Jury finds brothers not guilty

Demolition firm owners acquitted in campaign funds case

`Life's work on the line'

Juror says attorneys didn't prove checks to Cummings illegal

September 27, 2000|By Gail Gibson | Gail Gibson,SUN STAFF

A federal jury acquitted two Baltimore County brothers yesterday who were accused of steering illegal campaign donations to Rep. Elijah E. Cummings in a case that had threatened to topple their world-renowned demolition company.

Jurors deliberated less than two hours before clearing J. Mark and Douglas K. Loizeaux of charges that they caused Cummings' campaign treasurer to file false reports in 1996 with the Federal Election Commission. The jury also acquitted the brothers' company, Controlled Demolition Inc.

Douglas Loizeaux clapped his hands when the not-guilty verdicts were read. Outside the courtroom, both brothers called the outcome a vindication and a relief. A conviction on the felony charge could have barred CDI from bidding on government contracts and could have cost the company its federal explosives license.

"Without question, this case has taken a tremendous toll emotionally, not only for us but for our families and for our employees," said Douglas Loizeaux, 50, vice president of the business started by his father in 1948. He said the criminal charges cost the company about $1 million over the past year in lost work and in attorneys' fees.

"It was a life's work on the line," said Mark Loizeaux, 52, CDI's president. "A family's work. Three generations on the line."

Controlled Demolition has obliterated more than 7,000 buildings and structures around the world, from the remains of the Alfred P. Murrah Federal Building in Oklahoma City to the Sands Hotel and Casino in Las Vegas and old missile systems in the former Soviet Union.

In recent years, the Loizeaux brothers have overseen the spectacular explosions that brought down many of the nation's dilapidated public housing projects including Baltimore's Murphy Homes, Lafayette Courts, Lexington Terrace and Broadway Towers.

Federal prosecutors charged that it was with that lucrative government business in mind that the brothers in 1996 decided to support Elijah Cummings in his first run for Congress and encouraged top-level employees to do the same. Cummings, an attorney who had once represented CDI, supported demolishing old, inner-city housing projects as part of a national urban-renewal strategy.

The government contended that Mark and Douglas Loizeaux directed four CDI employees to write $1,000 checks to Cummings' campaign committee in 1996, then reimbursed those workers with company money - a violation of federal campaign rules prohibiting corporate donations.

The brothers were charged with causing the campaign treasurer to file false campaign reports. The government alleged that the men knew their employees were only "straw donors," and not the true source of the contributions.

Defense attorneys argued that the CDI employees who made campaign contributions were not directly reimbursed but merely received bonuses that they could spend as they chose.

In closing arguments yesterday, Assistant U.S. Attorney Kathleen O. Gavin told jurors that the brothers' actions threatened the foundation of the nation's elections system.

"If it is permissible for the heads of a corporation to simply call it a bonus with a wink and a nod," then businesses across the country would do the same, Gavin said. "Corporate money would be buying elections."

First Assistant U.S. Attorney Stephen M. Schenning said of the verdict yesterday: "These cases are complicated, and by nature tend to be more difficult."

Leaving the courthouse, one juror said the decision was relatively simple for the six-man, six-woman jury. "They didn't prove the case," said Claude Stull of Finksburg. Stull said that the jury decided that government attorneys hadn't proved the donations were made with company money and didn't prove that the Loizeaux brothers knew that their actions would lead to a false report.

"I think the fact they reached a verdict in less than two hours - and that included lunch - indicates what they thought of the evidence," said defense attorney Gregg L. Bernstein.

A similar case is pending against another Baltimore demolition expert, Pless B. Jones. In a third case, a Randallstown businessman pleaded guilty to violating campaign finance laws earlier this year for steering money to Cummings' 1996 campaign through staff at ECS Technologies.

Cummings faced no charges and was not a target of the investigation, according to prosecutors.

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