District Business Owner Sentenced for Conspiring to Violate Campaign Laws and to Obstruct Justice in a Federal Investigation
Friday, September 16, 2016
WASHINGTON - Eugenia C. Harris, a business owner in the District of Columbia, was sentenced today to 90 days in a halfway house or community corrections facility and an additional 180 days of home confinement for taking part in a conspiracy to disguise the source of campaign contributions in federal and local elections, including the 2010 District of Columbia mayoral campaign, and then taking steps to conceal the illegal activities from investigators.
The sentencing was announced by U.S. Attorney Channing D. Phillips, Paul M. Abbate, Assistant Director in Charge of the FBI Washington Field Office’s Criminal Division, and Thomas Jankowski, Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI).
Harris pled guilty on July 10, 2012, in the U.S. District Court for the District of Columbia, to three charges: one count of conspiring to violate federal campaign finance law and to obstruct justice; one count of engaging in fraud and making false statements, and one count of conspiring to violate District of Columbia campaign finance law. The Honorable Colleen Kollar-Kotelly sentenced Harris to one day in jail, which she already has served, and three years of supervised release. The 90 days in a halfway house or community corrections center and the 180 days of home confinement are to take place at the start of the period of supervised release. Judge Kollar-Kotelly also fined Harris $1,000.
Harris, 79, of Washington, D.C., admitted to participating in a scheme with business owner Jeffrey E. Thompson and others, in which Thompson’s funds were used to make conduit contributions to various federal and District of Columbia political candidates and to finance “shadow campaigns” of unreported contributions and expenditures in support of candidates.
Thompson is the former chairman, chief executive officer, and majority owner of Thompson, Cobb, Bazilio and Associates (TCBA), a corporation that provided accounting, management, consulting, and tax services. He also is the former chairman, chief executive officer, and owner of D.C. Healthcare Systems, Inc. (DCHSI), an investment holding and for-profit corporation. In his guilty plea, Thompson admitted using funds from those corporations to secretly finance campaign contributions and activities from at least 2006 until 2012. He was sentenced on Aug. 15, 2016 to three months of incarceration, to be followed by 90 days of home confinement. Both Thompson and Harris ultimately cooperated with the investigation.
Harris and Thompson are among 14 people who pled guilty to charges in a broader investigation related to federal and local political campaigns. They are among six defendants who pled guilty to offenses directly involving or connected to the 2010 District of Columbia mayoral election. All 14 defendants charged in this investigation have now been sentenced.
According to the government’s evidence, Harris, Thompson, and others conspired with each other to make contributions in violation of the prohibition against disguised contributions made through conduits in various District of Columbia and federal elections.
Further, in 2010, Harris conspired with Thompson and others to use over $653,000 of Thompson’s funds to implement a shadow get-out-the-vote effort to support a candidate running for Mayor of the District of Columbia. Money for this campaign passed through Belle International, Inc., one of Harris’s companies.
In 2011, when the mayoral shadow campaign was being investigated, Harris conspired to, and did, obstruct the investigation. Among other things, she created false documentation and filed false 2010 federal and District of Columbia tax returns for Belle International - essentially characterizing the shadow campaign payments from Thompson as a legitimate business arrangement. By deducting these non-deductible expenses of the shadow campaign from her company, Harris caused a total tax loss of $402,366.
The Federal Election Campaign Act establishes limits on the amounts that individuals can contribute to individual and multi-candidate political action committees. It also prohibits a person from making a political contribution in the name of another person. The act bars a person from reimbursing a donor who has already given to a candidate. In addition, the law bans corporations from contributing money to candidates for federal public office.
The District of Columbia Campaign Finance Reform Act and Conflict of Interest Act similarly regulates financial activity intended to influence the election of candidates for District of Columbia office.
In announcing the sentence, U.S. Attorney Phillips, Assistant Director in Charge Abbate, and Special Agent in Charge Jankowski commended the work of those who investigated the case for the FBI and IRS-CI. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorneys Ellen Chubin Epstein and Lionel André, Criminal Investigators Mark Crawford and Melissa Matthews, and Paralegal Specialists Tasha Harris and Corinne Kleinman. Finally, they expressed appreciation for the work of Assistant U.S. Attorney Michael K. Atkinson and Special Assistant U.S. Attorney Jonathan P. Hooks, who represented the government at sentencing.