Demolition firm's influence case in hands of federal jury

September 26, 2000|By Gail Gibson | Gail Gibson,SUN STAFF

A federal jury will begin considering charges today that the nation's leading demolition business and the two brothers who operate it steered illegal contributions to Rep. Elijah E. Cummings' 1996 campaign for Congress.

The jury's verdict could have a dramatic effect on Controlled Demolition Inc. and brothers J. Mark and Douglas K. Loizeaux, the company's president and vice president, respectively. If convicted, the Baltimore County company could be barred from seeking lucrative government contracts and could lose the federal explosives license that allows it to operate.

During closing arguments yesterday in U.S. District Court in Baltimore, defense attorneys said Mark and Doug Loizeaux would not have jeopardized their three-generation family business - responsible for demolishing everything from Baltimore's worst public housing high-rises to Seattle's Kingdome - over $4,000 in campaign contributions.

"They have the most successful implosion business in the world," defense attorney Gregg L. Bernstein told jurors. "Why would they risk all that?"

Federal prosecutors argued the brothers were seeking to gain advantage with a politician they believed could help business by advocating for demolishing aging public housing high-rises across the country.

"They wanted to curry influence. They wanted to make contributions. ... But they weren't going to be deterred by the limits of the Federal Election Campaign Act," Assistant U.S. Attorney P. Michael Cunningham said in closing arguments.

The Loizeaux brothers and their company are not charged with direct violations of campaign-finance law, which are misdemeanor offenses. Instead, they are accused of causing false statements to be made to the federal government - in this case, the Federal Election Commission - a felony.

In testimony lasting six days during the two-week trial, prosecutors sought to show that the brothers skirted election rules against corporate contributions by having four CDI employees write $1,000 personal checks to Cummings' 1996 campaign, then reimbursing them with company money.

A similar case is pending against another Baltimore demolition expert, Pless B. Jones. Cummings, a third-term congressman from Baltimore, faces no charges and was not called as a witness in the Loizeaux case.

Prosecutors argued that the Loizeaux brothers knew their employees were only "straw donors" and that their corporation was the true source of the contributions. By disguising that information, prosecutors argued, the brothers caused Cummings' campaign treasurer to file false contributor reports with the FEC.

In one case, an employee didn't have $1,000 in his banking account to cover the campaign contribution until he received a check in the same amount from CDI.

"These people were pawns in Mark and Doug Loizeaux's scheme to perpetrate this fraud," Cunningham said.

Defense attorneys yesterday rested their case without presenting any witnesses. They said Mark and Doug Loizeaux acknowledge giving $1,000 bonuses to the four employees who made the campaign contributions. But the employees always were free to spend the money on whatever they wanted, the attorneys said.

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