Metro board chair broke rules in agency land deal

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Local,Transportation,Kytja Weir

Metro's former board chairman broke the transit agency's own rules in getting involved in a land deal for some Metro property to sway a lottery contract with the District, according to an independent review commissioned by the agency's board.

The report, released Thursday, said that D.C. Councilman Jim Graham, a ?longtime Metro board member who also chaired the board in 2009, tried to pressure some local businessmen who sought the District's unrelated lottery contract to drop their bid for a Metro land redevelopment contract. Metro's board of directors released the report, written by the law firm Cadwalader, Wickersham & Taft, after meeting behind closed doors for hours.

At issue were the negotiations dating from 2008 to 2010 on the development of a property belonging to Metro on Florida Avenue Northwest near U Street and Georgia Avenue.

Graham had pressured Banneker Ventures to back out of the process on the condition that he would support some of its members in their quest to win a lucrative lottery contract from the city, the report said. The land, which was located in the ward Graham represents, was ultimately awarded to another group for $10.2 million when the deal with Banneker Ventures fell apart in March 2010. But the land remains undeveloped.

Graham did not benefit financially from his role, according to the report, but violated Metro's board policies at the time by creating a conflict of interest and showing favorable treatment to a consultant or contractor.

"I am pleased that this report joins two other prior reports and finds that there was no suggestion of any criminal act or unlawful financial interest or even financial conflict of interest," Graham said.

The implications of the report's findings were not entirely clear Thursday. Graham, a Ward 1 Democrat, was replaced on the Metro board in January 2011 after 12 years at the transit agency.

"We have no ability to sanction a former board member," said Metro board Chairwoman Cathy Hudgins.

But the results of the report could be used on the District side as fodder for an ongoing federal investigation into the lottery contract.

FBI spokeswoman Lindsay Godwin declined to comment Thursday. But a federal law enforcement official told The Washington Examiner that the FBI will be reviewing the report closely. A federal grand jury has been probing the lottery deal.

Earlier this year, D.C.'s inspector general had reviewed the District's lottery contract but found "insufficient evidence" of misconduct.

A spokesman for the Chief Financial Officer Natwar Gandhi, whose office oversees the lottery contract, said he didn't think the validity of the contract would be affected by the Metro report.

"No city official from the mayor's office or council ever contacted the CFO to try to influence the contract award," said David Umansky.

Metro's board plans to make some recommendations in the future to guard against such violations, board members said.

But they noted that Metro's board has already undergone massive transformation and reforms in recent years, with all but three members new to the 15-person board since the 2009 Red Line crash.

Hudgins said the board first learned about the dealings in 2010. Metro hired the law firm to investigate in May, at an estimated cost of $800,000.

Examiner Staff Writers Alan Blinder and Liz Farmer contributed to this report.

Editor's note: This story has been amended to reflect the following clarification. This story originally contained the incorrect date for when Metro's board first learned about the concerns over the Florida Avenue land deal. Chairwoman Cathy Hudgins said she misspoke to reporters and the correct year should have been 2010.

kweir@washingtonexaminer.com

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