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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA


UNITED STATES OF AMERICA

 

VS.

 

JAMES H. LAKE,

  Defendant.


 

Criminal No. 95-0267

Violations:
18 U.S.C. 1343, 1346
(Wire Fraud)

2 U.S.C. 441b (a)
(Illegal Corporate Campaign
Contribution)

2 U.S.C. 441f
(Illegal Conduit Campaign
Contribution)

18 U.S.C. 2
(Aiding and Abetting)

 

I N F O R M A T I O N The Independent Counsel charges:

COUNT ONE

Introduction

       At all times relevant to this Information:

    1. JAMES H. LAKE, the defendant, was a founding "partner" of Robinson, Lake, Lerer & Montgomery, Inc., d/b/a "Robinson Lake Sawyer Miller" (hereinafter, "Robinson Lake" or "RLSM").
    2. Robinson Lake's principal place of business was in New York, New York.
    3. Robinson Lake did business as "Robinson Lake Sawyer Miller" (RLSM).

In addition to its New York operation, RLSM conducted business through its Washington, D.C. office. This Information concerns the activities of the Washington, D.C. office of RLSM.

  1. JAMES H. LAKE, the defendant, was in charge of the Washington, D.C. office and held the position of chairman of the board of directors of Robinson, Lake, Lerer & Montgomery, Inc.
  2. Until on or about June 1, 1994, RLSM maintained its Washington, D.C. office at 1667 K Street, N.W. On or after June 1, 1994, RLSM's Washington, D.C. office was located at 1501 M Street, N.W.
  3. RLSM was owned and controlled by and was a wholly-owned subsidiary of Bozell Worldwide, Inc. (hereinafter, "Bozell" or "Bozell, Inc."), which in turn is owned and controlled by Bozell, Jacobs, Kenyon & Eckhardt, Inc., a Delaware corporation, with its principal place of business in New York, New York.
  4. Among the principal businesses of RLSM was lobbying, public relations, communications management, including business related to and before the United States Department of Agriculture.
  5. A large California agricultural cooperative corporation ("Corporation X") was one of the most important and long standing agricultural clients of RLSM. Corporation X had various matters then pending before the United States Department of Agriculture.
  6. Corporation X's principal place of business was in California, where it grew, produced, processed and marketed the agricultural products of its cooperative members.
    1. Since in or about September 1983, a senior official at Corporation X was responsible for Corporation X's Washington, D.C. based political and lobbying activities. This corporate official, among other things, supervised Corporation X's relationship with RLSM and the activities of defendant JAMES H. LAKE, who reported to this official. This corporate official also directed Corporation X's political and other contributions.
    2. JAMES H. LAKE, the defendant, was listed on Corporation X's organizational chart for Corporate Affairs as being responsible for Corporation X's Washington, D.C. office.
    3. A senior official at Corporation X maintained an office at RLSM in Washington, D.C.
    4. RLSM handled, in part, Corporation X's public relations and lobbying activities, including representing Corporation X's interests before the United States Department of Agriculture. RLSM was on a monthly retainer arrangement plus expenses with its client, Corporation X.
  7. On or about March 30, 1993, Henry Espy lost a special primary election for the Democratic nomination for United States Congress in Mississippi. The special election was held to fill the Mississippi second congressional district seat vacated by Michael Espy, who resigned to become the United States Secretary of Agriculture.
  8. As the result of Henry Espy's unsuccessful campaign for Congress, certain campaign debts were incurred. By in or about March 1994, the campaign debt was in excess of $75,000.
    1. The Henry Espy for Congress Committee was registered as a principal campaign committee with the Federal Election Commission and was designated and authorized by Henry Espy, pursuant to the Federal Election Campaign Act (FECA), to receive contributions and make expenditures in connection with the candidacy of Henry Espy for United States Congress.
    2. FECA, namely, Title 2, United States Code, Section 441b, prohibited, in part and among other things, the contribution or expenditure of corporate assets, whether directly or indirectly, to a campaign of a candidate seeking Federal office.
    3. FECA, namely, Title 2, United States Code, Section 441f, further prohibited, in part and among other things, the making of a disguised contribution to a campaign of a candidate seeking Federal office through a straw donor, or conduit, for the purpose of having the conduit, rather than the true source, pass the funds on to a Federal candidate, or, alternatively, reimbursement of the contribution by the true source to the straw donor which, in effect, converts the donor's contribution to that of the true source.

