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Judge Sets 10-Month Term in Political Donations Case

By George Lardner Jr.
Washington Post Staff Writer
Wednesday, September 10, 1997; Page A06

Handing out the first felony sentences growing out of the Justice Department's investigation of Democratic fund-raising practices, a federal judge yesterday ordered a husband and wife incarcerated for conspiring to hide illegal contributions to two congressional campaigns.

U.S. District Judge Ricardo M. Urbina sentenced Nora T. Lum, 55, and her husband, Gene K.H. Lum, 58, to 10 months' confinement and fined them $30,000 each at a short, tearful hearing here.

Once a familiar face at the Clinton White House, Nora Lum took main responsibility for funneling about $50,000 in illegal contributions in 1994 and 1995 to the congressional campaigns of Sen. Edward M. Kennedy (D-Mass.) and W. Stuart Price, a son-in-law of then-Senate Majority Leader George J. Mitchell (D-Maine), who was running for a House seat in Oklahoma in 1994.

Crying as she struggled through a brief statement, Nora Lum said she was sorry for the suffering she had caused her husband and other family members and told the court how she had seen "many friends turn their back on us" since they agreed last spring to plead guilty to felony charges and cooperate with government investigators.

Gene Lum said he recognized the seriousness of their crime, which hinged on straw donors and secret reimbursements, and asked the court to give his wife "the most lenient sentence it can."

But while their lawyer, Cono R. Namorato, said the California couple "were never motivated by any personal financial gain" and merely wanted "to promote causes that were important to them and their community," the government offered a different assessment.

Long before they began working for the Kennedy campaign in 1994, Justice Department prosecutor Raymond N. Hulser told the court, the Lums were accomplished fund-raisers. They began in the 1980s in Hawaii, where they were once involved in an abortive FBI investigation of public corruption allegations, and later they set up shop for the 1992 Clinton campaign in a Torrance, Calif., warehouse with support from Ronald H. Brown, then Democratic national chairman.

"They knew the rules," Hulser emphasized. "They knew there were limits on the amounts to be contributed and they knew that the [Federal Election Commission] . . . needed accurate information about contributors and contributions."

The Lums, Hulser said, "wrote checks to people" to churn up the money, bought money orders with other people's names on them and, in that way, conspired to evade the law limiting individual contributions to $2,000 in each election cycle.

Most of the money went to Kennedy's 1994 campaign and some to his Kennedy for Senate 2000 campaign. Price received $11,000. Some of the checks came from the corporate account of Dynamic Energy Resources Inc., a natural gas company the Lums bought with Price's help in 1993.

Hulser said the Lums were "the largest fund-raisers" at a "small, very expensive, elite fund-raising event" at Kennedy's home in McLean in the spring of 1995 to help the senator pay off his campaign debt.

Kennedy's office said the Lums raised $24,000 for the dinner, of which $13,000 has been returned to the listed donors along with $23,500 in other Lum-generated contributions that have been identified as illegal. The senator has said that his campaign "was not aware that any of these contributions were improper at the time they were made."

Urbina recommended that the Lums spend five months at a community confinement center and five months in home confinement, with electronic monitoring. They were released on their recognizance until authorities set a surrender date. The judge credited them with having made "significant contributions to their communities" and said he was impressed with the extent of their cooperation with the government.

The case against the Lums grew out of an independent counsel inquiry into allegations involving Brown, the late Democratic chairman and commerce secretary. Brown's son, Michael, is awaiting sentencing after pleading guilty to a misdemeanor for taking money from Nora Lum to make $4,000 in illegal contributions to Kennedy's 1994 campaign.

The Lums' daughter, Trisha, was fined $5,000 and placed on three years' probation last month for allowing her name to be used on a $10,000 donation to the Democratic Congressional Campaign Committee when it was really her mother`s contribution.

© Copyright 1997 The Washington Post Company

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