From John Hanrahan

SUMMARY: CONFLICTS RE. MARRIOTT AND BREAUX-LOTT/NORTHROP GRUMMAN?
Does the mainstream press in the District of Columbia care about conflicts of interest and ethical problems for members of the D.C. Council other than Marion Barry? If so, why are members of the press corps, of which I was a long-time member, so incurious about the interlocking public-private interests of my Ward 2 Councilmember Jack Evans?

The facts, which point to a glaring, unmistakable appearance of a conflict of interest by Evans, relate to two recent matters of obvious special interest to Evans’s outside employer, the highly influential Patton Boggs law firm/lobbying firm, which pays Evans $240,000 a year for unspecified services:

1. Evans’s recent unsuccessful effort to provide $25 million — or more, if need be — in tax incentives to defense industry giant Northrop Grumman to move its headquarters to the District of Columbia, rather than to suburban Maryland or Northern Virginia locations that were being considered for the planned move. Evans’s actions helped spark a bidding war between the jurisdictions, as The Washington Post noted editorially. Interestingly, and unreported in the press, Northrop Grumman — which stood to benefit from the bidding war — is a client of the Breaux-Lott Leadership Group. Breaux Lott for the last two years has had a “strategic relationship” with Patton Boggs and, according to press reports in March, was in negotiations to be acquired by Patton Boggs. [NOTE: SINCE I WROTE THIS PIECE, NEWS ARTICLES AND A PATTON BOGGS PRESS RELEASE IN THE LAST COUPLE OF WEEKS REPORTED THAT PATTON BOGGS HAS INDEED ACQUIRED BREAUX LOTT AND ITS CLIENTS, INCLUDING NORTHROP GRUMMAN, PRESUMABLY.]  Appearance of a conflict of interest? Newsworthy? I think so.

2. Evans’s ongoing involvement in untangling a legal imbroglio pertaining to the deal for $272 million in public financing that the D.C. Council has approved for the convention center hotel — a deal that will benefit  Marriott International, its development partners and private investors who are putting up the other half of the project’s financing. This ongoing involvement has come despite Evans having abruptly recused himself from the final vote on the matter one year ago — reportedly, according to The Examiner, “because his law firm, Patton Boggs, represents Marriott.” There has been no press follow-up on this recusal and Evans’s continued involvement in the matter. So which is it: Recusal? Or no recusal? Conflict or no conflict? Newsworthy? I think so.

NORTHROP GRUMMAN
First, the details of the Northrop Grumman conflict-of-interest issue, which has gone unreported in the press:

* Evans, as chairman of the Finance and Revenue Committee that handles such matters, took the lead earlier this year in seeking legislation for a $25 million public subsidy package for Northrop Grumman to relocate its headquarters in D.C., rather than in Northern Virginia or suburban Maryland. (A lot of subsidy for potentially a very few new jobs.) If $25 million were not enough, Evans was quoted in the Washington Business Journal as saying: “Whatever someone else puts down we’re going to match it and we’re going to beat it.” See: D.C. may give Northrop Grumman subsidy to move. Evans thus openly invited a bidding war that, as will be shown below, puts him in a serious conflict of interest position.

* Evans’s legislation in fact helped create a “bidding war” with suburban jurisdictions. See the April 14 Post editorial — titled, “The tax-break wars in the D.C. region could use a cease-fire” — that says, among other things: “One of the more distressing aspects of the competition for Northrop Grumman is watching how regional interests get overtaken as governments scramble to outdo each other in offering more inducements.” See the editorial: The tax-break wars in the D.C. region could use a cease-fire.

Further evidence of the bidding war came in an April 19 article in the Post (“Virginia makes a move for Northrop Grumman”): Virginia makes a move for Northrop Grumman.

* Evans, an attorney, is of counsel at Patton Boggs where, according to his 2009 outside income disclosure statement filed last month with the Office of Campaign Finance, he earns $240,000 per year for unspecified services. This is in addition to his service on the council for which he is paid just over half that amount.

