Longtime GOP activist Lake is prosecutor's surprise target Lobbyist to plead guilty to counts tied to political donations to Espy kin

October 24, 1995|By Carl M. Cannon | Carl M. Cannon,SUN NATIONAL STAFF

WASHINGTON -- A special prosecutor delving into the Clinton administration's relationship with agribusiness issued criminal charges yesterday, but his target was a surprise: James Lake, longtime Republican Party activist, campaign official and lobbyist.

Mr. Lake, a Californian with close ties to Ronald Reagan, said he will plead guilty tomorrow to charges stemming from making illegal campaign contributions to the brother of former Clinton administration Secretary of Agriculture Mike Espy.

Mr. Lake is a founding partner of the lobbying firm of Robinson Lake Sawyer Miller, a firm from which he has now resigned. He served as communications director for both of Mr. Reagan's successful presidential campaigns, deputy campaign manager in George Bush's 1992 re-election campaign and has been a top GOP official at the last four Republican conventions.

'I'm sorry'

"I'm sorry that I violated the law," Mr. Lake said yesterday. "I'm sorry I violated my firm's -- and my own -- standards. I do take comfort in the fact that my firm is being protected because of my willingness to plead guilty to these serious charges."

The case against Mr. Lake is that he made illegal contributions to the failed 1993 congressional campaign of Henry Espy, the brother of Mike Espy, who left President Clinton's Cabinet after the current probe into Mr. Espy' finances began.

Mr. Lake was charged by independent counsel Donald C. Smaltz with three charges, two misdemeanor counts of campaign finance violations and a third, more serious felony charge of wire fraud, when he tried to hide the source of those campaign contributions by billing his home office in Omaha, Neb., by fax modem.

It was reminiscent of a case decided in Maryland last November when powerhouse Annapolis lobbyist Bruce C. Bereano was convicted in federal court of fraudulently billing clients more than $16,000 to make illegal campaign contributions that were channeled through employees of his law firm, family members and his own political action committee.

Plea bargain possible

The felony count against Mr. Lake carries a maximum punishment of five years in prison and a fine of $250,000, but a cooperative defendant typically receives more lenient treatment.

The filing in U.S. District Court of an indictment in the Lake form of a criminal information indicates that a plea bargain is in the works. Yesterday, both Mr. Lake and Plato Cacheris, Mr. Lake's attorney, confirmed that Mr. Lake is cooperating with the probe being conducted by Mr. Smaltz -- and will plead guilty tomorrow afternoon. It is not known if, or when, Mr. Smaltz will make other charges or issue a report on Mr. Espy.

Popular political operative

In Mr. Lake, Mr. Smaltz is going after one of the most popular political operatives around town. Friendly and easy-going, he is a favorite of reporters -- and has good relations with Democrats as well as Republicans. White House press secretary Mike McCurry worked at Robinson Lake until joining the Clinton administration.

In fact, it was helping raise money for a Democrat -- Mr. Espy's brother -- that placed Mr. Lake in the sights of the special prosecutor. According to the information filed in court, Mr. Lake was active in the campaign to retire the debt of $180,000 left over from Henry Espy's unsuccessful attempt in Mississippi to succeed his brother after Mike Espy was named agriculture secretary.

As part of that effort, according to the case developed by Mr. Smaltz, Mr. Lake leaned on several associates at Robinson Lake to make contributions. He then reimbursed them with money that sources said he then billed to a client, Sun-Diamond growers, a California agribusiness company with pending business before the Department of Agriculture.

Investigation began in 1994

Mr. Smaltz's investigation began in August of 1994 after allegations surfaced that Mr. Espy had accepted some $7,500 worth of plane rides, hotel rooms and tickets to sporting events from corporations regulated by the Department of Agriculture, including Tyson Foods Inc., the world's largest poultry processor.

Mr. Espy was pressured to resign after the White House learned that Mr. Espy's girlfriend, Patricia Dempsey, had received a $1,200 scholarship from Tyson, an Arkansas company with close ties to Mr. Clinton.

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