The Scheme to Defraud

   12. From in or about March 1994 until in or about June 1994, in the District of Columbia and elsewhere, JAMES H. LAKE, the defendant, and others known and unknown, devised and intended to devise a scheme and artifice to defraud, and to deprive another, namely, Bozell, Inc. and RLSM, of the intangible right of honest services, and for obtaining money and property from Bozell, Inc. by, among other things:

  1. creating and causing the creation of a false expense report seeking reimbursement from Bozell, Inc. of money purportedly expended by defendant JAMES H. LAKE for the benefit, and on behalf of Corporation X;
  2. falsifying and causing the falsification of the financial books and records of Bozell, Inc.; and
  3. causing Bozell, Inc. to advance funds for the purpose of concealing an illegal corporate campaign contribution to help retire the campaign debt of Henry Espy;

all by means of false, fictitious and fraudulent pretenses, representations, and promises well knowing at the time that the pretenses, representations, and promises, when they were made to Bozell, Inc., would be and were false, fictitious and fraudulent.

  1. For the purpose of executing such scheme and artifice to defraud, and attempting to do so, it was a part of the scheme and artifice to defraud that:
    1. On or about March 1, 1994, in a telephone conversation, a senior official at Corporation X contacted JAMES H. LAKE, the defendant, and solicited LAKE's assistance in a federal election campaign contribution scheme in which LAKE agreed, at the senior official's request, to raise approximately $5,000 to help retire the campaign debt of Henry Espy.
    2. JAMES H. LAKE, the defendant, and the senior official agreed they would use $5,000 of Corporation X's corporate funds to contribute to the campaign fund of Henry Espy for Congress, in violation of FECA. c. JAMES H. LAKE, the defendant, agreed to enlist the assistance of four other officers and employees of the Washington, D.C. office of RLSM to make personal contributions each in the amount of the maximum allowable FECA contribution for individuals of $1,000.
    3. JAMES H. LAKE, the defendant, agreed with the senior official that LAKE's contribution and that of the other RLSM officers and employees of the Washington, D.C. office would be reimbursed using Corporation X's corporate funds.
    4. After on or about March 1, 1994, JAMES H. LAKE, the defendant, agreed with Corporation X's senior official that the reimbursement of the campaign contributors would be accomplished by having RLSM bill Corporation X for a fictitious expense to conceal the reimbursement by Corporation X to the five campaign contributors, including JAMES H. LAKE, of their $1,000 contribution, in violation of FECA.
    5. JAMES H. LAKE, the defendant, and the senior official at Corporation X agreed that the fictitious expense that RLSM would bill Corporation X for would be the purported purchase of a table for Corporation X at an annual fund-raising dinner (the "Dinner") held by a Washington, D.C. based not-for-profit organization.
    6. On or about March 10, 1994, JAMES H. LAKE, the defendant, by virtue of his position and authority at RLSM, created a fictitious expense for the Dinner and requested reimbursement from Bozell, Inc. in the amount of $5,000, thereby creating false, fictitious and fraudulent entries on Bozell, Inc.'s books and records.
    7. On or about March 14, 1994, JAMES H. LAKE, the defendant, caused Bozell, Inc. to issue a check in the amount of $5,000 as reimbursement to LAKE for funds purportedly expended for the Dinner on behalf of RLSM's client, Corporation X.
    8. From on or about March 3, 1994 until on or about March 18, 1994, JAMES H. LAKE, the defendant, solicited four other officers and employees of the Washington, D.C. office of RLSM to each contribute $1,000 to the Henry Espy for Congress Committee. LAKE promised each of these officers and employees that their campaign contribution would be reimbursed. Three of these individuals did as LAKE requested; the fourth individual refused.
    9. From on or about March 3, 1994 until on or about March 24, 1994, JAMES H. LAKE, the defendant, contributed $1,000 to the Henry Espy for Congress campaign fund and reimbursed three officers and employees of the Washington, D.C. office of RLSM each in the amount of $1,000 in exchange for their campaign contributions to the Henry Espy campaign.
    10. In or about March 1994, JAMES H. LAKE, the defendant, provided to the senior official of Corporation X four checks -- one from JAMES H. LAKE, the defendant, and three others from officers and employees of the Washington, D.C. office of RLSM -- each in the amount of $1,000 payable to the Henry Espy for Congress Committee.
    11. JAMES H. LAKE, the defendant, reimbursed his own contribution in the amount $1,000 and retained approximately $1,000 of the $5,000 amount reimbursed to him from Bozell, Inc. as a consequence of the submission of a false, fictitious and fraudulent billable expense report.
    12. On or about April 26, 1994, JAMES H. LAKE, the defendant, by virtue of his position and authority at RLSM, caused RLSM to bill Corporation X, in part and among other things, for the false, fictitious and fraudulent $5,000 expense for the Dinner.
    13. On or about April 27, 1994, a senior official at Corporation X, in his capacity as an officer of Corporation X, approved for payment RLSM's invoice containing the $5,000 expense for the Dinner and thereby caused Corporation X, on or about June 2, 1994, to send its check, payable to RLSM, which, in part, represented Corporation X's payment of the false, fictitious and fraudulent $5,000 expense for the Dinner.

