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http://www.latimes.com/news/local/la-na-lewis8jun08,0,3348102.story?page=1&coll=la-home-headlines

Powerful Lawmaker's Relative Linked Financially to Contractor
By Peter Pae, Tom Hamburger and Richard Simon
Times Staff Writers

June 8, 2006

WASHINGTON — A political fundraising committee headed by a defense contractor has paid thousands of dollars in fees to the stepdaughter of House Appropriations Committee Chairman Jerry Lewis (R-Redlands) at a time when the contractor has been lobbying Congress for funding.

Lewis' stepdaughter, Julia Willis-Leon, has been paid more than $42,000 by the Small Biz Tech Political Action Committee, according to campaign finance records. The PAC is led by Nicholas Karangelen, founder and president of Trident Systems Inc.

Records show the company received at least $11.7 million in earmarked funds in recent defense spending bills over which Lewis' committee has jurisdiction.

The Small Biz Tech PAC was created early last year "to establish a strong and clear voice for small technology businesses" dealing with Congress, according to its website, which features a photo of Lewis at one of its events.

PACs customarily collect money from donors and distribute it to political figures in the form of campaign contributions. But in the case of Small Biz Tech, almost one-third of the $115,350 it has reported raising was given to Lewis' stepdaughter, according to figures in its financial disclosure reports.

In fact, the payments to Willis-Leon exceeded the $15,600 total it has contributed to political candidates and other PACs.

Lewis is chairman of the House committee that — with its Senate counterpart — writes all federal spending bills. He is a prominent figure in the broad federal investigation into the relationships that powerful members of Congress and their senior aides have with the government contractors and lobbyists who seek to curry favor with them.

In particular, federal investigators are probing lawmakers' use of earmarking, a practice in which spending provisions are inserted into appropriations bills without the normal budget and review procedures.

Often, senior congressional aides who have helped write earmarks go to work for the lobbying firms that have sought the spending provisions, and use their contacts with their former employers to further the interests of their clients.

This revolving door — along with the rest of the earmark system — has become controversial because its operations are largely shielded from public view and because of the potential for improper influence over spending decisions.

A federal grand jury in California is looking into Lewis' activities.

He has denied any wrongdoing and has said that he has not been contacted by investigators.

"I have always made every effort to meet the highest ethical standards in all aspects of my congressional work," Lewis said in a statement. "I am confident that any review of my work will confirm this."

The relationships among powerful lawmakers such as Lewis, their aides and the lobbying firms and clients that seek their help can become complex — as the case of Lewis' stepdaughter and the PAC illustrates.

Willis-Leon, who lives in Las Vegas, received the bulk of the payments for her work as a fundraiser, the PAC reported. She is also listed on its website as its director. The money was paid out between February 2005 and March 2006.

"I am proud to have worked for the PAC, and I am proud of what it is doing," Willis-Leon said in a brief interview. She disputed the amount of her compensation — which was calculated from government records by the Center for Responsive Politics, a political watchdog group — but did not say what the correct amount was.

Lewis has come under scrutiny in part because of his close ties to a lobbying firm, Copeland Lowery Jacquez Denton & White, in which former Rep. Bill Lowery is a partner. Another partner, Letitia White, is a former Lewis aide with ties to Small Biz Tech PAC and its founder.

The firm's activities are being examined by federal investigators partly because Copeland Lowery represented ADCS Inc., a defense contracting firm headed by Brent R. Wilkes, who has been identified as a co-conspirator in the bribery case against former Rep. Randy "Duke" Cunningham (R-Rancho Santa Fe).

Other Copeland Lowery clients have included businesses, cities and institutions in Lewis' district that have received earmarks. Lewis has defended the earmarks he authorized as serving his constituents.

White, the Lowery partner, played a key role in handling earmarks while working for the congressman. She now lobbies for defense and other firms seeking government funds.

And White has close ties to the PAC's chairman, Karangelen. Together, they own a $1-million town house in Washington that has been listed as the business address of Small Biz Tech PAC; White's half-interest in the town house was first reported by a Harper's Magazine blog.

White's lobby shop represents Karangelen's company, Trident Systems.

Keith Ashdown, an expert in the earmarking process, said Karangelen and Trident put together a potent combination when they hired Lowery's firm, secured the services of Lewis' former Appropriations aide, made campaign contributions to the congressman, then formed a PAC that hired Lewis' stepdaughter.

