D.C. Mayor Vincent Gray on Tuesday sought to curb political donations by existing or aspiring city contractors as part of his long-awaited proposal to overhaul the District's campaign finance practices, even as federal authorities investigate the Gray campaign's dealings with a man who won hundreds of millions of dollars in city contracts.

"It's one of the most important issues that we face in the city at this stage," said Gray, who emphasized that he wants the District government to avoid the appearance of corruption. "It's at the highest level [of priority.]"

Gray's proposal would prohibit donations from people seeking or holding government contracts worth $250,000 or more. It would also bar lobbyists from bundling contributions, ban donations of more than $25 using money orders and increase disclosure requirements.

Donations ban vote?
A D.C. judge will hear arguments Thursday about whether voters will have the chance to consider a sweeping ban on corporate donations to the city's political campaigns. The elections board said the organizers of the ballot initiative didn't secure enough signatures to put the measure on the ballot, but the group appealed.

The mayor first floated an overhaul of the District's campaign finance rules in early April, weeks after federal authorities raided the home and offices of longtime city contractor Jeffrey Thompson.

Thompson was also a prolific contributor to campaigns throughout the city and helped direct hundreds of thousands of dollars in donations from friends, family members and business entities and associates.

He's now under scrutiny because of the role he may have played in bankrolling a $653,800 shadow campaign that helped elect Gray. People familiar with the investigation said that the businessman described in court papers as "co-conspirator No. 1" is Thompson, though the longtime power broker has not been charged. His attorney has declined to comment.

Gray also has not been charged and has denied that he knew of the shadow campaign or of payments to a minor mayoral candidate. The pair of scandals has prompted three Gray campaign operatives to plead guilty to federal charges.

Ward 3 Councilwoman Mary Cheh, who has called on Gray to resign, said the mayor's efforts to reform campaign finance rules come at an unusual time.

"He has been engaged in this issue previously, so it's not that much of a surprise," Cheh said. "Though the two things [the reform bill and the federal investigation] juxtaposed with each other does sort of create an awkwardness."

Gray said that even as he combats corruption allegations, he expected his proposal would get a fair hearing.

"I think you have to focus on the merits of the proposal," Gray said.

Gray said the city would accept public comments on his proposal through Sept. 17, after which the D.C. Council will begin formal consideration of the measure.

Examiner Staff Writer Liz Essley contributed to this report.