Congressional Accountability Project
1611 Connecticut Ave. NW Suite #3A
Washington, DC 20009
Phone (202) 296-2787 * Fax (202) 833-2406
cap@essential.org * www.essential.org/orgs/CAP/CAP.html



December 6, 2000

Lee J. Radek
Chief
Public Integrity Section
Criminal Division
U.S. Department of Justice
Tenth Street and Constitution Ave., NW
Washington, DC 50530

RE: Request for Investigation of Rep. James Moran and Terry Lierman
Dear Mr. Radek:

This letter constitutes a formal request to the Justice Department to investigate whether:

1. Representative James P. Moran (D-VA) violated federal statutes prohibiting the receipt of illegal gratuities, or solicitation of things of value from favor-seekers, by accepting and/or soliciting a $25,000 unsecured loan, with generous terms, from a registered lobbyist, Terry Lierman.
2. Terry Lierman violated the federal illegal gratuities statute by providing a $25,000 loan to Moran.
On October 31, 2000, The Washington Post reported that Rep. James Moran had received a $25,000 unsecured, low-cost, open-ended loan ("Lierman loan") from Terry Lierman, who, at that time was a registered lobbyist and President of Capitol Associates Inc., a lobbying firm.


According to the Post, the terms of the Lierman loan were generous to Moran, apparently far better than what was available in the commercial loan market through an arm's length transaction.
 

Yesterday, Lierman faxed to The Washington Post a copy of a one-paragraph promissory note dated June 25, 1999, that said Moran borrowed $ 25,000, with the option to borrow more at the same 8 percent annual interest rate. The promissory note was never publicly recorded, Lierman said.
The Washington Post reported that "The promissory note [for the Lierman loan] is dated five days before Moran signed on to the Claritin bill."(3) The closeness in time between the Lierman loan and Moran's official acts in support of Lierman's client Schering-Plough(4) raises questions about whether Moran and Lierman may have violated criminal prohibitions against the offering, solicitation and receipt of illegal gratuities. The Justice Department should determine whether Moran and Lierman violated the federal illegal gratuities statute, which prohibits government employees from directly or indirectly seeking or receiving personally anything of value other than "as provided by law...for or because of any official act performed or to be performed"(5) and prohibits anyone from directly or indirectly providing anything of value to government employees "otherwise than as provided by law...for or because of any official act performed or to be performed."(6)

As a part of this investigation, the Justice Department should determine whether Moran performed legislative favors for any of Lierman's other clients near the time of the Lierman loan. The Washington Post reported extensively on Moran's legislative assistance to Lierman's lobbying client Schering-Plough. In addition, during 1999, many of Lierman's other lobbying clients had legislative business before the committees on which Moran sits. The Justice Department should investigate if, how, and when Moran aided Lierman's other lobbying clients too. In addition, the Justice Department should evaluate whether it is true, as Moran claims, that "Terry [Lierman] really never lobbied me on anything."(7) Such an investigation would help illuminate the context of the Lierman loan, and whether the Lierman loan was an illegal gratuity.

Lierman explained to the Post that "the essence of what we do" at his lobbying firm, is to "lobby to increase funding for various health-related programs."(8) Such lobbying overlaps well with Moran's committee assignments. When Moran received the Lierman loan, he was a Member of the House Committee on Appropriations and the Committee on the Budget. According to Lierman's lobbying reports, during 1999, Lierman lobbied on behalf of 31 clients with matters pending before those committees, including:

Academic Health Center Coalition
Albert Einstein Medical Center
American Association for Cancer Research
Bermuda Biological Station for Research
The Bushnell
Cell Therapeutics, Inc.
College on Problems of Drug Dependence, Inc.
Concert Productions Inc.
Cystic Fibrosis Foundation
FDA-NIH Council
Foundation for Fighting Blindness
Fred Hutchinson Cancer Research Center
Health Physics Society
Joint Council of Asthma, Allergy and Immunology
Kennedy Krieger Institute
Lustgarten Foundation for Pancreatic Cancer Research
Lymphoma Research Foundation of America, Inc.
NCCR
National Nutritional Foods Association
National Association of Community Health Centers
New York University Medical Center
Northwest Regional Education Laboratory
Northwestern Memorial Hospital
Parkinson's Action Network
Pennsylvania Convention Center Authority
Pennsylvania Higher Education Assistance Agency
Research Society on Alcoholism
The Rotary Foundation of Rotary International
Sea Solar Power, Inc.
Spina Bifida Association of America Foundation
Wake Forest University Baptist Medical Center(9)

