Washington Mayor Vincent Gray knew about an illegal election-cash scheme that helped fund his 2010 campaign and personally requested funds from the man running it, federal prosecutors said in court Monday.
Gray, who has not been charged with a crime, strongly denied the claims, which arise from a federal probe that has resulted in multiple convictions and which have dogged the first-term mayor's aspirations to win reelection in November.
"This is absolutely untrue, period," Gray told a local media outlet in his office Monday. "It's lies."
The federal prosecutors' claims were made in a hearing in which a high-rolling government contractor, Jeffrey E. Thompson, 58, pleaded guilty to violating federal and local campaign laws between 2006 and 2012 as he funneled $2 million in donations to both federal and local Washington politicians.
Prosecutors said Thompson got around campaign donation laws by giving money to scores of other donors, who would in turn donate that money to campaigns that included Gray's and those of previous Washington, D.C., mayoral candidates, according to the Washington Post.
Prosecutors said Gray knew about the scheme, knew it was illegal, and made up a code name -- "Uncle Earl" -- to refer to Thompson, whom Gray personally asked for fundraising help, the Post reported.
"Gray presented Mr. Thompson with a one-page budget for $425,000," Assistant U.S. Attorney Michael Atkinson said during the hearing, according to the Associated Press. "He asked Mr. Thompson to pay for a get-out-the-vote campaign. Mr. Thompson agreed."
Thompson also reportedly gave tens of thousands of dollars to one of Gray's family members and a business associate.
In turn, prosecutors said, Thompson asked Gray to help "expedite" a settlement with Thompson's firm, D.C. Chartered Health Plan, which had hundreds of millions of dollars worth of contracts with the city before the company went into receivership, the Post reported.
Thompson was the sole owner of the company, which provided health plans for the city's low-income residents. The company was also reported to be the city's largest contractor before allegations arose of financial mismanagement in 2012.
The city cut ties, but ultimately had to agree to pay $48 million to settle the company's outstanding accounts with healthcare providers after reaching a settlement agreement in August.
Federal prosecutors said Monday that company funds were used in Thompson's "shadow campaign" to shell out illegal campaign contributions, which has previously resulted in convictions for a former council member and associates of both Thompson and Gray.
Thompson pleaded guilty to the charges the same day they were filed, in an apparent plea deal. He has not been sentenced.