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Catania labels Wilson Building deal a ‘sham’

‘I want to leave him penniless," councilman says of developer

(Published February 8, 1999)


Staff Writer

After hearing six hours of testimony from the developer hired by D.C. City Council to refurbish the Wilson Building, at least one council member wants T. Conrad Monts held personally liable for the deal gone awry.

"I want to see him penniless," said David Catania, R-At large, after the Feb. 2 hearing. "It’s a sham."

Monts’ attorney did not return calls for comment.

The council is already suing Monts, charging that he double-crossed the council by agreeing to act as its agent and then leasing out space to the federal General Services Administration that was designated for the council’s use.

Catania said he wants to file additional suits to terminate the agreement, halt payments of Monts’ $2.5 million developer’s fee, and recapture the $1 million he already has received.

"He was breaching the agreement while the fees were being paid," Catania charged. "He should not be allowed to keep them."

According to council sources, Monts is scheduled to receive the next installment of his fee, about $500,000, within the next month. The final installment is payable upon completion of the renovation work.

The developer’s fee is not paid directly by the council but by John Hancock In-surance, which lent Monts $52 million to finance the renovation.

Catania, who brought 20 pages of questions for Monts to the hearing, later alleged that Monts’ corporation, Washington Development Group, is not a legitimate corporation.

Testifying under oath, Monts told council members the board of directors of his corporation includes Monts, his wife and his brother.

"Has your wife ever voted against you in a board meeting?" Catania asked.

"No... Yes... Plenty of times," Monts replied. After giving conflicting answers, he agreed to bring records of votes of the board, along with responses to several other questions he was unable to immediately answer, to a subsequent council hearing. That hearing has not yet been scheduled.

"Discovery will indicate that this small family-held corporation is not a legitimate corporation," Catania alleged in an interview. "Monts and the corporation are one and the same. We can hold him personally liable if we can pierce the corporate veil."

Consensus is building among city leaders for getting out of the deal, with council members calling on Mayor Anthony A. Williams and Delegate Eleanor Holmes Norton to add their clout to the fight and possibly broker a deal with GSA to turn over the whole building.

Getting out of the deal will likely cost the District heavily, however, since council already signed a lease for space in the building. Monts’ attorney, Richard Gross, said at the hearing it could cost as much as $80 million for the city to get out of the deal.

Meanwhile, council members and the mayor are working on plans for ending the agreement, either through litigation or by convincing the GSA to give up the lease it signed with Monts for two-thirds of the building.

Outside attorneys for the council have requested a preliminary injunction from D.C. Superior Court Judge Gregory Mize to stop construction.

Councilwoman Charlene Drew Jarvis, D-Ward 4, said the mayor’s control over the construction permit process could be another way to slow Monts down.

Catania has vowed to have another ream of questions for Monts at the next hearing.

"We are not done with him by a long shot," he said.

Copyright 1999, The Common Denominator