D.C. Council member Jim Graham (D-Ward 1) filed a complaint with the city’s Inspector General against his Democratic opponent Brianne Nadeau. (Washington Blade file photo by Michael Key)

Gay D.C. Council member Jim Graham (D-Ward 1) added fuel to the fire in the hotly contested Ward 1 D.C. Council race this week when he revealed he filed a complaint last Friday with the city’s Inspector General against his Democratic opponent Brianne Nadeau.

The complaint, which Graham released to the Washington Post, accuses Nadeau of underreporting her income in 2009 to enable her to be eligible for an interest-free city loan to purchase a condominium under a city program for low- to moderate-income residents.

Nadeau released a statement saying she did “everything 100 percent by the book” to obtain her loan and accused Graham of “abusing his office and spending taxpayer dollars to attack a political opponent.”

The Ward 1 Council seat for which Graham and Nadeau are competing is one of six Council seats up for grabs in the city’s April 1 Democratic primary. The other seats in contention are the Council Chair position, one of two at-large seats, and the seats representing Wards 3, 5 and 6.

Also on the primary ballot is D.C. congressional Del. Eleanor Holmes Norton (D), who’s running unopposed; and candidates running for the shadow U.S. Senate and House seats.

Graham, who has held the Ward 1 Council seat for 16 years, is running for a fifth term in office in what observers say is his toughest re-election bid to date.

In his complaint, Graham charges that he observed what he believes to be “serious irregularities” and “perhaps fraud” in a loan application filed by Nadeau in which she allegedly failed to report that her income had increased from the time she initially applied for the loan two years earlier.

Under rules for the Home Purchase Assistance Program, known as HPAP, Nadeau would have been eligible for a loan of $33,050 to cover her down payment and closing costs if her income was below $50,000, which Graham says it was when she first applied for the loan in 2007.

But according to Graham, Nadeau’s income rose to over $50,000 by 2009, when she received the loan while employed by the office of U.S. Rep. John Sarbanes (D-Md.). Under the HPAP program, Nadeau’s higher income meant she was only eligible for a loan of $14,450. The fact that she received the higher amount, according to Graham, raises serious questions about her ethical conduct as well as to whether she committed fraud.

Tom Fazzini, Nadeau’s campaign manager, told the Blade on Wednesday that Nadeau fully reported all of her income, including the income above $50,000, to the Greater Washington Urban League, which the city had retained to administer the HPAP program. He said Graham took out of context an email Nadeau sent to the Urban League saying her income had not changed since 2007.

When asked by the Post to explain a possible discrepancy in her reported income in the email in support of her loan application, “Nadeau said that her base salary had not changed but that she had received bonuses that increased her pay,” the Post reported.

“I have made all the documentation publicly available, which clearly shows that Jim Graham is distorting communications I had with him when I sought his help as a constituent five year ago,” Nadeau said in her statement.

“This is the same corrupt behavior that caused the D.C. Council to reprimand him and strip him of responsibility,” she said.

Fazzini said HPAP officials initially approved her loan at the higher amount when her income was at a lower level but cancelled the loan contract when she was unable to complete the purchase of the condo within a one-year deadline. He said the purchase couldn’t be completed because the condo building was still under construction and the delay in its completion prevented Nadeau from making the purchase at that time.

According to Fazzini, HPAP officials may have had the discretion to allow Nadeau to obtain the higher loan amount under a new contract the following year, even though her income rose above the $50,000 limit, because the missed deadline for the earlier contract was the fault of the condo developer rather than Nadeau’s.

Graham’s allegation against Nadeau follows a barrage of attacks against him by Nadeau during the past two months over a vote last year by the City Council to reprimand Graham on an ethics violation. The Council’s action, in the form of an 11 to 2 vote, stemmed from allegations that he improperly intervened in the approval process for a Metro development project.

Graham has said he acted in what he believed to be in the best interests of his constituents by arguing against one of two developers seeking the Metro contract on grounds that the developer was unqualified to do the work.