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Two Democratic Fund-Raisers Charged In Campaign Money Probe

Felony conspiracy charges are first in fund-raising probe; pressure may ease on Attorney General Reno to seek a special prosecutor

By Terry Frieden/CNN


WASHINGTON (May 21) -- The Justice Department today charged Democratic fund-raisers Gene and Nora Lum with a felony conspiracy for a scheme to make about $50,000 in illegal campaign contributions to the 1994 campaigns of Sen. Edward Kennedy and W. Stuart Price, a Democratic nominee for Congress from Oklahoma.

Documents filed in the case indicate the Lums have agreed to plead guilty to the criminal charges. Their daughter Trisha Lum, 27, has also agreed to plead guilty to a misdemeanor violation arising from a separate incident in which she served as an illegal conduit to contribute $10,000 to the Democratic Congressional Campaign Committee.

These are the first charges filed by the Justice Department task force of career prosecutors and FBI agents which last year began probing political fund-raising.

While the case focuses on earlier campaigns, one result could be a reduction in Republican pressure on Attorney General Janet Reno to turn over the probe to an independent prosecutor. But the conservative group Judicial Watch immediately blasted the plea bargain as a "hoax."


At the time of the illegal contributions, Gene and Nora Lum were executives with Dynamic Energy Resources Inc., a natural gas pipeline company in Oklahoma. Trisha Lum was an employee of the U.S. Commerce Department.

Documents filed by the Justice Department show that Lums evaded the Federal Election Campaign Act limits on personal contributions by arranging for numerous "straw" contributors to give money to the Kennedy and Price campaigns.

Trisha Lum was charged separately with knowingly permitting her name to be used for the $10,000 contribution to the Democratic Congressional Campaign Committee. The funds came from her mother.

The charges against Nora and Gene Lum carry maximum penalties of five years in prison and $250,000 fines. Trisha Lum faces a maximum penalty of one year in prison and a $30,000 fine.

The Lums are likely to face much lighter penalties in exchange for their agreement to testify against others as the fund-raising investigation continues. They were allied with fund-raiser John Huang in 1992, so their agreement to testify could put additional pressure on him, too.

The cases are a part of the continuing investigation by the Justice Department Criminal Division's Campaign Financing Task Force, which is looking into campaign fund-raising practices during the 1992-96 federal elections.


The Lums were initially investigated by Independent Counsel Daniel Pearson, who was examining the finances of then-Commerce Secretary Ron Brown. After Brown was killed in a plane crash, Pearson turned the investigation over to the Criminal Division, where the cases became part of the wider probe into allegations of illegal campaign contributions.

Last year, The Associated Press reported that Nora and Gene Lum had given Brown's son Michael thousands of dollars in consulting and shareholder fees, in what the company's former president said was an attempt to buy influence at the Commerce Department.

The Lums got their start in politics in Hawaii in the 1980s. They raised money for the party in 1992, and Nora Lum, 54, was a frequent visitor to the White House.

The Lums' plea bargain drew immediate criticism from Larry Klayman, chairman of the conservative group Judicial Watch.

In a written statement, Klayman said, "The plea agreement negotiated by Janet Reno's Justice Department with Nora, Gene and Trisha Lum is a hoax. It allows two key players in the campaign finance scandal to plead to lesser offenses and effectively concludes a serious investigation that, if taken to a conclusion, could have seriously affected the Clinton Administration's claim that it committed no illegalities in the campaign finance scandal. Nora Lum was a close confidant of Ron Brown and remains close to John Huang. Trisha Lum, her daughter, worked for Brown at the Commerce Department and worked on trade missions."

Klayman said the plea agreements "will now allow Reno to claim she is doing a vigorous investigation of campaign financing, when in reality Judicial Watch's public depositions show she is not. Not even John Huang's secretary has been questioned by Justice investigators; nor has any other Commerce official. Commerce is at the center of the Clinton Administration's illegal fund-raising. In short, the plea agreements are sadly predictable."

Sen. Kennedy's office also issued a statement, saying, "These are very serious charges. There is no justification for anyone to violate campaign fund-raising laws.

"Our campaign was not aware that any of these contributions were improper at the time they were made," Kennedy's statement added. "As we learned that questions were being raised about certain contributions, they were returned immediately."

CNN's Brooks Jackson contributed to this report.

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