U.S. case alleges `straw donors'

Businessman accused of funneling money illegally to Cummings

May 03, 2000|By Gail Gibson and David Folkenflik | Gail Gibson and David Folkenflik,SUN STAFF

A Randallstown businessman illegally funneled $10,000 to Rep. Elijah E. Cummings' 1996 election effort by having employees at ECS Technologies Inc. write personal checks to the campaign, then reimbursing them with company money, federal prosecutors say.

Charges against Walter Wallace E. Hill Jr. mark the third federal case this year involving allegations of improper campaign contributions to Cummings, a Baltimore Democrat. In separate cases, Mark and Douglas Loizeaux, who run a Baltimore County demolition company, and Baltimore demolition expert Pless B. Jones also face federal charges of masking illegal donations to Cummings' 1996 and 1998 campaigns.

Hill is charged with violating federal election laws that prohibit disguised contributions and limit contributions from individuals to $1,000 for a primary election and $1,000 for a general election. He could not be reached yesterday to comment.

None of the employees named as allegedly involved face charges. Nor does Cummings, who has served in Congress since 1996. Federal prosecutors have previously said that the congressman was not a target of the investigation.

"To the best of my knowledge, neither Congressman Cummings or anyone in the campaign had any knowledge that anything was wrong, if in fact anything was wrong," said spokesman Michael Christianson, who has worked with Cummings since the 1996 campaign.

Hill is identified in court papers as a vice president with ECS Technologies of Baltimore. The computer hardware and service company was also named in the federal suit, filed Monday in U.S. District Court in Baltimore. ECS did not answer calls to comment.

Based on Canton Center Drive in Baltimore, ECS had hundreds of thousands of dollars worth of contracts with the federal government, primarily in the military, in 1997, according to federal contract records.

Hill was charged under a criminal information, instead of a federal indictment, which means that his case did not go before a grand jury and often suggests that a defendant is negotiating a plea agreement with prosecutors.

Stephen M. Schenning, first assistant U.S. attorney, said he could not comment on the case.

Court papers describe a scheme in which money was steered to Cummings' campaign using ECS employees who were political donors in name only.

Advocates for overhauling campaign finance laws argue that such "straw donor" schemes are frequently used to circumvent federal election laws and illustrate why reforms are needed.

In Hill's case, between Dec. 29, 1995, and Jan. 2, 1996, 10 ECS employees wrote $1,000 checks to "Cummings for Congress" at Hill's request and were then reimbursed from ECS' corporate accounts, according to court papers. Hill also made a $1,000 donation to the campaign Dec. 12, 1995, election records show.

Cummings, who had served in the General Assembly since 1983, spent more than $436,000 for the race in 1996, mostly before the primary.

By comparison, his closest Democratic competitor, the Rev. Frank M. Reid III of Bethel African Methodist Episcopal Church, raised and spent about $255,000.

Cummings won the primary, and he easily won the special general election in April 1996, with 81 percent of the vote. Cummings, who serves on the House transportation and government reform committees, has not been seriously challenged since.

Christianson, Cummings' aide, said yesterday the campaign took pains to explain election laws to donors. He said that he didn't recognize Hill's name.

The two other cases involving campaign contributions to Cummings are pending in U.S. District Court in Baltimore.

Sun staff writer Walter F. Roche Jr. contributed to this article.

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