WASHINGTON (AP) -- The nearly five-year federal investigation of ex-District of Columbia mayor Vincent Gray ended Wednesday with no charges filed, a victory for the longtime public servant who maintained he was unaware his aides were breaking the law to help get him elected.
The long-running probe exposed an illegal, $660,000 slush fund set up by an influential Washington businessman to help Gray defeat then-mayor Adrian Fenty in 2010. The businessman and five others pleaded guilty to felonies. But federal prosecutors couldn't establish that Gray committed a crime or knowingly conspired with his advisers.
"Based on a thorough review of the available evidence and applicable law, the U.S. Attorney's Office has concluded that the admissible evidence is likely insufficient to obtain and sustain a criminal conviction against any other individuals," the office said in a statement that did not mention Gray by name.
The investigation started shortly after Gray took office in 2011 and came to define his only term. It was a major factor in his loss to Muriel Bowser in last year's Democratic primary. Three weeks before the primary, prosecutors said in court that Gray knew about the illicit funds pouring into his campaign, a move that Gray's supporters called unethical meddling in an election.
"I think it was unfortunate that he was convicted in the press years ago, and so obviously he feels vindicated now," Gray's attorney, Robert Bennett, said Wednesday.
Prosecutors offered Gray a deal in September 2014 to plead guilty to a single felony charge. Gray rejected it, and the investigation continued for nearly a year after Gray left office.
With the prospect of federal charges no longer looming, Gray, 73, could mount a political comeback. He is considering a bid for the D.C. Council, a move that would invoke comparisons to Marion Barry, who returned to the council and eventually the mayor's office after serving prison time on a drug charge.
"Here in the District and around the country, many people have had their faith in our justice system tested," Gray said in a statement released through his former campaign manager, Chuck Thies. "Justice delayed is justice denied, but I cannot change history. I look forward to getting on with the next chapter of my life, which will no doubt be dedicated to service."
The slush fund, which prosecutors called a "shadow campaign," helped bridge the fundraising gap between Gray, who raised $1.7 million ahead of the 2010 Democratic primary, and Fenty, who raised $4.9 million. Gray's victory was fueled in part by high turnout and huge margins in poor, predominantly black neighborhoods east of the Anacostia River, where the shadow campaign was based. Then-U.S. Attorney Ronald Machen suggested that Gray's victory was tainted, although pollsters said Gray almost certainly would have won without the shadow campaign.
Machen stepped down as U.S. Attorney for the District in March. In October, Channing Phillips took office as his permanent replacement.
Prosecutors laid the groundwork for a potential conspiracy charge against Gray in documents filed when the source of the shadow funds, businessman Jeffrey Thompson, pleaded guilty.
By the time Thompson got involved in Gray's campaign, he already had a playbook for funneling illegal money to his favored politicians, prosecutors said. He would bundle straw contributions from his employees, friends and relatives, later reimbursing them, and would also fund campaign activities by associates and their companies without reporting his contributions. Among the candidates who received such support from Thompson was Hillary Clinton in 2008. He also backed several D.C. Council members and candidates, including Michael Brown, now serving a prison term for bribery.
Prosecutors alleged that Gray presented Thompson with a one-page budget for $425,000 and knew that the money wouldn't be reported to the city's campaign-finance office. With the primary looming, Machen said the charge against Thompson represented the "tip of the iceberg." Gray maintained that he considered Thompson an ordinary campaign bundler and didn't know he was breaking the law, but the political damage was done.
Peter Zeidenberg, a defense attorney with the Arent Fox law firm and a former prosecutor in the Justice Department's Public Integrity Section, said he assumed prosecutors would move quickly to indict Gray after what he called "unusually explicit" statements about the mayor's actions.
"They oversold the investigation. It's sort of a cautionary tale," he said.
D.C. Council member Mary Cheh, who called on Gray to resign amid the allegations, said she now has great sympathy for him and believes the city could benefit from his return to office.
"That was extremely unethical as far as I'm concerned, for a prosecutor to go out in public on the eve of an election and announce, in effect, that the person they're investigating is guilty," said Cheh, a Democrat who is also a constitutional law professor.
Machen, now in private practice, did not return a message seeking comment Wednesday.
As mayor, Gray, was a detail-oriented technocrat who earned praise for his management of city finances. The city enjoyed low crime, an increasing population and a booming real estate market during his tenure, and Gray maintained the key school reform measures launched under Fenty.
However, the succession of Gray campaign aides who pleaded guilty and criminal convictions against three council members for unrelated crimes fueled perceptions that the local government was hopelessly corrupt even as the city thrived.
Follow Ben Nuckols on Twitter at https://twitter.com/APBenNuckols. His work can be found at http://bigstory.ap.org/content/ben-nuckols.