Prosecutors clash with D.C. attorney general over records in ongoing city corruption probe Federal investigators are asking questions about the District's decision two years ago to pay out millions of dollars to the former city contractor at the center of the ongoing probe into Mayor Vincent C. Gray's 2010 campaign. Renewed interest in the $7.5 million settlement with D.C. businessman Jeffrey E. Thompson comes as Gray is close to making a decision about whether to seek a second term. It has also left top officials in his administration bristling at the ongoing questioning of what they consider an equitable, above-board deal. In recent weeks, prosecutors have asked the District attorney general's office to turn over thousands of e-mails and other documents related to the city's decision to settle a long-running contract dispute with Thompson over reimbursement rates for dental care. Attorney General Irvin B. Nathan has refused to hand over the records, citing attorney-client privilege. He criticized the line of questioning from federal law enforcement officials as "preposterous." "If this is all they've got, they are in desperate shape," Nathan said in an interview this week. If they've got a claim, make a damn claim in court or get off it. U.S. Attorney Ronald C. Machen Jr. urged the attorney general in a statement Wednesday to reconsider, saying that the "withholding of relevant documents is currently preventing federal investigators from fully understanding actions taken by District officials." D.C. residents "would be best served by a comprehensive and unfettered investigation that resolves any doubts about criminal wrongdoing by elected officials or others," according to the statement from Machen's office. Investigators have also sought to interview a top deputy at the Department of Health Care Finance, the office that negotiated the deal with Thompson's D.C. Chartered Health Plan. The fresh inquiry into the 2011 settlement is one element of a sprawling investigation involving an alleged $653,000 secret campaign for Gray in 2010. Prosecutors have been building a case against Thompson, who is described in court documents as the alleged financier of the "shadow campaign" for Gray and as the alleged mastermind behind illegal "straw" donations for a long list of local and federal political campaigns. Neither Thompson nor Gray has been charged with a crime. Gray has denied any wrongdoing and portrayed himself more recently as an unwitting victim of corrupt campaign advisers. Thompson's attorney, Brendan V. Sullivan Jr., declined to comment. For a dispute over a sensitive ongoing criminal investigation to be publicly and pointedly addressed by high-ranking officials is unusual and reflects the frustrations of the parties involved. Prosecutors are under pressure to bring closure to their investigation, which dates to early 2011, while time is running out for Gray to pursue a second term. Four D.C. Council members and several other candidates are seeking his job, and Gray has until Jan. 2 to qualify for the April 2014 primary ballot. Gray's aides and supporters have expressed exasperation that Machen has not either charged or cleared the mayor.