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Deal Maker Details the Art of Greasing the Palm

by : Dela Nytimes
Monday August 7, 2006 - 00:59

WASHINGTON - In 1992, Brent R. Wilkes rented a suite at the Hyatt Hotel a few blocks from the Capitol. In his briefcase was a stack of envelopes for a half-dozen congressmen, each packet containing up to $10,000 in checks.

Mr. Wilkes had set up separate meetings with the lawmakers hoping to win a government contract, and he planned to punctuate each pitch with a campaign donation. But his hometown congressman, Representative Bill Lowery of San Diego, a Republican, told him that presenting the checks during the sessions was not how things were done, Mr. Wilkes recalled.

Instead, Mr. Wilkes said, Mr. Lowery taught him the right way to do it: hand over the envelope in the hallway outside the suite, at least a few feet away.

That was the beginning of a career built on what Mr. Wilkes calls “transactional lobbying,” which made him a rich man but also landed him in the middle of a criminal investigation.

Last November, Mr. Wilkes was described as “co-conspirator No. 1” in a plea agreement signed by Representative Randy Cunningham, a California Republican on the House Appropriations Committee. In the plea deal, Mr. Cunningham admitted accepting more than $2.4 million in cash and gifts from Mr. Wilkes and other contractors. Another defense contractor, Mitchell J. Wade, pleaded guilty to paying some of the bribes.

Mr. Wilkes could also figure in a related federal investigation into the House Appropriations Committee. The inquiry has focused on ties between Mr. Lowery, who left Congress and became a lobbyist, and Representative Jerry Lewis, a California Republican who is the chairman of the committee and the former chairman of its Defense Subcommittee.

Speaking publicly for the first time since Mr. Cunningham’s plea agreement, Mr. Wilkes said in recent interviews that he had done nothing wrong and did not believe that Mr. Lewis and Mr. Lowery had broken the law. Mr. Wilkes, who has not been charged in the Cunningham case, has refused prosecutors’ appeals to plead guilty.

But Mr. Wilkes acknowledged that he was a willing participant in what he characterized as a “cutthroat” system in which campaign contributions were a prerequisite for federal contracts. “I attempted to get help and advice from people who could show me the way to do it right,” Mr. Wilkes said. “I played by their rules, and I played to win.”

Mr. Wilkes said he was speaking now to rebut false assertions about him by prosecutors and the news media. While it is unknown whether his account is complete and it is impossible to verify his recollections of certain conversations, many aspects of his story were confirmed by federal records, other documents and interviews with people involved in the events he described.

The Cunningham scandal set off alarms about the proliferation of Congressional earmarks - money for pet projects inserted anonymously in spending bills - which critics say pervert public policy, encourage cronyism and waste federal money. The 12,000 earmarks in this year’s spending bills amount to $64 billion.

Offering a rare insider’s view, Mr. Wilkes described the appropriations process as little more than a shakedown. He said that lobbyists close to the committee members unceasingly demanded campaign contributions from entrepreneurs like him. Mr. Wilkes and his associates have given more than $706,000 to federal campaigns since 1997, according to public records, and he said he had brought in more as a fund-raiser. Since 2000, Mr. Wilkes’s principal company has received about $100 million in federal contracts.

Mr. Wilkes described the system bluntly: “Lowery would always say, ‘It is a two-part deal,’ ” he recalled. “ ‘Jerry will make the request. Jerry will carry the vote. Jerry will have plenty of time for this. If you don’t want to make the contributions, chair the fund-raising event, you will get left behind.’ ”

Lanny A. Breuer, a lawyer for Mr. Lowery, acknowledged that his client had been a lobbyist for Mr. Wilkes. But he said Mr. Wilkes’s portrait of their dealings was “an absolute fabrication.”

“Bill Lowery never demanded lobbying fees in return for any kind of a guarantee of an earmark,” Mr. Breuer said. “He never demanded contributions to Jerry Lewis. There was absolutely no quid pro quo.”

Barbara Comstock, a spokeswoman for Mr. Lewis, said the congressman was unaware of any conversations like those Mr. Wilkes described having with Mr. Lowery.

Contractors who do business with the federal government routinely contribute to the campaigns of Congressional appropriators, and politicians frequently assist constituents in their efforts to win government contracts. But legal experts say that explicitly linking official acts to campaign contributions could constitute a criminal offense, including bribery or extortion. They caution that proving criminal intent is difficult.

The culture of the House Appropriations Defense Subcommittee is one of great power and little scrutiny. Mr. Wilkes said every member appeared to have a personal allowance of millions of dollars to disburse without public disclosure. Lawmakers, though, sometimes boast about money being spent in their districts.

In the spending bill for this fiscal year, each member took credit for an average $27 million in earmarks, with the chairman, Representative C. W. Bill Young, Republican of Florida, claiming about $125 million, according to Taxpayers for Common Sense, a nonpartisan group that tracks earmarks.

