Lobbying Firm in Lewis Scandal Failed to Report $2 Million in Lobby FeesA lobbying firm now at the center of a sprawling congressional corruption investigation failed to report roughly $2 million worth of lobbying fees, according to revised numbers filed by the firm earlier this year.
The probe began last year with the investigation of former Rep. Randy “Duke” Cunningham (R-CA), who later pled guilty to accepting some $2.4 million worth of bribes. This May, the Los Angeles Times reported that investigators had expanded their probe to include House Appropriations Chairman Jerry Lewis (R-CA) and his ties to the lobbying firm Copeland Lowery.
Now a review of the firm’s reporting shows that, just weeks before Copeland Lowery’s status as a target of the investigation became publicly known, the firm filed more than 90 revised disclosures to Congress, alerting officials that they had misreported income from dozens of clients from 1998 to 2005.
Over three-quarters of the corrections disclosed previously unreported income totalling approximately $2 million; others corrected over-reported income of roughly $500,000.
Federal investigators are reportedly looking into the firm’s dealings with Lewis, as well as its ties to accused briber Brent Wilkes, former Rep. Randy “Duke” Cunningham, and at least two of Lewis’ former staffers. Nine of the firm’s clients have confirmed receiving subpoenas from federal prosecutors working on the probe.
Interestingly, while Copeland Lowery’s corrections affected over 40 clients, most of the unreported money came from just a handful of accounts. And those cases showed a pattern of Copeland Lowery reporting little or no money from those clients for years at a time when in fact, according to the revised reports filed in the wake of the investigation, the firm was receiving on average $100,000 from each client annually, and in one case twice that amount.
From these four key clients, Copeland Lowery failed to report …
– at least $260,000 from ADCS, the San Diego-based defense contractor owned by accused briber Wilkes;
– at least $270,000 from the San Diego-based Foundation for the Improvement of Math and Science Education;
– at least $210,000 from the Rochester Institute of Technology;
– at least $210,000 from the South Coast Air Quality Management District (SCAQMD).
Our calls to Wilkes’ lawyer, the Foundation and RIT were not returned. A representative from SCAQMD said the organization had no comment, but that its public records spoke for themselves.
When I first spoke with Copeland Lowery spokesman, Patrick Dorton, he declined to answer questions about the corrections. A half hour later he called back and was more responsive.
“The firm underwent a process of reviewing its [lobby disclosure] reports with the assistance of counsel,” Dorton told me. He declined to say what spurred the comprehensive review, only that the filings “represented a diligent effort to make sure that the reports were accurate.”
When I asked Dorton if he could explain why the firm repeatedly failed to report money it took from certain clients, sometimes for years, he told me, “I don’t have any specific comments on those cases.”
Dorton stressed that the firm believed the filings were for “very common” errors — reporting income in one period when it should have been in another. However, an analysis of the records suggests that no more than roughly $200,000 of the $2 million can be accounted for in this manner.
The spokesman called back a third time, unprompted, to underscore how usual such corrections are. “This is a fairly routine thing,” he told me. “It is a common occurence for firms in town to file. . . amendments.”
Others disagree. “We have never ever seen a case like this,” said Keith Ashdown of Taxpayers for Common Sense. The DC-based watchdog group tracks lobbying and earmarks. “I have never seen a lobby firm in Washigton go through every client and file amendments on dozens of clients they’ve had for the past five years.
“The way it was done,” Ashdown said, “done days before it was first reported Lewis was under investigation — this definitely looks like an effort to cover their legal butts.”
The firm’s lobbyists are in serious legal jeopardy, says Brett Kappel, a Washington, DC lawyer who specializes in money and politics. That’s exactly why, if he was their lawyer, he would advise them to conduct just such a review as they did. ” I would have told them. . . if you haven’t been hit with subpoenas yet you will be, and they’re going to match your financial records against your public reports. And if they don’t match you better fix them. Because it looks a hell of a lot better at sentencing,” Kappel said.
The amount of underreported income is “pretty astonishing,” Kappel told me. He was almost certain that congressional officials would refer the discrepancies to the Justice Department, where they would provide fodder for criminal prosecutions of anyone signing the original disclosure forms. The likely charge — making a false statement, a felony — has been used by prosecutors in recent corruption investigations to win plea bargains.
“Mr. Lowery’s in serious trouble,” Kappel said, referring to Bill Lowery, a firm partner and close friend of Jerry Lewis who signed a number of the erroneous reports.
The existence of the firm’s extensive amended filings was first reported by the New York Times‘ David Kirkpatrick.
Paul Kiel and Ben Craw contributed to this report.
