PRESS RELEASE

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.