Firm to Pay $8 Million Fine for Illegal Campaign GiftsBy Ruth Marcus
Washington Post Staff Writer
Thursday, October 9, 1997; Page A01
A Pennsylvania landfill company has pleaded guilty to funneling $129,000 in illegal corporate donations to 10 political candidates including the presidential campaigns of Robert J. Dole and Bill Clinton and agreed to pay an $8 million fine, the largest penalty ever for a campaign finance violation, the U.S. attorney in Harrisburg said yesterday.
While the company pleaded guilty, six individuals four former officials of the firm, a business associate and a Pennsylvania state legislator still face trial in a separate, 140-count indictment charging they made the illegal contributions and then tried to cover them up when prosecutors began probing the company.
According to the indictment against the company, Empire Sanitary Landfill engaged in an intricate and extensive effort to disguise the illegal corporate contributions as coming from individuals who worked for the company or were associated with it. Empire, which was lobbying on a trash transportation bill pending in Congress, then reimbursed the employees and others for their contributions, the indictment alleged.
The biggest beneficiary of the Empire scheme was the Dole presidential campaign, which allegedly received $80,000 in illegal contributions in April and May 1995. The Clinton-Gore campaign received $10,000 in illegal contributions in September 1995, the indictment said.
The investigation of Empire began after The Washington Post and the Wall Street Journal reported in April 1996 about large contributions to the Dole campaign from numerous Empire employees, many in low-level jobs such as secretary, account clerk and chef.
Other recipients of the allegedly illegal contributions were Pennsylvania Republican Sens. Arlen Specter ($10,000) and Rick Santorum ($6,000); two unsuccessful GOP Senate candidates from New Jersey, Chuck Haytaian ($10,000) and Richard DuHaime ($5,000); Sen. Max Baucus (D-Mont.) ($1,000); and Reps. Jon D. Fox (R-Pa.) ($3,000), Frank Pallone Jr. (D-N.J.) ($3,000) and Bill Paxon (R-N.Y.) ($1,000).
U.S. Attorney David M. Barasch said there was no indication that the campaigns involved were aware of the illegal nature of the contributions they received.
Barasch said Empire and its officials engaged in "misconduct which goes to the heart of our electoral process."
According to the indictment, the Empire officials would recruit employees, business associates, friends and family to make the contributions, then reimburse them directly from corporate funds or from the officials' own accounts and repay themselves from corporate funds. They hid the use of the funds on the company books by coding the reimbursements as office entertainment expenses or other legitimate corporate costs, the indictment said.
After the newspaper reports about the Empire donations appeared, Empire officials Michael Serafini and Leo Del Serra pressured one contributor to sign a false statement about whether he had been reimbursed and asked two consultants to submit phony invoices to justify the corporate reimbursement checks, according to the indictment. It also alleged that plumbing contractor Robert Giglio and Pennsylvania state legislator Frank Serafini lied to the grand jury about whether they were reimbursed for their contributions.
Empire is the second company to be implicated in funneling illegal corporate donations to the Dole campaign. In July 1996, a former top Dole fund-raiser, Simon C. Fireman, agreed to pay $6 million in personal and corporate criminal fines for illegally funneling $120,000, mostly through employees of his company, Aqua-Leisure, to the campaigns of Dole and others.
Dole campaign lawyer Kenneth Gross said the campaign "did everything we could have responsibly done" to check the legality of contributions and "scrupulously comply with the federal election laws." He said the Dole campaign would refund the Empire money "to whomever the prosecutors deem appropriate."
But Kent Cooper, executive director of the Center for Responsive Politics, said campaigns that receive "bundles" of checks from individual companies, as happened in the Empire and Aqua-Leisure cases, should be held responsible for failing to make adequate inquiries about whether the donations were legitimate.
"I think the campaigns have totally neglected their responsibility and that the recipient ought to be held accountable for asking some fundamental questions," Cooper said. "They turn a blind eye to it and they just cash the money. Even if it's a secretary giving a $1,000 contribution or some other person who might not be in an occupation where you'd think they'd have disposable income of $1,000, they immediately bank it."
Clinton-Gore general counsel Lyn Utrecht said she reviewed the Empire-related checks after being contacted by prosecutors. "The checks did not look on their face to be problematic and my understanding from our fund-raiser . . . was that the money came to us from a person who was known to our people as a very reputable attorney so we had no reason to think . . . there was anything wrong with it," she said. Utrecht said the campaign refunded the money to the purported contributors earlier this year.
Empire was acquired in December 1996 by USA Waste Services Inc., which is now responsible for the fine. USA Waste Services Inc. said in a statement that all wrongdoing took place before the purchase and that it "will not tolerate any improprieties within our organization."
© Copyright 1997 The Washington Post Company