‘Feast or Famine’

When Mr. Lowery became a lobbyist, he set himself up as a gatekeeper to his old friend, Mr. Lewis, the appropriations chairman, Mr. Wilkes said. At times, Mr. Lowery hinted ominously that Mr. Lewis might block future earmarks if Mr. Wilkes stopped making campaign donations and paying Mr. Lowery’s fees, Mr. Wilkes said.

In recent months, Mr. Lewis has said that he barely knew Mr. Wilkes and that he did not remember seeing him in nearly a decade. But Mr. Wilkes says their relationship was closer than that.

Ever since they went on a scuba-diving trip together in 1993, he said, Mr. Lewis had referred to him as his “diving buddy.” They occasionally dined together or met at political functions, Mr. Wilkes said. At a Las Vegas fund-raiser in April 2005, Mr. Wilkes said, Mr. Lewis greeted him as “Brento” and hugged him as Mr. Wilkes surprised the lawmaker with $25,000 in campaign contributions.

At his peak, Mr. Wilkes controlled a dozen companies whose work included digital document storage. The federal government was his chief customer, and he spent up to 30 weeks a year in Washington courting congressmen and agency procurement officials.

Mr. Wilkes capitalized on the system. The license plate on his black Hummer still reads “MIPR ME,” a reference to a “military interdepartmental purchase request” - bureaucratic jargon for payments for a defense contract.

Mr. Wilkes built a headquarters of smoked glass and stainless steel outside San Diego with a 450-seat banquet hall, where Cirque du Soleil performed at a birthday party for his wife, Regina. He crossed the country in private jets and raised hundreds of thousands of dollars for the Bush-Cheney ticket in 2004, making him a Republican “Pioneer.”

Nancy Luque, his lawyer, said the image of Mr. Wilkes as a swaggering deal maker was a caricature. “He had his life in Washington and then his real life,” Ms. Luque said. “His real life was his family, his friends and his business.”

His success, though, depended on government contracts. “It’s a feast or famine deal,” Mr. Wilkes said. “If we didn’t get our earmark, we were finished.”

Washington Connections

A former accountant in Washington and San Diego, Mr. Wilkes had known Mr. Lowery casually for years in California Republican circles. Because of those ties, a San Diego businessman hired Mr. Wilkes as a consultant in 1992 to help persuade Congress to earmark contracts for his company, Audre, which was seeking to convert military documents into digital form.

Mr. Lowery, in his final months in Congress, was looking for new opportunities as well. He had decided to resign after a 1992 inquiry into the misuse of an internal House bank found that he had written more than 300 bad checks.

Mr. Wilkes said Mr. Lowery set up meetings for him with a handful of House Defense Subcommittee members, including Representative John P. Murtha, a Pennsylvania Democrat who was the chairman at the time, and Mr. Lewis. Mr. Lowery instructed Mr. Wilkes to go to the sessions prepared.

“Lowery says, ‘We should raise money; you get the checks,’ ” Mr. Wilkes recalled, describing the meetings at the Hyatt. “I was a rookie. I didn’t want to separate the checks from the briefing,” he said, explaining that he did not understand the need to avoid appearing to link the money to his pitch.

Although they welcomed the checks, Mr. Wilkes said, the lawmakers seemed bored by a lengthy presentation. “I became the king of the 10-minute meeting,” he said.

Later that year, Mr. Wilkes and Mr. Lowery took a diving trip to Belize, where they visited the United States ambassador. Eugene Scassa, then the envoy, said in an interview that Mr. Lowery had quizzed him about his out-of-pocket expenses and then suggested, “You need a chuck wagon.”

Mr. Scassa said Mr. Lowery pointed to Mr. Wilkes and explained: “He is a chuck wagon. If you have expenses, they pay. If you go out to lunch, they pay. If you need a pair of boots, you go out to the chuck wagon to get them.” (The next year, Mr. Lowery and Mr. Wilkes returned for a diving trip with Mr. Lewis.)

When Mr. Lowery left Congress in January 1993, Mr. Wilkes hired him to lobby for Audre. Mr. Wilkes was impressed by Mr. Lowery’s knowledge of the Defense Subcommittee and his confidence in being able to help deliver an earmark.

Mr. Lowery and Mr. Lewis seemed “like brothers,” Mr. Wilkes said. “These guys ate dinner together a hundred times a year.”

Mr. Wilkes and Audre executives gave members of the Appropriations Committee about $54,000 in campaign donations from 1992 to 1994. The Defense Subcommittee earmarked $14 million for Audre in 1993 and $20 million in 1994.

Mr. Wilkes said that at his suggestion, several recipients of his campaign contributions - Mr. Lewis; Mr. Cunningham; Representative Charlie Wilson, Democrat of Texas; and Representative Duncan Hunter, Republican of California - wrote a letter to top defense officials supporting the expenditures. Mr. Lewis wrote a second letter to an admiral.

In December 1994, Mr. Wilkes set up his own company, ADCS, and continued to use Mr. Lowery’s services. Later, the lobbyist got Mr. Wilkes invited to a party at Mr. Lewis’s town house. The purpose was to help pay the legal bills of former Representative Joseph M. McDade, a Pennsylvania Republican charged with bribery in awarding earmarks. (He was acquitted in 1996.) Many members of the Appropriations Committee and many prominent lobbyists, Democrat and Republican, were there.