* Patton Boggs, according to news articles in March, is in negotiations to acquire the Breaux-Lott Leadership Group lobbying firm. See this article: Patton Boggs is in negotiations to purchase the Breaux-Lott Leadership Group  [AS NOTED ABOVE, SINCE I WROTE THIS PIECE THE PATTON BOGGS/BREAUX-LOTT DEAL HAS GONE THROUGH.]

* Even before the acquisition negotiations — in fact for the last two years — Patton Boggs and Breaux-Lott have had what the Post article above referred to as a “strategic relationship” with each other. (The firm’s powerhouse owners are former Senators John Breaux, a Democrat, and Trent Lott, a Republican.) As Patton Boggs’s March 31, 2008 press release described it, Breaux and Lott “have agreed to become Special Public Policy Advisors to Patton Boggs LLP.” The release added: “The strategic alliance framework between the two firms will allow the firms to pursue, wherever appropriate, joint projects where the talents of both firms can be employed to meet potential client needs.” Patton Boggs chairman Thomas Hale Boggs weighed in with his own comment at the time:  “The strategic relationship between our firms can be a real win-win, not just for each of our firms, but more importantly for our respective current and future clients who can benefit from the capabilities, experiences and skills of both firms.” (Prior to forming Breaux-Lott, Breaux from 2005 to 2008 was a lobbyist and strategist at Patton Boggs.) See the 2008 press release at: Senators Breaux and Lott Named Special Public Policy Advisors to Patton Boggs.

* Lo and behold, as I easily discovered when I ran a routine Google search, Breaux-Lott has Northrop Grumman as one of its major clients — with $1.1 million in fees over the last two years. For the 2009 report (covering $600,000 in fees for Breaux-Lott from Northrop Grumman), see: Open Secrets Northop Grumman Profile.

* Conclusion: At the very time Patton Boggs was negotiating to acquire the Breaux-Lott firm with which it already has an established “strategic relationship,” Evans was pushing legislation that would directly benefit Breaux-Lott’s Northrop Grumman client through $25 million or more in D.C. tax subsidies. Failing that, the legislation and Evans’s vigorous promotion of it (“we’re going to match…and beat” other offers) would still benefit Breaux-Lott and Northrop Grumman by stimulating a bidding war that would lead to Northrop Grumman getting millions of dollars in tax benefits from another jurisdiction. (A merging of Patton Boggs and Breaux-Lott would, of course, make Northrop Grumman a client of Patton Boggs.) For a legislator to promote legislation that would benefit his own firm’s client, or the client of a closely-related firm, is the very essence of conflict of interest, as well as a possible violation of D.C. law.

MARRIOTT AND PATTON BOGGS

Likewise troubling is Evans’s on-again, off-again “recusal” of last June (2009) on the convention center hotel deal for Marriott, for which he has been the driving force for so many years. Why did he recuse himself just before the final June 30 vote on the $272 million public financing package? And then why — his “recusal” unmentioned by the press in subsequent articles (except one) — continue to work “behind the scenes” in the last several months to resolve a still ongoing Marriott/JBG Companies legal dispute that has threatened to unravel the convention center hotel deal? On his web site [at the time of writing], Evans himself reports that “the new Marriott Convention Center Hotel” is among the projects he “is currently working on” — hardly indicative of someone who has recused himself from the matter.

His behind-the-scenes efforts to rescue the hotel deal have been reported by both the Post and Washington Business Journal. See, for example, these articles  — which make no reference to his “recusal” of the previous June: Lawsuit is newest roadblock for District’s long-awaited hotel, Judge dismisses JBG’s convention hotel lawsuit, and Can the convention center hotel be saved?.

[NOTE: SINCE I WROTE THIS PIECE, THE PRESS HAS REPORTED THAT THE JBG-MARRIOTT LEGAL FIGHT HAS BEEN SETTLED WITH THE ASSISTANCE OF PETER NICKLES AND EVANS.)

