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A team of investigators hired by the D.C. City Council accused council member Marion Barry of public corruption Tuesday for securing a $15,000 contract for his ex-girlfriend and taking a cut for himself.

Although Barry has run into legal trouble in the past — including convictions for drug possession and failure to pay local and federal taxes — Tuesday’s allegations marked the first time the former mayor has been accused of pocketing taxpayer money.

Barry obtained a contract for Donna Watts-Brighthaupt after lending her money to help pay her bills, according to a report delivered to the council by Washington lawyer Robert S. Bennett. To get some of his money back, Barry at one point delivered a city check to Watts-Brighthaupt, drove her to a bank and waited in the car until she came back with the cash.

Barry, 73, denied the allegations leveled against him. “I have been in office 55 years, and even my public enemies, my political enemies, my other enemies have never implied that I ever took a penny that wasn’t owed to me,” Barry said from the council dais in reaction to Bennett’s report.

The report also says Barry “provided substantial financial benefits to some of his close friends and supporters” and called for the case to be referred to federal prosecutors.

“We conclude Mr. Barry breached the highest ethical standards expected of him,” Bennett told the council during the public hearing. “We find his conduct not only appeared to be improper, but was improper. We find Mr. Barry breached the public trust and violated the conflict-of-interest laws of the District of Columbia.”

The report also found that Barry (D-Ward 8) “mounted a concerted effort” to interfere with the investigation by attempting to dissuade Watts-Brighthaupt from fully cooperating with her subpoena.

Barry’s colleagues stopped short of calling for his resignation Tuesday, but several indicated that they support Bennett’s recommendation to submit the matter to the U.S. attorney’s office for investigation. Benjamin Friedman, a spokesman for the U.S. attorney, declined to comment.

However, two law enforcement sources familiar with the matter said FBI agents and prosecutors have been examining the allegations since they became public in July. Barry might have violated the law, they said, but prosecutors are not sure they could have proved the allegations in court and will cull information from the report, according to the sources, who spoke on condition of anonymity because they are not permitted to discuss such matters in public.

Absent a criminal probe, however, council members said the District charter has no mechanism for impeachment. But they have begun discussing a possible censure resolution.

With his colleagues looking on, Barry told Bennett, who is best known for representing President Bill Clinton during the Paula Jones lawsuit, that he “resented” being publicly accused of misusing taxpayer dollars.

Bennett said: “Mr. Barry has done some good for this city. . . . I don’t question his motives, but we plain and simple found he has done some wrong.”

City and federal laws

In July, the council retained Bennett, of Hogan & Hartson, to conduct an investigation into how Barry and other council members use earmarks for programs and projects in the District. Bennett was assisted by a dozen associates as well as lawyer Amy R. Sabrin of Skadden, Arps, Slate, Meagher & Flom, who served as his deputy special counsel in the probe. The pro bono investigation — which drew on more than 1,000 hours of work and included 43 interviews and 46 subpoenas — stemmed from published reports that Barry had hired Watts-Brighthaupt as a contractor in his office.

Bennett concluded that Barry violated conflict-of-interest laws by giving Watts-Brighthaupt the contract. Also, Barry misled council staff about why she was receiving the contract, according to the report. Although he did not review every earmark, Bennett said, he found no evidence that any council member besides Barry violated any laws.

Watts-Brighthaupt was paid $15,000 in city funds to develop a program called “Emerging Leaders of Ward Eight.” And, according to the Bennett report, “significant portions” of the program manual “were copied without attribution from publicly available materials located on the Internet.”

Barry insisted Tuesday that he did nothing wrong because the council had no written procedures outlining to whom a council member could give a contract. “If there are no written procedures for personal service contracts, no written procedures for scope of work . . . no written procedures for how you evaluate a product, then one who engages in that cannot, cannot be held accountable for violating something that did not exist in the first place,” Barry said.

The Bennett report concludes that council members are bound by District law, which says that “no public official shall use his or her official position or office to obtain financial gain for himself or herself or any member of his or her household.” Bennett concluded that the law also covers boyfriends and girlfriends. Barry is also bound, Bennett said, by federal law, which prohibits “bribery, gratuities and conflicts of interest.”

Watts-Brighthaupt made headlines this summer when Barry was arrested on charges that he had been stalking her at Anacostia Park. The U.S. attorney’s office quickly dropped the charges. They both said this summer that they were no longer dating, but the two continue to be seen together in public. The report concluded that Barry stayed at her home as recently as November.

On Tuesday, she attended the council meeting to hear Bennett’s findings and then lingered in the hallway.

“I’ve been waiting for this day,” Watts-Brighthaupt said in a brief interview with reporters.

When asked by The Washington Post whether she gave Barry “kickbacks,” she said no. But when asked whether the lawyers might have interpreted any money exchanges as kickbacks, she said, “No comment.”

Millions in earmarks

Bennett’s review of council spending concluded that the members have diverted about $143 million to health, charitable, arts and nonprofit social organizations since 2005 through earmarks that bypass the traditional budgeting process.

Barry directed about $8.5 million to 41 organizations in fiscal 2009, Bennett said. Part of that money, about $450,000, was diverted to six Ward 8 nonprofit organizations that “were conceived by Barry and implemented at his direction by Brenda Richardson, a longtime supporter who managed his Constituent Services Office,” the report says.

“Although Ms. Richardson asserts the [organizations] acted independently of Mr. Barry, there is substantial evidence that the council member oversaw the management of the [organizations] through her,” the Bennett report concludes. “This effectively permitted Mr. Barry . . . to avoid legal limits on the amount and kinds of funds that may be expended on constituent service activities.”

To get the organizations operational, Barry and his staff had to make sure they were legally registered nonprofit groups. Some of the incorporation papers were forged, according to the report.

A. Scott Bolden, Richardson’s attorney, said his client “continues to maintain that she did nothing illegal, unlawful or wrong in connection to these grants.”

The Rev. Anthony Motley, a longtime Barry confidant, paid the filing fees with a check from the Marion Barry Scholarship Fund, which was designed to provide scholarships to District residents.

Once the organizations were incorporated, the report says, several of Barry’s friends drew paychecks from them. Richardson, for example, was paid $101,363 combined from three of them.

Motley, who received $54,000 from several organizations that had received an earmark from Barry, did not return calls seeking comment.

Barry, who was instructed by his attorney not to comment further about the report, told his colleagues that he has no regrets about trying to divert money to residents of Ward 8.

“I am a different kind of council member,” Barry said. “I ran to get resources, to uplift the people of Ward 8, to do everything I can to empower them.”