D.C. Councilman’s Corrupt Misuse of Nonprofits Offers Lessons for Governments

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February 27, 2012; Source: Washington Post

In January, Washington, D.C. City Councilman Harry Thomas Jr. resigned after pleading guilty to embezzling city funds. His instruments of embezzlement? Two nonprofits he controlled. He was somehow able to purloin some $350,000 of city funds meant for youth sports programs that he spent on his own sports, including a golf trip to Pebble Beach, the purchase of a $59,000 luxury Audi SUV, and multiple outings for Thomas and his friends to Hooters, just to name a few of his self-indulgent recreational expenditures.

Not many public officials are able to steal $350,000 in public funds without someone noticing something was happening. Actually, back in 2008, a senior staff person at the source of the funding for Thomas’s nonprofits—the city’s Children and Youth Investment Trust Corp.—raised questions about the Trust’s funding of the Langston 21st Century Foundation, which was funneling money to nonprofits controlled by the councilman. 

The D.C. City Council is holding hearings to explore exactly how the Trust came to be the unwitting source of Thomas’s personal plunder. E-mails among Trust staff revealed by Councilman Jim Graham show that they knew something was amiss as early as 2008 and that Langston wasn’t providing justifications or details on how the money was being spent. Langston was not reporting per the Trust’s requirements, which caused its VP for finance to submit written questions to the head of the Trust suggesting delaying a $96,000 payment. 

Another VP responded exactly the opposite, noting that the funding was “politically sensitive” and that the head of the Trust “would like this check earlier.” That VP, Ellen London, is now the CEO and has denied that there was any political pressure, but according to the Washington Post, she responded to Graham “that the agency treated spending requests that came from a council earmark differently.”

“Earmarks came to us as a done deal,” she said.

Graham has revealed a 2008 e-mail from Neil Rodgers, an aide to then Councilman Thomas, requesting the funds for Langston, with the note that “The council members (sic) wants to know [which] day this week they can send someone to pick up the check.” The aide then sent another e-mail asking “when can Jimmy Garvin pick up the check.” Staff noted Langston was not providing appropriate documentation, but the Trust’s leadership gave Langston a pass—and Langston passed the moneys along to Team Thomas.

Okay, Thomas seems to have demonstrated some political behavior worthy of the politicians in Edwin O’Connor’s “The Last Hurrah,” except that none of them would have stooped quite so low. But the lessons of this tale aren’t just to not elect the likes of Thomas. Two factors in the Thomas, story vis-à-vis the Trust, ought to be abundantly clear: 

  1. Politicians shouldn’t be involved in nonprofits for which they have even a scintilla’s worth of a role in obtaining or distributing funding. It is nearly always a toxic mixture.
  2. The local and state government earmarks for council members and state legislators that we have written about several times in the NPQ Newswire (for example, see here) are a signal to government agencies not to do their jobs. Due diligence and governmental oversight fly out the window.

Let’s use the Harry Thomas Jr. scandal as a case study for pols to get their hands out of nonprofits and for local and state governments to get out of the game of handing elected officials the governmental version of Monopoly money.—Rick Cohen