IRS looks at Bereano

December 09, 1993|By Frank A. DeFilippo

INVESTIGATORS from the Internal Revenue Service are combing the campaign finance records of past and present members of the General Assembly in an apparent attempt to establish a financial connection between lawmakers and million-dollar-a-year lobbyist Bruce Bereano.

Agents from the IRS's criminal investigation division have requisitioned the records of a dozen winners and losers for seats in the legislature, including the late William S. James, who as Senate president gave Mr. Bereano his start in Annapolis by hiring the young lawyer as his assistant.

Mr. Bereano went on to serve in the same capacity under Mr. James' successor as Senate president, Steny H. Hoyer, now a member of Congress from Maryland's 5th District.

Sources say that the campaign records of as many as 30 legislators are being scrutinized by federal investigators. Dom LaPonzina, the IRS spokesman in Baltimore, declined to comment on the investigation. Mr. Bereano could not be reached.

Among the campaign records being reviewed are those of such heavy-hitters as House Appropriations Committee Chairman Howard "Pete" Rawlings, who received contributions totaling $2,678 directly from Mr. Bereano or through political action committees set up by many of his 60 clients -- including a PAC established by the lobbyist himself, Bereano PAC.

Reports on file at the state Board of Elections show the city lawmaker received contributions from the law firm of Bereano and Resnick, Bereano PAC, GTECH, the Coalition of Black Maryland State Troopers, the Cable TV PAC, the Maryland Troopers Association and multiple contributions from the Maryland Society of Eye Physicians and Surgeons -- all lobbying clients of Mr. Bereano's, according to reports filed with the State Ethics Commission.

A former lawmaker whose records are being studied by the IRS is Tommy Broadwater, of Prince George's County, who received $1,000 through Bereano PAC in his 1990 attempt to return to the Senate after being imprisoned for food stamp fraud. Mr. Bereano represented Mr. Broadwater during the time he was ejected from his Senate seat and sent to jail.

Another former legislator whose financial records have been impounded by the IRS is Nathaniel Oaks, the city delegate who was convicted of double-billing expenses to both the state and his campaign fund. Mr. Oaks received contributions from the law firm of Bereano and Resnick, the Maryland Association of Professional Recruitment Consultants and the Coalition of Black Maryland State Troopers.

What's puzzling about the IRS probe of campaign records is that several of those under scrutiny received no contributions from Mr. Bereano or any of his clients or PACs, according to a review of the state election board files.

In what appears to be a random sampling with no discernible pattern, the list includes James, former Delegates Paul Muldowney and Diane Kirchenbauer; Rosemary Church, a candidate for the House of Delegates from Anne Arundel County; Del. John A. Hurson, of Montgomery County; and Ellery Woodworth, a candidate for the House from Baltimore County.

There have been rumors for months that Mr. Bereano has been under investigation by federal authorities, who are interested in his role in the award of the multi-million-dollar Maryland Lottery computer contract to GTECH, the Rhode Island firm he lists among his clients and co-represents with former Gov. Marvin Mandel. And it's only recently that his campaign contribution and fundraising activities have also caught the attention of federal investigators.

Mr. Bereano is the most financially successful lobbyist in Annapolis, the first to break the million-dollar barrier. His roster has included as many as 63 clients, and his financial reports to the state Ethics Commission regularly reach $1 million in fees, about triple the earnings of his closest competitor.

He is also the most flamboyant lobbyist in the capital, and he became so by defying the unspoken rules and conventions of lobbying. He sponsors lavish parties for legislators, sends boxes of cigars to his favorite secretaries on Valentine's Day. He even once persuaded the rock musician Frank Zappa, who died a few days ago, to come to Annapolis to testify in behalf of one of his clients, the Recording Industry Association of America.

Mr. Bereano learned early in his career that the common denominator of government and politics is money in motion. Nowhere is Mr. Bereano's energy and extravagance more visible than in fundraising. He has raised and contributed hundreds of thousands of dollars over the years for federal as well as state candidates through the purchase and sale of tickets to fundraisers and fundraising events at his waterfront home in Annapolis, controlling political action committees and distributing contributions on behalf of his clients.

It was Mr. Bereano's ability to disburse large sums of money into campaigns -- and the political influence and control that comes with it -- that provoked the General Assembly two years ago to adopt reforms limiting the financial activities of lobbyists.

Legislators adopted a law prohibiting lobbyists from establishing political action committees, thus eliminating Bereano PAC. They also enacted legislation that prohibits lobbyists from serving on PACs, from soliciting contributions for a member of the General Assembly and from transmitting money to members of the General Assembly.

In a sense, it was the influence Mr. Bereano was able to buy and peddle that eventually cost him some of his influence.

Frank A. DeFilippo writes a column here on Maryland politics.

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