“The set of rules that Lowery was teaching me was obviously the right set of rules,” Mr. Wilkes recalled thinking. “If I wasn’t playing the game the way they wanted me to, I never would have been there.”

During his Washington visits, Mr. Wilkes held poker games at the Watergate Hotel, in a suite stocked with beer, Scotch and cigars. He invited several congressmen, colleagues and intelligence officials. Among the occasional guests was Kyle Foggo, the chief administrative officer of the Central Intelligence Agency and a childhood friend of Mr. Wilkes.

Federal prosecutors in San Diego are investigating whether Mr. Foggo, who resigned in May after coming under scrutiny, accepted vacation travel expenses from Mr. Wilkes in exchange for a classified agency supply contract, lawyers involved in the case said.

Ms. Luque, Mr. Wilkes’s lawyer, said, “My client did not give his best friend of over 40 years anything because of any position he may have held.” Mr. Foggo’s lawyer, Mark J. MacDougall, said his client had done nothing unlawful.

Former colleagues say Mr. Wilkes was frank about his view of the appropriations process in Washington. “He was just on a power trip,” said Steve Caira, the former chief executive of a company that sometimes collaborated with Mr. Wilkes. “You would be at a party, and he would come out and say he paid this guy so-and-so, if you throw enough money at him you will get your share back,” Mr. Caira recalled. Mr. Wilkes denied making those comments.

In Mr. Cunningham’s guilty plea, prosecutors portrayed the lawmaker as eager to help Mr. Wilkes. In court documents, they say Mr. Wilkes made cash payments of more than $500,000 to Mr. Cunningham, who intervened to help him earn earmarks and pressed a Defense Department official for faster payment of an inflated invoice. Mr. Cunningham was sentenced to eight years and four months in prison.

Mr. Wilkes said that in recent years, he preferred to work with other Appropriations Committee members. In 1998, records show, he turned to Mr. Lewis for help with the Veterans Affairs administration. Mr. Wilkes was then a subcontractor on a project paid through the Department of Veterans Affairs, and he wanted to take over as the primary contractor. In February 1999, he met with Jeffrey Shockey, a Lewis aide, to ask the congressman’s office to intervene, according to a follow-up letter by Mr. Wilkes that was obtained by The New York Times.

When a Veterans Affairs accounting officer complained about questions from a congressman on ADCS’s behalf, a Wilkes aide, Mike Williams, wrote back that Mr. Lewis was “a close personal friend of Brent’s.” The letter offered to “have the congressman’s office contact the V.A. to put this issue to rest.”

Sometimes, Mr. Wilkes said, lobbyists offered him an earmark if he could come up with a project. In 2004, he said, Edwin A. Buckham, another lobbyist for Mr. Wilkes, reported that the House Appropriations Committee wanted to make a “going-away gift” in the form of an earmark to Representative George Nethercutt, Republican of Washington, who was leaving his seat on the panel to run for the Senate.

Mr. Wilkes suggested a shipboard communications project in Washington State and got $1 million for it. Mr. Nethercutt said he thought the technology was promising.

As he grew more confident, Mr. Wilkes said, he often considered dropping Mr. Lowery, whose fees had escalated to $25,000 a month by 2005, from $2,500. But Mr. Wilkes said Mr. Lowery threatened to block future projects if their relationship ended. Mr. Wilkes said Mr. Lowery had warned several times that doing so could prompt Mr. Lewis to cut off earmarks, saying, “You don’t want me telling those guys on the committee that you are moving on without me.” That meant, Mr. Wilkes said, “I’d be out of business.”

Mr. Breuer, Mr. Lowery’s lawyer, said Mr. Lowery did not make any such threats and called the account “pure fantasy.” He pointed out that in the late 1990’s the two men severed their relationship for a few years, but that Mr. Wilkes retained Mr. Lowery again in 2002.

Business in Jeopardy

In the end, it was the Cunningham investigation that jeopardized Mr. Wilkes’s business with the government. In August 2005, a team of F.B.I. agents swept through Mr. Wilkes’s headquarters. The flow of earmarks, his companies’ lifeblood, dried up. He laid off 200 employees.

Ms. Luque said her client’s legal problems were a battle that he “will fight and win.”

She said federal prosecutors told her in January that they were not interested in Mr. Wilkes’s dealings with Mr. Lowery and Mr. Lewis. “Cunningham couldn’t have followed through on what he did without the cooperation of other people on the committee,” Ms. Luque said. Prosecutors should be looking at the entire committee, she said.

Sitting in his office recently, the shelves lined with photographs of himself with President Bush, Vice President Dick Cheney and the presidential adviser Karl Rove, Mr. Wilkes reflected on his plight.

“I’m a dead man. I wouldn’t be able to get a meeting. I wouldn’t be able to get a phone call returned,” he said. “There’s no way I could get a deal.”

http://www.nytimes.com/2006/08/06/w...



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