Source: www.usdoj.gov\opa\pr\1997\May97\213crm.htm

WEDNESDAY, MAY 21, 1997

CRIMINAL INFORMATIONS FILED AGAINST DEMOCRATIC FUND-RAISERS IN ILLEGAL CAMPAIGN CONTRIBUTION SCHEME

WASHINGTON, D.C. -- The Department of Justice today filed criminal informations charging Democratic fund-raisers Nora T. Lum, 54, and Gene K.H. Lum, 57, with a felony conspiracy based upon a scheme to make about $50,000 in illegal campaign contributions, through conduit or "straw" donors, to the 1994 federal campaigns of incumbent United States Senator Edward M. Kennedy and W. Stuart Price, the Democratic nominee for the United States House of Representatives in the First Congressional District of Oklahoma.

A daughter of the Lums, Trisha C. Lum, 27, also was charged with a misdemeanor violation arising from a separate incident in which she served as an illegal conduit for a $10,000 contribution to the Democratic Congressional Campaign Committee. The criminal informations were filed pursuant to negotiated plea agreements.

During the period covered by the scheme, Nora Lum was the majority shareholder, Chairperson, and Chief Executive Officer of Dynamic Energy Resources, Inc. ("Dynamic Energy"), a natural gas pipeline company in Oklahoma; Gene Lum was a Director of Dynamic Energy. At the time that Trisha Lum made her illegal contribution, she was an employee of the United States Department of Commerce.

The Federal Election Campaign Act (FECA) limits the amount of money which a person can contribute to a federal candidate in an election. The FECA also prohibits contributions to such candidates from a corporation, and prohibits a contributor from giving money to a federal election campaign in the name of another person. As described in papers filed by the United States, in order to evade the FECA's limits and prohibitions Nora and Gene Lum arranged for numerous conduit or "straw" contributors to give money to the Kennedy and Price campaigns using funds which the Lums provided from themselves or from Dynamic Energy.

The scheme constituted a conspiracy to defraud the United States by impairing, impeding, and defeating the lawful functions and duties of the Federal Election Commission (FEC), and to cause false statements to be submitted to the FEC. Separately, Trisha Lum was charged with knowingly permitting her name to be used in connection with a $10,000 contribution to the Democratic Congressional Campaign Committee, in violation of the FECA. The funds used to make this contribution came from Nora Lum.

The conspiracy to which Nora and Gene Lum agreed to plead guilty carries maximum penalties of five years of imprisonment and a $250,000 fine. The violation to which Trisha Lum agreed to plead guilty carries a maximum penalty of one year of imprisonment and a fine of up to $30,000.

These cases against the Lums were investigated by the Federal Bureau of Investigation and prosecuted by Raymond N. Hulser and Jonathan Biran of the Department of Justice's Public Integrity Section, Criminal Division. The investigation was begun by the Office of Independent Counsel Daniel S. Pearson and transferred by Independent Counsel Pearson to the Public Integrity Section in May 1996, following the death of Secretary of Commerce Ronald H. Brown. These cases subsequently became part of the continuing investigation being conducted by the Criminal Division's Campaign Financing Task Force, under the direction of the Public Integrity Section, into a wide range of matters arising from campaign fund-raising activity during the 1992-96 federal election cycles.

The Justice Department's Criminal Division continues to investigate matters transferred to it by Independent Counsel Pearson.

Copies of the plea agreements, the factual basis for the pleas, and the informations are available for messenger pick-up at the Office of Public Affairs.