Why did Karl Racine let lobbyists for Digi Media hold a fundraiser for him?

By Jeffrey Anderson | Photograph by Andy DelGiudice

Election season can bring out a candidate’s true colors. Especially when the color is green.

Yet it was somehow surprising to learn that Karl Racine, who is running unopposed for a second term as D.C.’s first elected Attorney General, was having a fundraiser last Tuesday night hosted by lobbyists close to Mayor Muriel Bowser who represented a company his office is suing.

Racine’s 2014 campaign emphasized integrity and ethics, and from the beginning of his first term he sought to distinguish himself from Bowser with the mantra that voters are tired of even a perception of pay-to-play. Tuesday night’s fundraiser, hosted by Bowser insiders J.R. Meyers and David Wilmot, leaves less light between Bowser and Racine now.

Particularly in the last year, Racine has been attentive to campaign finance reform. He has sent up to the D.C. Council a bill that would bar political contributors from bidding on city contracts of more than $100,000 within two years of the preceding election cycle in which they gave to candidates who could influence the award.

Some allies were dismayed to hear of last week’s event at Meyers’ City Center apartment, a well known party spot for the Bowser in-crowd. “Profoundly disappointed,” said a member of the business community who had been hoping Racine would run for mayor.

District Dig arrived at the Meyers residence shortly after 6:30 pm, hoping to get an opportunity to observe Racine in action. Meyers homed in quick, and at first greeted The Dig warmly, before putting a name with a face.

“You know you can’t be here,” said Meyers, who in an oversized Washington Capitals T-shirt looked as if he had been celebrating the Stanley Cup title for more than a minute. When The Dig persisted, Meyers became upset. “You can’t stay,” he said, raising his voice.

The Dig shook hands with At-Large Councilmember Robert White, who was listed on an invitation as a “Special Guest Host,” and attempted to assuage Meyers. But Meyers was having none of it. “I’m gonna call the police! I’m not going to ask you again: Please leave my house!”

The Dig abided, and on the way out bumped into Racine himself, just arriving. The Attorney General moved in for a soul handshake and pound hug. “Hey-hey, what’s going on man, how ‘ya feelin’,” he said. Told of the ejection, he took matters in stride. “Well I think it’s a matter of the press, you know. This is a private event. It’s not cool to just stop by.”

By Friday, Racine was in no mood to talk about the event. He referred questions to his campaign staff. A spokesman for “Karl Racine 2018” said the fundraiser was consistent with Racine’s core values. “Karl is serious about transparency and the campaign finance records reflect that. They speak to what it is, and the records speak for themselves.” (Racine, it must be noted, was dinged for a handful of excess contributions to his 2014 campaign totalling $3,500, a mistake that he promptly rectified.)

But in accepting the largesse of Meyers and Wilmot—two lobbyists with a strong insider game and ties to a company in litigation with the District—Racine may have stretched the boundaries of his own credibility. “He should never tread in such waters,” says Craig Holman, government affairs lobbyist for watchdog group Public Citizen. “He clearly should separate himself from those associations.”    

Since August 2016, Racine’s office has been in litigation against Digi Media Communications over alleged violations of digital advertising sign regulations. Seeing big dollars in those LED lights, DMC, in conjunction with its venture partner Digi Outdoor Media, had installed signs around key commercial corridors in the District when the Department of Consumer Regulatory Affairs issued stop work orders over permit violations and Racine’s office sued to enforce them.

Wilmot and Meyers lobbied the Council to pass legislation sponsored by Ward 2 Councilmember Jack Evans that would override those enforcement efforts, as DOM and its founder Don MacCord poured tens of thousands of dollars into campaign and constituent services coffers and even offered Evans’ son a job.

Evans withdrew the bill, and in spite of additional lobbying to get Bowser to issue executive rules to achieve the same result, the project stalled.

That hasn’t stopped Meyers and Wilmot from keeping their oars in the waters of D.C. politics.

After being escorted down to the lobby by an aide to the Meyers’, The Dig got to wondering why Racine would put himself in a position of indebtedness to Meyers but especially Wilmot, whose influence in the Wilson Building runs so deep he is known as “The King.” Although neither is currently registered as a lobbyist for a Digi entity, the lawsuit against DMC is ongoing, contentious, and has a lot riding on it. In fact, MacCord, who is being sued by the SEC for securities fraud in Washington state and has been indicted in U.S. District Court in Northern California for allegedly selling bogus shares in the D.C. sign venture, has claimed that the signs could generate $800 million in revenue once they get installed and turned on.

