Once-promising relationship caves under Michael Brown’s legal woes in D.C.

When D.C. Lottery operator Emmanuel S. Bailey heard that he had been besmirched in connection with convicted felon and former D.C. Council member Michael A. Brown, he knew who to call.

But a cease-and-desist letter from superlawyer Billy Martin to a detractor of Mr. Bailey only hints at the sensitivity of his connection with Brown, which comes amid an ongoing corruption probe in the nation’s capital by U.S. Attorney Ronald C. Machen Jr.

Once, Brown’s and Mr. Bailey’s fates seemed intertwined and promising as the District, having awarded a $38 million lottery contract to Mr. Bailey and gaming giant Intralot, flirted with an online gaming proposal sponsored by Brown that was expected to raise $280 million in revenue by 2020.

Now, as a federal grand jury examines the award of that contract, Mr. Bailey has retained a heavy hitter to protect him from being smeared by his relationship with Brown, who pleaded guilty June 10 in federal court to accepting $55,000 in bribes.

Mr. Bailey, who has not been charged with any wrongdoing, declined to comment.

A June 12 letter from Mr. Martin to Bethesda attorney Brynee K. Baylor alleges she sent a “false and defamatory written communication about Mr. Bailey” on June 8 to NBA superstar Kevin Durant’s father. The text message, Mr. Martin’s letter states, refers to Brown’s arrest and suggests that Mr. Bailey, who, according to The Associated Press, is president of the board of directors of the Kevin Durant Family Foundation, could be in trouble as well.

“Kevin needs to get away from him!!!” says the text from Ms. Baylor, a former attorney for Mr. Durant, according to the Martin letter. The letter speaks of Mr. Bailey’s “outstanding reputation” with the D.C. Lottery but does not address the nature of the Bailey-Brown relationship, nor is there any indication that Mr. Durant and Mr. Bailey have other endeavors or that a relationship exists between Mr. Durant and Brown.

Rap mogul Jay-Z, whose Roc Nations Sports agency represents Mr. Durant, did not respond to requests for comment. Mr. Martin said in a letter that he does not comment on client matters. Ms. Baylor cited the attorney-client privilege with Mr. Durant and declined to comment.

Mr. Martin’s characterization of his client is debatable.

In a 2012 report, D.C. Inspector General Charles J. Willoughby said Mr. Bailey’s firm, Veterans Services Corp., misrepresented itself during its bid for the lottery contract. The report mirrored conclusions in a 2010 series by The Washington Times that showed VSC boasted of general contracting experience from federal jobs it did not perform for government clients who had never heard of the company. The Willoughby report says it was unclear whether the misrepresentations were made during the evaluation of Mr. Bailey’s lottery bid.

Ms. Baylor has had her own professional scuffles. In 2011, the Securities and Exchange Commission accused her in civil court in an alleged bank scheme to defraud investors out of $2.1 million. In court filings, she claimed she was misled by a client. A member of the D.C. Bar in good standing, she declined to comment on the still-pending matter.

Yet her text, and the resulting lawyer-letter from Mr. Martin, speak to the closeness of Mr. Bailey and Brown. Their relationship, according to multiple documents, includes a review by Brown’s chief of staff of Mr. Bailey’s contract with Intralot, communications between the two during the negotiation phase of that contract and political fundraising efforts that involve Mr. Bailey and mutual associates.

Such was in evidence in March, three days before federal agents arrested Brown in an undercover bribery sting. The Rev. Donell Peterman, senior pastor of the Joshua Group Ministries who once listed Mr. Bailey as his treasurer in a Montgomery County Council election, collected campaign contributions for Brown at a fundraiser hosted by megalobbyist David W. Wilmot, according to people at the event. Mr. Bailey was in attendance that night, sources say, and arrived with Brown at a previous fundraiser, also held at Mr. Wilmot’s house. Mr. Wilmot did not return calls for comment. Efforts to reach Mr. Peterman were unsuccessful.

Brown kept other Bailey associates close. Kenneth R. Brown, a consultant to one of Mr. Bailey’s firms, coordinated a fundraiser at Mr. Wilmot’s house. Kenny Brown also has worked for DC09, the joint venture formed by Mr. Bailey and Intralot to run the lottery, according to Intralot officials. Kenny Brown did not return calls for comment.

Perhaps the most telling bond shared by Michael Brown and Mr. Bailey is a pair of bills sponsored by Brown. In 2010, he co-sponsored a bill that required local partners to control at least 50 percent of future lottery contracts. That year, he also slipped the online gaming proposal into a broader piece of legislation, inviting criticism for lack of transparency that led to a repeal of the proposal in 2012.

Even Brown’s staff had Mr. Bailey’s interests at heart. An exchange between Brown’s former chief of staff, Amy Bellanca, and Intralot’s general counsel, Jay M. Lapine, suggests Ms. Bellanca reviewed the Intralot contract with Mr. Bailey as it was being finalized.

“This is it!” Ms. Bellanca wrote to Mr. Lapine in a March 3, 2010, email copied to Mr. Bailey. “Amy: Many thanks for the review,” came the reply from Mr. Lapine, also copied to Mr. Bailey.

Ms. Bellanca did not respond to requests for comment.

“[Houston] we have a problem!” Mr. Bailey wrote to Brown’s private email that same month, as negotiations hit a bump in the road.

Byron Boothe, Intralot’s vice president for government relations, said his company has been cooperating with investigators in the lottery probe, and that neither he nor Mr. Lapine could comment on the case. But he said Mr. Bailey is doing a good job with the lottery.