Washington Post: Department of Insurance, Securities and Banking Spending Probe

D.C. probes credit card purchases by city insurance department

By Tim Craig
Washington Post Staff Writer
Sunday, February 13, 2011; 8:26 PM

The D.C. Office of the Inspector General is looking into purchases of more than $13,000 in electronics and promotional merchandise by the Department of Insurance, Securities and Banking on city credit cards over the past year, according to employees interviewed by investigators and the agency’s incoming chief.

In recent weeks, the inspector general has interviewed employees about purchases under outgoing Commissioner Gennet Purcell. Last week, Mayor Vincent C. Gray (D) appointed Bill White, a consultant who worked at the insurance department from 2003 to 2004, to replace Purcell.

Officials with the inspector general’s office declined to comment. But insurance department employees, who spoke on the condition of anonymity because investigators asked them not to talk with the media, said the probe centers on electronic equipment bought from several area businesses.

According to city records of credit card purchases, the insurance department spent $7,302 at Electroworld, a Prince George’s County-based company whose owner knows Purcell’s husband, Will. The employees said investigators are also inquiring about $5,857 spent on "electronic sales" at Best Buy. Insurance department officials said the purchase at the retail chain was for five televisions the office needed to keep abreast of current events.

In a statement through the insurance department, Gennet Purcell said the inspector general has found no evidence of wrongdoing. She blamed the investigation on agency employees upset by cost-cutting that led to a dozen layoffs.

"The IG has looked into her personal finances, and she is clean," said agency spokeswoman Michelle Phipps-Evans. "This has been ongoing since she has been at that agency. This all comes from a disgruntled current or former employee."

White, who takes over from Purcell on Monday, said he doesn’t know the "specifics" of the probe but vowed to move quickly to restore public confidence and staff morale.

"I understand, as a District government official, I am there serving the people and even the appearance of improprieties is to be avoided," White said. "I want to find out what is going on and how we should handle the current issues."

In September 2009, then-Mayor Adrian M. Fenty (D) nominated Gennet Purcell, a friend of his wife’s, as commissioner despite concerns from some D.C. Council members that the now 36-year-old lawyer didn’t have enough experience in the insurance industry. Earlier that year, Fenty had appointed Will Purcell to the Contract Appeals Board, but he was stripped of that position after being disbarred in Maryland following an equity-stripping scheme involving a homeowner there.

According to employees interviewed by the inspector general’s office, investigators are looking into whether procurement procedures were followed and are trying to sort out the relationship between Will Purcell and Electroworld and its owner, Nevaldo Bailey.

In 2008, the Purcells sold their Rockville home to Bailey for $585,000.

Public business records do not list Will Purcell as a principal or employee at Electroworld, which has a store on Kennedy Street in the Brightwood neighborhood of Northwest Washington and a repair shop on H Street NE. But Will Purcell is known to Electroworld employees.

When a Washington Post reporter called the repair shop recently and asked for Will Purcell, an employee said he could be found at the Kennedy Street location. When the reporter called that store, an employee said Purcell was out but was expected to return.

When the reporter visited the Kennedy Street store and asked to speak to Will Purcell, an employee directed the reporter to "check upstairs," where Bailey’s office is located.

In an interview at the office, Bailey said Will Purcell is "a friend" and "an associate" but does not have a formal role with the business. "He is a social person, someone I socialize with," Bailey said. "It’s not any kind of business ties. He stops by and visits."

In the store, employees sell cellphones and accessories from behind protective glass. Purchase orders available on the city’s Web site indicate that the insurance department purchases were for "electronic sales."

Keith Slade, who was Gennet Purcell’s executive assistant, is one of two people who can use the agency credit card. He said he used the card to buy "promotional material for the agency" and is not sure why records indicate electronic items were purchased.

According to separate agency receipts, the insurance department spent $2,375 on "promotional items" July 23, including 400 biodegradable tote bags at $5.45 a unit. On Sept. 10, the department bought $2,435 of "Electro World promotional items," which included an order for 1,000 pens at $2.19 a unit.

Slade said he doesn’t remember who asked him to make the purchase. He also said he was not aware that the company’s owner and Will Purcell are friends. But Slade said he thinks employees upset about the recent layoffs are being unfair to Gennet Purcell.

"She had to make the tough decisions," Slade said. "She has done an excellent job at the agency, and now they are throwing dirt at her."

In an interview, Gennet Purcell defended the purchases, saying that it’s not unusual for the owner of a local firm doing business with the city to have a personal relationship with a client or member of his or her immediate family.

"It just made sense to support a local small business. . . . Why do business in Maryland and Virginia when you can do it in D.C.?" she asked. "There is nothing untoward about it. It just happens to be [Will Purcell and Bailey] know each other."

According to procurement rules, agencies can use government-issued credit cards for purchases of up to $2,500 a day. At the insurance department, Slade said, three top-ranking officials, including the budget director, have to sign off on purchases.

Kenneth Ward, chief of policy and administration at the department, is listed as the "approver" for the Electroworld transactions, according to the receipts.

In 2002, Ward and Will Purcell teamed up as co-counsels in a lawsuit that led to Ward being disbarred in 2006 for "incompetence," according to the Maryland Attorney Grievance Commission.

But Ward said he, too, was unaware that Bailey and Will Purcell are friends.

Staff writer Nikita Stewart and staff researcher Magda Jean-Louis contributed to this report.

Kevin Wrege

Founder & President

Pulse Issues & Advocacy LLC

Office: 202-625-1787

Mobile: 202-253-4929

4410 Massachusetts Ave., NW, #150

Washington, DC 20016

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