By Charles R. Babcock
Washington Post Staff Writer
Saturday, March 7 1998; Page A08

A federal grand jury in Boston indicted a Washington lobbyist on conspiracy and tax fraud charges Thursday in what two individuals familiar with the case say is a sign a long-running investigation of Rep. Bud Shuster (R-Pa.) and Ann Eppard, his chief fund-raiser and former top aide, is heating up.

Vernon A. Clark, 68, of Potomac, a longtime lobbyist for billboard interests and friend of Shuster and Eppard, was charged with conspiring with a client, Boston businessman Richard Goldberg, to defraud the Internal Revenue Service. The three-count indictment said Clark used Goldberg to funnel $77,000 in payments to subsidize the living expenses of a female friend in the early 1990s. Goldberg was convicted of tax fraud in 1995 for some of the same acts outlined in the Clark indictment.

Shuster and Eppard are not mentioned in the charges. But the indictment notes that Goldberg hired Clark in 1989 to lobby public officials to stop the government from taking his parking lot near Logan International Airport as part of a multibillion-dollar highway project known as the "Big Dig." Sources familiar with the case said prosecutors have been pressuring Clark to talk about dealings he, Goldberg and another Boston businessman had with the congressman and his former aide on the highway dispute in the early 1990s.

At the time, Shuster was the senior Republican on the House subcommittee that controlled funding for the multibillion-dollar Boston project, which is burying 7.5 miles of interstate highway. He is now chairman of the full Transportation and Infrastructure Committee.

News accounts in Boston in the past year have said prosecutors are investigating whether Shuster and Eppard helped Goldberg and restaurateur Nicholas Contos in return for favors. Goldberg and Contos made campaign donations to Shuster, and Goldberg paid speaking fees to Shuster and Eppard during the early 1990s, according to public records.

A spokesman for Goldberg confirmed that he also paid a $10,000 "consulting fee" to Eppard's son Ralph during the same period, but did not say what he did for the money. Contos, who is cooperating with authorities, loaned Ralph Eppard money to help finance a Maryland car dealership he started in 1992, according to the Boston Globe.

The businessmen settled their disputes with the government in 1991, Goldberg in a land swap with the state and Contos in an arrangement involving Conrail Inc., the railroad company. Sources said that Eppard approached Conrail on Contos's behalf and that Conrail was subpoenaed in the probe. Shuster has acknowledged forwarding a letter from a lawyer to the Department of Transportation on behalf of businessmen complaining about the land takings.

Clark was collecting $1 million a year, mostly from billboard companies, in the early 1990s. He currently reports making about $750,000 a year representing five clients. They are Goldberg's company, R.J. Reynolds Tobacco Co., Metromedia International Group Inc., News Corp. and the Coalition for Property Rights, an alliance of billboard interests. The coalition paid him $328,000 last year.

Clark, his attorney, Shuster and Eppard did not respond to calls seeking comment. Shuster has dismissed earlier reports about the Boston grand jury as "baloney."

Shuster's close relationship with Eppard also is the subject of a probe by the committee. After leaving his staff in 1994, Eppard remained Shuster's chief fund-raiser and became a lobbyist with billings of more than $1 million a year. The complaint followed a Roll Call report in early 1996 that questioned whether Shuster's stay at Eppard's Alexandria town house was an improper gift.

Staff researcher Ben White contributed to this report.