A city investigator alleged in 2008 that Ward 1 Councilman Jim Graham sought to leverage the District's lottery contract for political advantage, though the investigator eliminated that opinion in a later report.

Robert Andary, who ran the internal affairs division in Chief Financial Officer Natwar Gandhi's office, wrote in 2008 that his investigation has "revealed inappropriate actions by Mr. Graham with respect to the council's consideration of the lottery contact."

Andary also wrote in a draft report, first obtained by the Washington Post's editorial board, that the lottery deal had become "highly politicized."

But in a final version of the report, one that had Graham's name redacted from it and is the subject of a court battle, Andary did not include those assessments of Graham's conduct and the lottery deal's status.

Andary began his review after Graham objected to the conduct of Eric Payne, the contracting officer in charge of the lottery contract. Payne was later fired and is suing the city for wrongful termination, arguing that the District dismissed him because he resisted political pressure to revise the lottery deal.

The city contends that Payne was an ineffective employee.

The Washington Examiner first reported earlier this year that a federal grand jury had issued subpoenas seeking information about the lottery contract in connection with a bribery probe.

Although U.S. officials have declined to comment on the investigation, Graham's conduct with the lottery contract has long been the subject of scrutiny, even though the District's inspector general did not accuse him of any wrongdoing after his own probe.

Andary's draft report described a meeting between Graham and Warren Williams Jr., who was seeking the rights to the lucrative lottery contract. According to Andary's investigation, Graham offered to endorse Williams' bid if he abandoned his participation on another project.

That project was linked to Metro, and a report by the transit agency earlier this year found that Graham had breached its conduct policies.

Graham has repeatedly denied he did anything improper.

ablinder@washingtonexaminer.com