see it in those areas first," McKeithen said.

Commercially, increases and decreases were scattered throughout the city from Anacostia in Ward 8 to Brookland in Ward 5 to Palisades in Ward 2, although the declines were more dramatic than the gains.

"The good news is that we aren't seeing the large decreases of other cities around the country that are at 25 percent," McKeithen said. "Washington, D.C., is still a desirable place because of the influence of the government."

http://www.washingtonpost.com/wp-dyn/content/article/2010/02/26/AR2010022605706_pf.html