Jeffrey Thompson, founder of Thompson, Cobb, Bazilio & Associates.
Jeffrey Thompson, founder of Thompson, Cobb, Bazilio & Associates. (Credit: C-SPAN.)

Jeffrey Thompson, a Washington businessman and government contractor, pleaded guilty on Monday to funneling hundreds of thousands of dollars in illegal campaign contributions to local and federal candidates, including the D.C. mayor and a presidential candidate.

During a plea hearing, prosecutors alleged that Mayor Vincent Gray (D) not only knew about an illegal shadow campaign supporting his candidacy in 2010, but personally asked Thompson for his help. Gray has denied any wrongdoing.

Thompson admitted making illegal payments to reimburse political donors and funding shadow campaigns for candidates in local and federal government.

Thompson has long been reported as a central figure in a far-reaching campaign finance probe by the U.S. attorney’s office in Washington, but today was the first day prosecutors attached him publicly to the investigation. According to the criminal information filed Monday morning, he faced two counts of conspiracy—one for violations involving federal campaigns and one for violations at the local level.

U.S. District Judge Colleen Kollar-Kotelly accepted Thompson’s guilty plea.

Under the plea deal, prosecutors agreed to drop the first count of conspiracy for federal campaign violations if Thompson complies with the terms of the agreement, which include cooperating with law enforcement.

Assuming Thompson is only sentenced on the second count, prosecutors agreed to seek a maximum sentence of six months in jail and three years of supervised release. Under the agreement, Thompson could face up to 18 months in jail if sentenced for the first count. The maximum sentence by law for both charges is five years in jail.

Williams & Connolly represents Thompson. Tobin Romero, a partner in the white-collar defense practice, appeared in court with Thompson. He did not immediately return a request for comment.

Williams & Connolly partner Brendan Sullivan Jr. has represented Thompson for more than a year as he wrangled with prosecutors over the review of millions of pages of documents seized in 2012 under a search warrant. Sullivan also could not immediately be reached and was not in court Monday.

From 2006 to 2011, prosecutors charged Thompson with making hundreds of thousands of dollars in unlawful contributions to at least 15 mayor and city council candidates. Those contributions came in the form of reimbursed donations and financial support for shadow campaigns.

Although most candidates’ identities were kept secret during the hearing, Kollar-Kotelly ordered the government to publicly acknowledge that one of the candidates was Gray.

Prosecutors said Thompson agreed to back Gray’s 2010 bid for mayor early, but didn’t want to publicly support him for fear of retribution from then-Mayor Adrian Fenty (D). In coordination with a member of Gray’s campaign team, Vernon Hawkins, Thompson financed get-out-the-vote efforts and asked donors to give to Gray’s campaign, with the understanding he would reimburse them.

Gray knew about Thompson’s role as a fundraiser, according to prosecutors. To mask Thompson’s involvement, Thompson asked Gray to refer to him as “Uncle Earl,” which Gray agreed to do.

In August 2010, according to prosecutors, Hawkins approached Thompson about needing more than $400,000 to pay for get-out-the-vote efforts. Thompson said he wanted Gray to ask him directly. Thompson claimed the two men met and Gray presented him with a one-page budget listing $425,000 in expenses.

Thompson claimed he told Gray that because he couldn’t publicly support him, he would channel the payments through Hawkins and another co-conspirator, Eugenia Harris. Harris pleaded guilty in 2012 to being part of the illegal shadow campaign. After the meeting, Gray, according to prosecutors, “expressed gratitude.”

After Gray won, according to prosecutors, Thompson gave $10,000 to one of Gray’s family members, at the unidentified family member’s request, to pay cash to Gray supporters; $10,000 to support an unidentified candidate in a union election, at Gray’s request through an intermediary; and $40,000 to cover the expenses of one of Gray’s close friends, who was not identified.

In 2011, prosecutors said Thompson asked Harris to ask Gray to help “expedite” a settlement agreement the city was negotiating in a dispute with one of Thompson’s companies, D.C. Chartered Health Plan Inc., which contracted with the city to provide managed care. The city reached a settlement that year with D.C. Chartered.

In an interview Monday with The Washington Post, Gray called Thompson’s allegations that he knew about the shadow campaign “lies.” He acknowledged referring to Thompson as “Uncle Earl” to keep his involvement with the 2010 campaign a secret, but maintained he only asked contributors to legally raise money on his behalf.

The only other public official named during the hearing was former D.C. councilmember Michael Brown. In 2006, Thompson admitted paying Brown $200,000 and agreeing to a one-year consulting retainer in exchange for Brown dropping out of the mayoral race. Thompson later financed shadow campaigns to support Brown’s candidacy for city council in 2007 and 2008, according to prosecutors.

Brown pleaded guilty last year to accepting bribes in a separate case. As part of his plea deal, Brown admitted campaign finance violations. He is scheduled for sentencing on April 28.

According to prosecutors, Thompson also made unlawful contributions to 13 federal candidates and multicandidate political action committees.

In 2008, he allegedly made $608,750 in unreported contributions to support a presidential candidate. The Washington Post previously identified the candidate as Hillary Clinton. Last year, prosecutors charged a marketing executive, Troy White, with organizing an unofficial get-out-the-vote effort for Clinton that cost the same amount Thompson was charged with making today.

Thompson also peadled guilty to filing false corporate income tax returns with the Internal Revenue Service to cover up the illegal campaign contributions. He was released on personal recognizance and required to surrender his passport.

Thompson is scheduled to be back in court on May 15.

Updated at 6:52 p.m.

Contact Zoe Tillman at ztillman@alm.com. On Twitter: @zoetillman