Rep. Moran is Ranking Minority Member of the House Appropriations Committee's Subcommittee on the District of Columbia. In 1999, according to Lierman's lobbying reports, Lierman lobbied on behalf of 19 clients with issues related to or incorporated into legislation making appropriations for the District of Columbia, including:

Academic Health Center Coalition
Albert Einstein Medical Center
Cell Therapeutics, Inc.
College on Problems of Drug Dependence, Inc.
Concert Productions Inc.
Cystic Fibrosis Foundation
FDA-NIH Council
Foundation for Fighting Blindness
Fred Hutchinson Cancer Research Center
Joint Council of Asthma, Allergy and Immunology
Lustgarten Foundation for Pancreatic Cancer Research
National Association of Community Health Centers
Northwest Regional Educational Laboratory
National Nutritional Foods Association
Parkinson's Action Network
Pennsylvania Higher Education Assistance Agency
Research Society on Alcoholism
The Rotary Foundation of Rotary International
Spina Bifida Association of America Foundation

Lierman's lobbying firm, Capitol Associates Inc., boasts of its ability to influence the congressional appropriations and budget processes. In promotional materials, Capitol Associates says that it "gets results for our clients....Many of our clients have goals and objectives that involve securing federal funding for various projects and initiatives. We have a long record of success in this area..."(10) The Justice Department should determine to what extent Lierman's lobbying of Moran, in 1999, reflects or is responsible for this "long record of success.
 

The Justice Department should determine whether Moran violated federal law prohibiting federal employees from soliciting anything of value from favor-seekers or those who might be significantly affected by the employee's official acts. The Justice Department should probe who solicited the Lierman loan, as well as when, how, and in what context it was solicited. The Washington Post reported that Moran couldn't remember who solicited the Lierman loan. One day later, the Post reported that Moran's campaign chairman, Mame Reiley, claimed that she -- not Moran -- solicited the loan from Lierman. Even if Reiley initially solicited the Lierman loan, Moran may still have violated the prohibition against solicitation, because eventually Moran did know of and was therefore complicit in the solicitation.
  The Justice Department should thoroughly investigate the terms of the Lierman loan, the circumstances surrounding the solicitation of the loan, and any official acts that Moran may have taken to aid Lierman's lobbying clients, to determine whether Moran and Lierman violated federal law in offering, soliciting or accepting the Lierman loan.

Sincerely,

Gary Ruskin
Director


ENDNOTES

1. Jo Becker, "Moran Got Loan From Drug Lobbyist; Va. Congressman Co-Sponsored Bill to Help Pharmaceutical Firm." The Washington Post, October 31, 2000. Attachment #1 also includes Jo Becker, "Lierman Plays Down Lobbying; Morella Challenger's Activities Included Representing Drug Companies." The Washington Post, November 1, 2000. "Rep. Moran's Loan Deal." The Washington Post, November 1, 2000. Jo Becker, "Moran Says He'll Repay Lobbyist Immediately; Congressman to Return Drug Firm Donations." The Washington Post, November 2, 2000. "Probe Moran." Roll Call, November 6, 2000.

2. Jo Becker, "Moran Got Loan From Drug Lobbyist; Va. Congressman Co-Sponsored Bill to Help Pharmaceutical Firm." The Washington Post, October 31, 2000.

3. Jo Becker, "Moran Got Loan From Drug Lobbyist; Va. Congressman Co-Sponsored Bill to Help Pharmaceutical Firm." The Washington Post, October 31, 2000.

4. See Attachment #2.

5. 18 U.S.C. §201(c)(1)(B).

6. 18 U.S.C. §201(c)(1)(A).

7. Jo Becker, "Moran Got Loan From Drug Lobbyist; Va. Congressman Co-Sponsored Bill to Help Pharmaceutical Firm." The Washington Post, October 31, 2000.

8. Jo Becker, "Lierman Plays Down Lobbying; Morella Challenger's Activities Included Representing Drug Companies." The Washington Post, November 1, 2000.

9. See Attachment #3.

10. Capitol Associates website <http://207.127.113.12/home.asp?Page=Accomplishments>. See Attachment #4.

11. 5 U.S.C. § 7353.

12. Jo Becker, "Moran Got Loan From Drug Lobbyist; Va. Congressman Co-Sponsored Bill to Help Pharmaceutical Firm." The Washington Post, October 31, 2000.

13. Jo Becker and William Branigin, "Complaint Filed Over Loan From Lobbyist; Moran Got Cash From Friend."The Washington Post, November 1, 2000. See Attachment #5.