    The Wire Communication

       14. On or about March 11, 1994, in the District of Columbia and elsewhere, for the purpose of executing the scheme and artifice to defraud set forth in Paragraphs 1 through 13 above, and attempting to do so, JAMES H. LAKE, the defendant, unlawfully, willfully and knowingly transmitted and caused to be transmitted by means of a wire communication, to wit, a telephonic communication by computer modem between RLSM, in Washington, D.C. and Bozell, Inc., in Omaha, Nebraska, in interstate commerce, writings, signs, signals, and sounds, to wit, a billable expense report requesting reimbursement for a $5,000 expense for the purchase of a table at the Dinner.

    (Title 18, United States Code, Sections 1343, 1346 and 2).

    COUNT TWO

       The Independent Counsel further charges:

       15. Paragraphs 1 through 13 of Count One of this Information are realleged and incorporated by reference as though fully set forth herein.

       16. From in or about March 1994 up to and including in or about April 1994, in the District of Columbia and elsewhere, JAMES H. LAKE, the defendant, and others known and unknown, unlawfully, willfully and knowingly made a contribution and expenditure aggregating $2,000 and more in calendar year 1994 in violation of the prohibition against corporate contributions contained in the Federal Election Campaign Act; to wit, a contribution and expenditure totaling $4,000 of corporate assets belonging to Corporation X, a California corporation, to the Henry Espy for Congress Committee, a federal political committee, in connection with a primary election held to select a candidate for Representative in Congress.

    (Title 2, United States Code, Sections 441b(a) and 437g(d)(1)(A); Title 18, United States Code, Section 2).

    COUNT THREE

       The Independent Counsel further charges:

       17. Paragraphs 1 through 13 of Count One of this Information are realleged and incorporated by reference as though fully set forth herein.

       18. From in or about March 1994 up to and including in or about April 1994, in the District of Columbia and elsewhere, JAMES H. LAKE, the defendant, and others known and unknown, unlawfully, willfully and knowingly made a contribution in the name of another in violation of the Federal Election Campaign Act; to wit, a contribution in the amount of $1,000 of corporate assets belonging to Corporation X, a California corporation, in the name of JAMES H. LAKE, the defendant, to the Henry Espy for Congress Committee, a federal political committee, in connection with a primary election held to select a candidate for Representative in Congress.

    (Title 2, United States Code, Sections 441f and 437g(d)(1)(A); Title 18, United States Code, Section 2).

     

Dated: Washington, D.C.
October 23, 1995
 


DONALD C. SMALTZ
Independent Counsel

 

Theodore S. Greenberg, Esq.
Special Counsel
Robert W. Ray, Esq.
Associate Independent Counsel
103 Oronoco Street, Suite 200
Alexandria, VA 22314
Tel.: (703) 706-0010

 

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