A former District official is alleging that federal prosecutors have contacted Mayor Vincent Gray as they investigate corruption in the D.C. lottery contract.
In a court filing, Eric Payne, a former director of contracts in the chief financial officer's office, said that Gray "acknowledged having been contacted by the United States attorney's office in connection with a grand jury investigation of fraud and corruption related to the legislative matriculation of the lottery contract."
Payne made his statement earlier this month in a sealed document, but District lawyers cited it in a filing of their own.
D.C. Assistant Attorney General Keith Parsons denied that Gray had spoken with prosecutors.
"Mayor Gray has not been so-contacted, and thus could not have 'acknowledged' such an occurrence," Parsons told the court.
A spokeswoman for U.S. Attorney Ronald Machen Jr. declined to comment Wednesday.
The lottery contract is a long-running legal saga for the District that has evolved into civil and criminal matters.
The multimillion deal began in 2007 when the city sought bids for a new contractor to manage the lottery.
Although the District picked a winner in early 2008, the D.C. Council later rejected the deal, partly because of concerns about local businessman Warren Williams' role in the deal.
Payne, whom the city later fired, said that Gray and Ward 1 Councilman Jim Graham pressured him to kill the contract. Both men have denied wrongdoing.
The District ultimately awarded the deal to a firm controlled by Intralot, a Greek company that was Williams' partner in the original bid, and another local businessman.
Payne has argued that the city fired him because he resisted political pressure on the contract. In addition to his wrongful termination suit, he has sued the city and District CFO Natwar Gandhi for defamation.
The Washington Examiner first reported in July that a grand jury had issued subpoenas referring to a law banning bribery of public officials as it sought testimony on the lottery deal.
Graham told The Examiner at the time that he had not received a subpoena from the grand jury.
"I don't belong in this story. I am not under investigation, and I haven't been subpoenaed," Graham said at the time. "If there's a bribe, I haven't heard a thing about it."