Documents in D.C. Superior Court state that DMC has turned over 538 emails by and between Wilmot, Meyers and a third Bowser insider, Joshua Lopez, formerly a board member of the D.C. Housing Authority, regarding the digital sign lobbying effort. While Meyers reported lobbying activity to the Board of Ethics and Government Accountability on behalf of Digi Outdoor Media between September and December 2016, and Wilmot reported lobbying activity on behalf of DMC between February and March 2017, lawmakers regarded them as a team that was working toward the same goal.

The relationship between Digi Outdoor Media and DMC has been a source of confusion. Court records state that investment firms Valterra and Blue Skye originally merged to form a firm called BSV Media, which along with Digi Outdoor Media formed the joint venture known as Digi Media Communications. A spokesperson for DMC says that Digi Outdoor Media is no longer associated with the joint venture, and that Meyers and Wilmot are no longer representing their interests. The firm also says it has had no formal relationship with Josh Lopez, who is not registered as a lobbyist for either entity. Lopez denies any involvement with the firm or its business activity.

Lobbyist disclosure reports show that Meyers terminated his relationship with Digi Outdoor Media in 2016 after lobbying the Council for digital sign legislation that would negate Racine’s lawsuit, and that Wilmot terminated his relationship with DMC in 2017 after asking the Council to support executive rule making to that end. They each were paid $40,000, the reports state.

Both lobbyists appeared to be earning their fees.

Evans told The Washington Post earlier this year that he introduced the emergency legislation that would work around Racine’s enforcement action at Wilmot’s request. Court documents in the lawsuit state that Wilmot and Meyers (and Josh Lopez) persuaded City Administrator Rashad Young to delay an emergency regulation in 2016 that was adverse to DMC’s interests.

Ethics experts have mixed views as to whether Racine has run afoul of rules, laws or standards. “The potential conflicts are prolific here,” says Holman, cautioning that he sees no explicit violation of regulations that pertain to lobbyists. “It looks as if [Racine] sat down with his lawyers and figured out how to get around ethics rules, but that doesn’t mean it’s ethical behavior.

“Ethics as a concept is broader than what is right or wrong under the law. Frankly I’m a little surprised that Karl Racine would do this. Reasonable people will say this is not ethical behavior. He might not face legal consequences, but he will face political ones.”

Kathleen Clark, a legal ethics expert who serves on the D.C. Bar Rules of Professional Conduct Review Committee, needed a minute to wrap her head around the two lobbyists raising money for D.C.’s top legal official who is battling their former client in court. “Wait, doesn’t David Wilmot lobby for everyone?” she asked, rhetorically.

“It sounds like a situation where [Wilmot and Meyers]  have attempted to assist their client in dealings with the D.C. government in different directions for the same purpose: To get the government off their clients’ back,” says Clark. “They have lobbied the Council and the Mayor, and one wonders whether their fundraising [for Racine] is part of an overall strategy on behalf of the client.”

Clark concedes that the fundraising would be more troubling if Wilmot and Meyers were still registered as lobbyists for the Digi entities, but acknowledges that it’s often hard to tell whether a different sort of government consulting is occurring, or an undisclosed financial relationship exists. “It raises the specter of possibility that Racine’s gratitude could affect how he represents the District in the litigation,” she says.

Clark sees no evidence of a concerted strategy, but, given Wilmot’s omnipresence, and the possibility that he and Meyers might have other incentives, she finds it problematic that “These guys might just think it’s in their personal professional interest to cultivate a relationship [with Racine].”

In the end, it boils down to whether a quid pro quo exists, and according to D.C. Bar Legal Counsel Saul Singer, that is a question of fact that must be proved under the law. “If you can’t prove it, it never happened,” Singer says.

A truism in politics that the Racine campaign understands all too well. “There’s no way to draw a direct line without evidence between campaign contributions and the outcome of a piece of litigation,” says the campaign spokesman. “That’s not the way his office operates, and that’s not the way Karl Racine operates.”




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Categories: Politics