Donald C. Smaltz, Independent Counsel In re Espy, announced:
Today, Judge Ricardo M. Urbina sentenced James H. Lake, a prominent
Republican Washington lobbyist who represented organizations with business before the
Department of Agriculture, to pay a fine of $150,000 and two years probation. The Court
also required that Lake, as a special condition of probation, write and distribute to more
than 2000 lobbyists and entities, at his own expense, a monograph detailing the criminal
provisions of the Federal Election Campaign Act relating to corporate and conduit
contributions to candidates for federal political office.
Lake pleaded guilty on October 23, 1995 to one count of wire fraud
for defrauding his company of his loyal and honest services by submitting a false $5000
invoice to a charity dinner, and to two counts of illegal corporate campaign
contributions. Lake committed these offenses in March and April 1994 in connection with
Henry Espy's campaign to replace his brother in Congress. Lake made the contributions one
year after Henry Espy was defeated in the Democratic primary.
As a special condition of probation proposed by the Office of
Independent Counsel, Lake agreed to and the Court ordered him, within three months of
sentencing, to use his special skills in public relations to publish, at his own expense,
a monograph concerning four areas covered by the Federal Election Campaign Act: (1) its
contribution limits; (2) its prohibitions and criminal provisions regarding corporate
campaign contributions; (3) its prohibitions and criminal provisions regarding conduit
contributions; and (4) methods of preventing criminal violations of the Act. Additionally,
Lake is required, also at his own expense, to distribute the monograph to the 490 members
of the American League of Lobbyists, the 1602 political action committees sponsored by
corporations, and the 41 political action committees sponsored by cooperatives. Federal
law does not require these individuals and organizations to register with the Federal
Election Commission, and the FEC does not otherwise regulate them.
The $150,000 total fine imposed represented $100,000 for the wire
fraud count and $50,000 for each of the Federal Election Campaign Act counts.
Since entering into a Plea Agreement with the Office of Independent
Counsel on October 23, 1995, Lake has cooperated in the investigation of Sun-Diamond
Growers of California, Sun-Diamond Vice President Richard Douglas and Secretary of
Agriculture Mike Espy. Lake testified as a government witness in two trials, the
convictions of Sun-Diamond Growers and Douglas.
Mr. Smaltz stated:
In pleading guilty, James Lake, a prominent Republican lobbyist, made illegal
contributions to help retire the debt of an obscure defeated Democratic congressional
candidate from Mississippi, who was the brother of the Secretary of Agriculture. Mr. Lake
committed these acts because of the Washington infirmity of attempting to buy access to
and influence with the regulators. The sentence imposed on Mr. Lake sends two messages --
the criminal justice system will not stand for subversion of the decision-making process
of government officials, and cooperation with the prosecutor remains the best way for a
participant in a criminal act to avoid incarceration.
Mr. Lake avoided imprisonment as a result of his cooperation. The unwillingness of
individuals to cooperate has substantially delayed the investigation and prosecution of
Secretary Espy. It is important to the administration of justice that people understand
that if they cooperate with the Independent Counsel they will receive serious
consideration at sentencing.
The Independent Counsel's investigation is continuing. The trial of
Secretary Espy for accepting more than $35,000 in illegal gratuities, attempting to
conceal his unlawful conduct and other related offenses is scheduled to commence before
Judge Urbina on March 30, 1998.
To date, this office has obtained convictions of seven individuals,
five corporations, and one law firm, civil settlement with a Wall Street securities firm
and recovered $10.6 million in fines and penalties for the United States Treasury in
carrying out its duties as originally requested by the Attorney General and appointed by
the Special Division.