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Councilmember Jack Evans Pursuant to July 9, 2019 D.C

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Councilmember Jack Evans Pursuant to July 9, 2019 D.C REPORT OF INVESTIGATION OF COUNCILMEMBER JACK EVANS PURSUANT TO JULY 9, 2019 D.C. COUNCIL RESOLUTION 23-175 O’MELVENY & MYERS NOVEMBER 4, 2019 TABLE OF CONTENTS PAGE I. EXECUTIVE SUMMARY ................................................................................................. 1 II. INTRODUCTION .............................................................................................................. 5 A. Scope of Mandate ............................................................................................... 5 III. THE INVESTIGATIVE PROCESS ................................................................................... 5 A. Scope ................................................................................................................... 5 B. Investigation Metrics .......................................................................................... 6 1. Documentary Evidence............................................................................. 6 2. Witness Interviews .................................................................................... 6 IV. ETHICS REGIME APPLICABLE TO COUNCILMEMBERS ........................................... 8 A. Ethics Training/Advice ....................................................................................... 9 B. Financial Disclosure Forms............................................................................. 10 C. Relevant Code Of Official Conduct Provisions ............................................. 11 1. Rule I - Conflicts Of Interest .................................................................... 11 2. Rule II - Outside Activities ....................................................................... 15 3. Rule III - Gifts From Outside Sources ..................................................... 15 4. Rule VI(a) - Use Of Government Resources .......................................... 16 5. Rule VI(c) - Use Of The Prestige Of Office ............................................. 17 6. Rule VII - Use Of Confidential Information .............................................. 17 V. FACTUAL FINDINGS AND ETHICS ANALYSIS .......................................................... 18 A. Evans’ Ethics Process and Financial Interest Disclosures .......................... 18 1. Factual Findings ..................................................................................... 18 2. Ethics Analysis........................................................................................ 21 B. Law Firm Practice - Squire Patton Boggs ...................................................... 23 1. Factual Findings ..................................................................................... 23 2. Ethics Analysis........................................................................................ 23 C. Law Firm Practice - Manatt, Phelps & Phillips, LLP ...................................... 24 1. Factual Findings ..................................................................................... 24 2. Particular Matters Investigated ............................................................... 25 D. Consulting Services - NSE Consulting, LLC .................................................. 30 1. Factual Findings ..................................................................................... 30 2. Ethics Analysis........................................................................................ 36 i TABLE OF CONTENTS PAGE E. NSE Client - Digi Outdoor Media Inc. & Digi Media Communications LLC .................................................................................................................... 39 1. Factual Findings ..................................................................................... 40 2. Ethics Analysis........................................................................................ 55 F. NSE Client - The Forge Company ................................................................... 60 1. Factual Findings ..................................................................................... 60 2. Particular Matters Investigated ............................................................... 64 G. NSE Client - Eastbanc, Inc./EastBanc Technologies/Squash on Fire ......... 70 1. Factual Findings ..................................................................................... 70 2. Particular Matters Investigated ............................................................... 73 H. NSE Client - Willco ........................................................................................... 81 1. Factual Findings ..................................................................................... 81 2. Particular Matters Investigated ............................................................... 82 I. NSE Client - EagleBank/RDP Management, Inc. ............................................ 90 1. Factual Findings ..................................................................................... 90 2. Ethics Analysis........................................................................................ 93 J. NSE Client - Fischer Holdings ......................................................................... 93 1. Factual Findings ..................................................................................... 93 2. Ethics Analysis........................................................................................ 96 VI. CONCLUSION ............................................................................................................... 96 ii I. EXECUTIVE SUMMARY Pursuant to the Council’s July 9, 2019 resolution, O’Melveny has conducted an investigation of ethical issues associated with Councilmember Jack Evans’ outside employment over the last five years. Outside employment for councilmembers (other than the Council Chairman) has long been permitted in the District, as it is in many other state and local legislative bodies across the country. Advocates of part time legislative models often point to the advantages of a system that allows legislators to stay more closely connected to the experiences of their constituents. But outside employment, particularly where it may relate to the business of the Council or the executive branch that the Council funds and oversees, brings with it increased risks of potential conflicts of interest and other ethical issues. Adherence to an effective ethics program is a critical element in mitigating those risks. Employment by a law firm or consulting business that represents clients with financial interests in pending Council legislation or whose business is regulated by an agency of the District government exemplifies the type of outside employment that would raise potential ethics issues. It is not impossible to manage the increased risks of outside employment that is affected by the actions of government, but it can be challenging to do so in a manner that complies with the Council’s Code of Official Conduct and maintains public confidence in the integrity of the Council and the District’s government. O’Melveny’s investigation found that Evans made some efforts to avoid ethical issues associated with his outside legal and consulting activities, but his overall approach was inadequate and based on a “I know it when I see it” standard, rather than adherence to the actual provisions of the Code of Official Conduct. Based upon a flawed interpretation of his ethical obligations, he failed to disclose the names of any of his consulting clients in his public financial disclosure statements and did not disclose the identity of most of his consulting clients even to his own staff. He repeatedly participated in his official capacity in “particular matters” in which his outside employers or his personal clients had direct financial interests, failing to recognize the inherent conflict that should have been disclosed and addressed. He failed on several occasions to recuse himself from matters involving financial interests of a prospective employer. He received over $400,000 for doing little or no documented work for consulting clients most, if not all, of whom were also “prohibited sources” under the Code of Official Conduct. He made occasional, albeit not substantial, use of his Council staff and office email account to support his outside employment, including the preparation of engagement agreements and invoices. All of these ethical lapses (including those that arguably created mere appearances of improprieties) could have been avoided if Evans had more diligently and regularly sought ethics advice from either the Office of the General Counsel (“OGC”) or Board of Ethics and Government Accountability (“BEGA”). O’Melveny’s review of Evans’ publicly filed financial disclosure forms revealed that although he disclosed his employment with Squire Patton Boggs and Manatt, Phelps & Phillips, LLP (“Manatt”) and his ownership of NSE Consulting, LLC (“NSE”), he failed to disclose any of NSE’s clients in any of the applicable years. Evans completed 1 seven financial statements between May 2017 and May 2019, covering the duration of NSE’s existence. Two of the forms had printing or formatting mistakes that created potential confusion around what information Evans was required to provide for two disclosure periods at issue. But on five other occasions, Evans completed financial disclosures using forms without the formatting mistakes, and those forms clearly required him to disclose the identity of any NSE clients who stood to gain
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