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US: Investigation exposes dots connecting Lewis, Lowery

Local agencies, businesses subpoenaed for documents relating to California Republican

by George WatsonInland Valley Daily Bulletin
June 11th, 2006

Jerry Lewis is a man embattled.

In nearly 40 years of public service, he has risen from humble roots on the school board of San Bernardino to become one of the most powerful members of the United States House of Representatives - chairman of the Appropriations Committee, which oversees nearly $900 billion in federal funding.

He touts his successes in developing federal clean-air standards, crafting crime and drug legislation and securing emergency funding for disaster relief for California.

Closer to home, he counts the establishment of a high-tech cancer center at Loma Linda University Medical Center, the expansion of Ontario International Airport and the ongoing redevelopment of the former Norton Air Force Base as key achievements.

Now he is in trouble. In recent weeks, the Redlands Republican has emerged at the center of a Department of Justice investigation that has already banished one congressman to prison for accepting $2.4 million in bribes.

The Department of Justice and the FBI are investigating his relationship with powerful Washington lobbyist Bill Lowery, a former congressman and longtime friend of Lewis.

Investigators have subpoenaed financial documents related to Lowery's firm, Copeland Lowery Jacquez Denton & White, and to Lewis from at least a half-dozen local agencies, including the counties of San Bernardino and Riverside, Cal State San Bernardino and the cities of Redlands, Loma Linda, Twentynine Palms and Yucca Valley.

San Bernardino's city attorney says the city can neither confirm nor deny whether it has received a subpoena.

While Lewis, who declined through a spokesman to be interviewed for this story, has repeatedly denied any wrongdoing, the investigation has brought him under intense media scrutiny.

In recent weeks, print and broadcast journalists from around the country have zeroed in on Lewis and Lowery as well as their associates and families.

Every day brings another story, a new revelation or allegation.

None of them are positive.

The Cunningham connection


The investigation into Lewis and Lowery stems from a federal probe of former Rep. Randy "Duke'' Cunningham, R-Escondido, who was sentenced to eight years in prison in November after admitting he accepted more than $2.4 million in bribes from businessmen seeking federal contracts.

Brent Wilkes, an unindicted co-conspirator in the Cunningham case, was a client of Lowery's firm and a contributor to Lewis' campaign.

Wilkes also worked for a former defense contractor who told NBC news last week that he had been interviewed by federal investigators and that he told them Lewis had asked him to hire Lowery's firm and give stock options to Lowery under a false name when the contractor was seeking a federal contract to digitize documents in 1993.

Tom Casey, who owned the now-defunct Audre Recognition Systems Inc., claimed that Lewis aide Letitia White, who is now a partner in Lowery's firm, allowed him to write the text of an appropriation earmark.

In a television interview, Casey acknowledged he had no proof Lewis did anything illegal and said he never issued the stock options.

Dirk Holland, a former employee of Casey's, said last week that Casey had asked employees to make contributions to elected officials and later reimbursed them.

"If I was the federal government, I'd be investigating him,'' Holland said of Casey last week. "I worked with him six years. He used to encourage employees to make campaign contributions, and the company refunded them. That's illegal.'' Casey could not be reached for comment for this story.

Campaign contributions from Casey and his associates at Audre Inc. to members of the Defense Appropriations Subcommittee included $5,000 to Lewis in 1993-94 and $4,000 to Rep. John P. Murtha, D-Pa., the panel's chairman at the time.

Lewis spokesman Jim Specht denied Casey's claims Lewis had asked Casey to hire Lowery and offer the stock options.

"It's absolutely something that the chairman would never do,'' Specht said.

As for Wilkes, Lewis has said repeatedly in recent weeks that he barely knows him and hasn't met personally with him in more than 10 years.

After working at Audre, Wilkes went on to form ADCS, a defense firm.

An investigation by the Project on Government Oversight showed that Lewis traveled with his wife to ADCS on Jan. 13, 1998.

Lewis met with executives, was briefed on the company and toured its facility. The visit came shortly before ADCS received its first major government contract.

Lewis signed his name on the Congressional travel disclosure form on Feb. 4, 1998, according to a document provided by the nonprofit watchdog group.

Specht said the congressman has no recollection of the trip and that Lewis visited with several contractors at that time.

Specht did, however, acknowledge that Wilkes was part of the trip to Belize that was arranged by Lowery and attended by Lewis, the chairman of Rawlings Sporting Goods, and George Gorton, a political aide for then-California Gov. Pete Wilson, among others. In addition to delivering the sporting goods, the group met with the Belize president and scuba dived in the famed waters off of the country's eastern coast.

"The chairman remembers talking to Gorton and Lowery but doesn't remember conversations with Wilkes,'' Specht said.

Since 1990, Wilkes has given at least $60,000 to Lewis' campaign and has paid Copeland Lowery at least $160,000 in lobbying fees.

The revolving door

Two Lewis staffers who work now or have worked for Copeland Lowery have also come under scrutiny.

Letitia White remained on Lewis' staff until 2003, when she joined Lowery's firm.

White is credited with landing Trident Systems Inc. as a client of Copeland Lowery shortly after she was hired.

Less than a year later, White and Trident President Nicholas Karangelen bought a $1 million town house in Washington, D.C., with Karangelen paying for White's half of the ownership.

Trident has received at least $12.2 million via five federal contracts since 2002, said Keith Ashdown of Taxpayers for Common Sense, a nonpartisan organization that keeps tabs on the labyrinthine earmark system. Millions more in small business grants have been given to Trident.

Another Lewis staffer, Jeff Shockey, left Lewis' office in 1999 to work for Copeland Lowery.