What was the basis for what I term Evans’s non-recusal “recusal?” Is it true, as The Examiner mentioned briefly in a July 1, 2009 article, that Evans recused himself at that late date “because his law firm, Patton Boggs, represents Marriott”? (See the link to that article — the only mainstream press reference to Evans’s recusal —  below.) For years he led the drive for a public subsidy for the hotel (now at $272 million, to the benefit of Marriott, its development partners and investors), participated in all the discussions, steps and votes leading up to that final vote last June [2009] — and then, one yard from the goal line, suddenly and inexplicably recused himself. Then why, after that abrupt recusal, did he see fit to un-recuse himself in recent months to help end the Marriott-JBG imbroglio? When, exactly, did Marriott become a client of Patton Boggs, as reported by The Examiner? What more suspicion of a blatant conflict of interest (or appearance of same) could there be than this? D.C. tentatively OKs paying $72M more to finance convention center hotel.

The only serious questioning in the mainstream press of Evans’s potential for conflicts over the convention center hotel and other big-ticket deals came in a January 22, 2010 citizen’s opinion piece — by freelancer Peter Tucker — in the Washington Post. But as of now, no one actually on the Post staff —  reporter, editorial writer or columnist — has taken notice of this (or the Northrop Grumman/Breaux-Lott/Patton Boggs/Evans apparent conflict). See Tucker’s piece: Wearing two hats on the D.C. Council.

One dictionary definition of recuse is: “To disqualify or seek to disqualify from participation in a decision on grounds such as prejudice or personal involvement.” Did Evans’s grounds for recusal kick in just before the council’s final vote on the convention center hotel last June? Or should he have recused himself much earlier? Once you recuse ourself, how can you ethically un-recuse yourself? How can Evans (and the council) justify this abrupt recusal, and Evans’s subsequent continuing involvement in the same matter from which he had recused himself? Why has the press been so uninterested in this? (I ask rhetorically.)

The local press is obsessed with Marion Barry’s transgressions, as it should be. But when a powerful council member other than Barry has not one, but two, actual (or, at least, appearances of) conflicts of interests over high-stakes deals that involve actual and potential expenditures of millions and millions of dollars in public funds, that strikes me as news.

When the issue of his outside employment (permitted under the D.C. Charter for all council members, except the chairman) came up during his 2006 election campaign, Evans deflected it by saying he had only two full-time jobs — on the D.C. Council and as a single father of three children. I know of no one who disputes that Evans is a hard-working, full-time council member and devoted father. And therein lies the problem: What exactly does he do for Patton Boggs for his $240,000 — $20,000 a month, almost $1,000 per working day? Is this some sort of no-show job for which he is overcompensated by a high-powered lobbying firm not known for expending large amounts of cash and expecting nothing in return? Or do the Northrop and Marriott cases reflect a serious intertwining of interests that give us a glimpse into what that private job entails? Reporters with daily access to the Council should be asking Evans these questions.

As a former reporter for the Washington Star and Washington Post, I frequently investigated and reported on conflicts of interest and ethical problems in the Maryland General Assembly. I also am the former executive director of the Fund for Investigative Journalism. I think I have enough reporting experience to know when an elected official appears to have crossed the line into a conflict of interest and to point out that the local mainstream press is inexplicably giving Evans a free pass on this issue. (Over the last two months I have sent this information to five reporters or editors at four different news organizations, and have had no response thus far.)

I believe all D.C. citizens want clean, open, conflict-of-interest-free government, and many have been troubled as I have been by Evans’s other past transgressions. These include the “Jack Pac” investigation, which then-Post reporter Serge Kovaleski explored so thoroughly several years ago. See D.C.’s Evans Wielded Control Over Finances of PAC Account.

I hope I am proved wrong, but as of now it appears all the Serge Kovaleskis have left the building.