Audit finds funding questions in Brown campaign

The D.C. Office of Campaign Finance recommended Tuesday that the agency’s general counsel take “whatever action deemed appropriate” against D.C. Council Chairman Kwame R. Brown’s 2008 re-election committee after an audit uncovered substantial financial-reporting inconsistencies.

The OCF audit cited several large discrepancies, including understating contributions by $133,700, understating expenditures by nearly $203,000 and overstating the cash balance by more than $69,000.

The six-month OCF probe delved deeply into the Brown campaign’s record-keeping and expenditures, including payments to consultants, such as Mr. Brown’s brother, Che Brown, who has worked on all of Kwame Brown’s election campaigns, and Che Brown’s business, Partners in Learning, a motivational and business-coaching firm.

The audit revealed that the committee spent $379,654 — or 46 percent of its total expenditures from August 2007 through March 2008 — on a company called Banner Consulting, which was retained to manage field operations for the campaign. Invoices provided by the committee, though, did not match services rendered by Banner. Of the money paid by the committee to Banner, $239,663 was then paid or transferred from Banner to Mr. Brown’s brother’s firm, Partners in Learning, which had reached a subcontracting agreement with Banner.

Partners in Learning netted more than $25,800 under the arrangement, according to a profit-and-loss statement submitted by the company.

The audit also found that Mr. Brown’s campaign committee issued eight checks totaling $31,590 that were paid to “cash.” Five of the checks were not accompanied by the proper documentation.

In a prepared statement late Tuesday afternoon, Kwame Brown, who also is under fire for the leasing at public expense of a fully equipped Lincoln Navigator, said his brother worked “tirelessly” on the campaign, and he tried to ensure supporters and others about his and the committees compliance efforts.

“While certain corrections have been made to reports filed with OCF by the committee, it is important to note that all funds received from our supporters were deposited into the committee bank account and used only for purposes of our campaign,” said Mr. Brown, who at the time in question was seeking re-election to his at-large council seat.

He also said $102,763 in contributions and $169,431 in expenditures “were only used for campaign purposes.”

Auditors concluded that “reports, statements and responses filed by the Committee to Re-Elect Kwame R. Brown were not in substantial compliance with the Campaign Finance Act” and referred the report to OCFs general counsel.

The 2008 campaign faces several sanctions, including fines.

Mr. Browns 2008 campaign records have been under scrutiny since last fall, when he won the council chairmans race.

The final audit comes after a recent Clarus poll reflected a 54 percent approval rating for the D.C. council and a 43 disapproval rating of Mr. Brown.

The campaign spending of D.C. Council member Harry Thomas Jr. of Ward 5 also is being probed by the OCF, and several Ward 7 residents have asked the OCF to investigate whether council member Yvette Alexander commingled or misspent campaign and constituent services funds.

All three lawmakers are Democrats.

In the Thomas case, a misuse-of-funds probe involving his nonprofit organization, Team Thomas, that began during the Fenty administration has broadened to include the OCF.

Mr. Thomas, who won his 2010 re-election bid, has denied any wrongdoing.

In Ms. Alexander’s instance, a letter sent Friday on behalf of eight community members asked the OCF to investigate several of their concerns, including possible commingling of funds and the failure to report in-kind contributions.

In the letter, Geraldine Washington, who lives in Ms. Alexander’s ward, wrote, “It is our hope that careful and great consideration be given to our request and a formal investigation be conducted to substantiate or nullify the community’s concerns regarding this matter.”