"If that is not the perfect storm of persuasion, I don't know what is," said Ashdown of Taxpayers for Common Sense, a nonpartisan research organization that tracks congressional earmarks.

Ashdown said Trident had received several lucrative contracts in recent years.

At least four contracts, all since Lowery's firm was hired, were funded by earmarks put into legislation by Lewis' committee and are valued at a total of $11.7 million. In addition, Ashdown said, Trident had been a beneficiary of Lewis-backed funds to support small-business contracts with the Defense Department. Trident received five such contracts last year alone and at least one in 2006, a $9.62-million research contract.

White is at the center of allegations made by onetime defense contractor Thomas Casey of Audre Recognition Systems Inc., a San Diego firm that specialized in automated document conversion software.

In an interview this week, Casey said he had told investigators that he and Wilkes — then working for Audre — had met with White while she was on Lewis' staff to write a provision into a spending bill that would steer federal funds to Audre. Casey said the staff was acting at Lewis' direction.

A Lewis spokesman insisted the episode never occurred.

Casey said he had told investigators that in 1993, Lewis' top appropriations aide, White, escorted him and Wilkes to a basement room in the Capitol where House Appropriations Committee staffers drafted legislation.

There, according to Casey, he was seated in front of a word processor and was asked to type a paragraph into the defense bill that would be so specific that it would limit competition.

The line item was titled "Automated Document Conversion System" and called for spending $20 million to "acquire and test an automated document conversion system for the purpose of converting archival drawings and specifications of systems…."

Casey said he drafted the second paragraph with a final sentence specifying that "the system also shall be able to recognize and distinguish between printed alpha numerics, geometric representations (including arcs, circles, splines and ellipses), symbols, and foreign font sets (including Asian characters) as objects."

The final bill included much of the language Casey wrote, although the earmark was slashed to $14 million, he said.

After initially receiving $4 million in Pentagon contracts under the 1994 earmark, Audre had no further awards, and filed for Chapter 11 bankruptcy in 1995.

By then, Wilkes had left Audre. He began setting up a competing firm, ADCS, in 1995. Two years later, ADCS received a $5-million contract to digitize Pentagon documents and engineering drawings.

John Scofield, the Lewis spokesman, said that the bill-writing episode "just didn't happen."

Scofield cast doubt that an aide to Lewis, then a junior committee member and a member of the minority party, would exercise such influence.

"Nobody has any recollection of this happening, nor any recollection of any staff ever doing this with any lobbyist on any occasion," Scofield said. "Somebody is giving you some bad information."

In a statement released late Wednesday, Lewis said he supported funding the Pentagon document conversion project with the encouragement of several colleagues in Congress, including the Democratic chair of the Defense Appropriations Subcommittee.

"Throughout my career, I have urged the Pentagon to consider promising new technologies by hardworking small businesses," the statement said.

Patrick Dorton, a spokesman for White, said that she had no recollection of the bill-writing episode described by Casey.

A November 1994 article in Federal Computer Week said Lewis "appears to have played the biggest role on the Hill as an Audre advocate," writing letters to defense officials urging them to expand the program.

The obscure trade journal also uncovered in financial disclosure reports that White, then Lewis' aide, had bought stock in Audre on Nov. 3, 1993, one week before the passage of the final bill.

Dorton said only that White's stock ownership was disclosed in accordance with House rules.

Casey stood by his story, though his veracity has been challenged on another subject. In 1998, he was accused by the Securities and Exchange Commission of concealing a loan from his company. He paid back the loan with interest and settled the case without admitting or denying the allegations.

Wilkes declined to be interviewed.

Willis-Leon asked The Times to submit further questions in writing, but had not responded to the queries late Wednesday.

Lewis has repeatedly said he was only dimly aware of Wilkes. He recently said that the last time he could recall meeting with Wilkes was "well over 10 years ago," and he said they never discussed federal contracts.

But records show that Lewis traveled to the Poway, Calif., offices of Wilkes' firm shortly before it received one of its first major government contracts in 1998. He met with executives and got a briefing on the company, ADCS Inc., which was formed a few years earlier and sought government contracts to convert paper records to electronic format.

The trip to ADCS headquarters was uncovered by the Project on Government Oversight, a nonpartisan watchdog organization.

Speaking of the pattern of trips and other favors provided to Lewis by contractors and their lobbyists, Danielle Brian, executive director of the watchdog group, said: "In essence, what we see here is a well-scrubbed quid pro quo. Although this arrangement may be legal, there is no way it is proper. You can't convince me that the public interest is being served."