I N F O R M A T I O N The Independent
Counsel charges:
COUNT ONE
Introduction
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.
- 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.
- 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.
- 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.
- Among the principal businesses of RLSM was lobbying, public relations, communications
management, including business related to and before the United States Department of
Agriculture.
- 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.
- Corporation X's principal place of business was in California, where it grew, produced,
processed and marketed the agricultural products of its cooperative members.
- 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.
- 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.
- A senior official at Corporation X maintained an office at RLSM in Washington, D.C.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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:
- 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;
- falsifying and causing the falsification of the financial books and records of Bozell,
Inc.; and
- 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.
- 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:
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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).
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