Shockey was an effective lobbyist, rounding up many agencies and municipalities across the Inland Empire. In 2004, records show, he brought in $1.7 million in revenues. The next year, before leaving Copeland Lowery, his projected total leaped to $3 million, a hefty increase for most lobbyists in one year.

That was the same time that speculation mounted that Lewis could become the next chairman of the House Appropriations Committee.

Shockey left Copeland Lowery early last year to rejoin Lewis' staff, where he earns more than $150,000 as deputy staff director for the Appropriations Committee.

Since leaving Copeland Lowery, Shockey has received more than $1.9 million from the firm as part of a buyout.

Shockey's lawyers, speaking on condition of anonymity Friday, said he chose to make less money working for Lewis out of duty to Lewis and his country.

The attorneys said Shockey hired a law firm to ensure he followed ethical standards that required him to divest himself of his 26 percent ownership in Copeland Lowery.

When asked whether Shockey had been contacted by the U.S. Attorney General's Office, his lawyers at first declined to comment and then said they knew of none.

The lawyers also acknowledged that Shockey's wife, Alexandra, has started a lobbying firm and is renting office space from Copeland Lowery. They added that he and his wife have agreed that she will not approach him on any official business, and his lawyers submitted a letter to the House Committee on Standards of Official Conduct stating exactly that.

Specht added that Alexandra Shockey, who is herself a former Lewis staffer, is subcontracting work for Copeland Lowery.

As part of her contract with Copeland Lowery, Specht said, Alexandra Shockey has taken over several, if not all, of her husband's Inland Empire clients.

A family tie

And then there is the Small Biz Tech Political Action Committee.

The PAC was founded early last year - about the same time Lewis became chairman of the Appropriations Committee.

Its director is Julia Willis-Leon, Lewis' stepdaughter.

The PAC has paid Willis-Leon about $42,000, which is about one-third of the $115,000 Small Biz Tech has received in political contributions since its creation.

That's almost three times the $15,000 the PAC has contributed to political candidates and other political fundraising committees.

Willis-Leon lives in Las Vegas, where she apparently, if only occasionally, based on fundraising documents, lobbies Washington, D.C., dealmakers. It's a fact that Ashdown of Taxpayers for Common Sense finds troubling.

Although there are a handful of firms that lobby the federal government based outside of Washington, D.C., it's rare for a PAC director to live outside of the nation's capital, he said. The PAC's business address, however, is a town house in Washington, D.C. - the town house that White and Karangelen bought together in 2003.

White and Karangelen also are major contributors to the PAC, each having given $10,000 in the past year.

"It seems to be a fake PAC,'' Ashdown said.

Willis-Leon could not be reached for comment.

Specht said Lewis had no comment on the matter.

Ashdown speculated that the congressman must know about his stepdaughter's involvement with the PAC.

It's impossible to know what role, if any, Lewis had in the PAC's creation, Ashdown said. At the same time, it's difficult to believe Lewis did not know that his stepdaughter directed a PAC that worked with small defense-oriented businesses, he added.

"You would assume he would know about it,'' Ashdown said. "He should have said something, or done something, out of respect for his office and the committee he chairs.''

CONNECTIONS


The FBI and the Department of Justice are investigating ties between Rep. Jerry Lewis, R-Redlands, and Washington lobbyist Bill Lowery, a former San Diego congressman.

Lewis and Lowery

- Lewis and Lowery served on the House appropriations committee together from 1985 to 1993. The two are said to be longtime friends.

- Lowery's firm, Copeland Lowery Jacquez Denton & White, and its clients have contributed more than a third of the $1.3 million raised by Lewis' political action committee since 2000.

- Lowery's clients have received hundreds of millions of dollars in federal funding and contracts.

- Former Lewis aide Letitia H. White left the congressman's staff in 2003 and is now a partner in Lowery's firm. She has acknowledged that Nicholas Karangelen, founder and president of Trident Systems Inc., paid $500,000 for her toward the purchase of a $1 million Washington, D.C., townhouse, which they purchased together. They made the purchase 11 months after she left her congressional job. White was in charge of inserting earmarks into spending bills for Lewis when he led the House defense appropriations subcommittee. She has said through a spokesperson that the purchase was a private transaction between close friends.

- Karangelen, whose firm Trident Systems has received $11.7 million in federal earmarks and contracts, is also president of the Small Biz Tech Political Action Committee, which paid more than $42,000 to Lewis' stepdaughter, Julia Willis-Leon.

- Lewis staffer Jeff Shockey went to work for Lowery in 1999. He returned to Lewis' staff last year, when Lewis became chairman of the House Appropriations Committee. In his new role as deputy staff director for the appropriations committee, Shockey is paid $170,000 a year. At the same time, he has received $1.9 million in severance pay from Copeland Lowery.

The Investigation

- The investigation into the ties between Lewis and Lowery stems from a probe of disgraced Rep. Randy "Duke'' Cunningham, who was sentenced to eight years in prison in November after admitting he accepted more than $2.4 million in bribes from businessmen seeking congressional earmarks.

- Brent Wilkes, an unindicted co-conspirator in the Cunningham case, worked for former defense contractor Tom Casey in the early 1990s. He has also been a major contributor to Lewis' campaign.

- Casey told NBC News last week that when he was seeking a federal contract in 1993, Lewis asked him to hire Lowery as a lobbyist and to arrange stock options for Lowery, issuing them in Canada in someone else's name. Casey says he never did it and has no proof that he was asked.

- Federal investigators have subpoenaed financial documents related to Lewis and Lowery from the firm's clients, which include the counties of San Bernardino and Riverside and the cities of Redlands, Loma Linda, Twentynine Palms and Yucca Valley.

- No charges have been filed against Lewis, and he has denied any wrongdoing.





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