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The Rev. Lyons: A ministry questioned


Lawmaker got $10,000 from Lyons fund


© St. Petersburg Times, published April 14, 1998

During her campaign for re-election in 1996, U.S. Rep. Corrine Brown of Jacksonville accepted $10,000 from a secret Wisconsin bank account Baptist leader Henry J. Lyons allegedly used for money laundering.

A $10,000 payment to Corrine Briown raises questions on several levels about whether Brown violated any ethics rules, campaign finance laws or financial disclosure requirements.

A longtime political ally of Lyons, Brown did not report the money on either her financial disclosure statements or her campaign contribution reports.

Brown, a Democrat who has a record of ethics and campaign violations, declined to be interviewed about the $10,000 payment.

Her attorneys, however, denied any wrongdoing. She did not use the money for personal expenses, nor did Lyons get special treatment because of the payment, they said. The $10,000 was solicited from Lyons, they explained, to help pay for a rally Brown organized to protest a legal challenge to the shape and racial makeup of her congressional district.

Given nearly three weeks to respond, Brown's office could not produce any bank records or receipts that showed how the money was spent.

The payment raises questions on several levels about whether Brown violated any ethics rules, campaign finance laws or financial disclosure requirements. Beyond any legal or political ramifications for Brown -- she is up for re-election this year -- the $10,000 payment could be significant for Pinellas-Pasco State Attorney Bernie McCabe, who has charged Lyons with racketeering and grand theft.

The money came from a secret account in Milwaukee that is a focus of the charges against Lyons. Prosecutors allege that Lyons, president of the National Baptist Convention USA, hid more than $1-million in the account.

They say Lyons extorted the money from a Canadian company by threatening, among other things, to instigate a Congressional Black Caucus investigation into the company's dealings with black customers. (Brown, a leader in the caucus, denies knowledge of the alleged extortion, her lawyers said.)

For prosecutors, the challenge will be to tie Lyons to the Milwaukee account, held under the name JH Associates. The only signatories on the account were a Milwaukee diner owner and Bernice Edwards, a former National Baptist Convention official who was arrested with Lyons in February. Until now, there was little indication that Lyons controlled withdrawals or deposits from the JH Associates account.

If Brown's version of the $10,000 payment is accurate, it would help demonstrate Lyons' authority over the secret account.

Lyons declined to confirm Brown's explanation of the $10,000 payment. Instead, Lyons' attorneys sought to dissociate him from the payment.

In a letter to the St. Petersburg Times, attorney Grady Irvin wrote: "I am reminded of the fact that your newspaper has previously published a story that stated Rev. Lyons was not a signatory or a party who opened the ... account in Milwaukee. Therefore, I fail to see why you are making inquiry of Rev. Lyons concerning the account."

Many questions remain about the payment.

Brown's attorneys said they don't know who solicited the money from Lyons. They don't know who accepted the bank check, made out personally to Corrine Brown. They don't know who took the check to a Jacksonville bank.

Brown's attorneys said she knew nothing of the secret account or Bernice Edwards. How, then, did Brown or anyone else in her office know the $10,000 check was from Lyons?

Her attorneys say they don't know that either.

Old friends

Corrine Brown, a liberal Democrat, grew up in Jacksonville. She is 51, a Baptist, divorced with a grown daughter

After a decade in the Florida Legislature, Brown won a seat in the U.S. House in 1992. The district had been realigned to create a narrow majority of African-American voters.

Her district loves her. In three elections, Brown has never won with less than 58 percent of the vote.

Her support depends on two mainstays. Organized labor and major industries, such as Big Sugar, show their appreciation with political action committee money. Black churches, meanwhile, are where Brown finds her base of voters.

Among Brown's most powerful religious allies: Bishop Frank Cummings, who leads the region's 470 African Methodist Episcopal churches, and Lyons.

As Lyons faced a furor over his financial dealings last year, Brown was unwavering in her support. "He's a good person, with a good heart, a great leader and he will continue to be a great leader," she said.

The bond between Brown and Lyons dates back many years. The two have shared the political spotlight, business associates and money.

Early on, Brown helped Lyons' daughter get a $1,000 scholarship.

In 1992, Brown paid $5,000 in campaign funds to a St. Petersburg company bearing the address of Lyons' church. She reported the money was for a computer. The company had been dissolved six years earlier.

Brown paid Palatka minister Fred Demps to do "community outreach" for her in 1993. Prosecutors say Demps, one of Lyons' closest business partners, helped Lyons defraud several corporations.

In 1994, Lyons contributed a total of $1,300 to Brown's primary and general election campaigns. That year, with Lyons at the height of his power as the new convention president, Hillary Rodham Clinton visited his church. Among the small group of honored speakers: Corrine Brown, whose election was weeks away.

Another connection has emerged, dating back to 1993. Invoices obtained by the Times suggest Brown's office reserved several airline tickets for Lyons at the government discount rate.

The invoices, from Omega World Travel, are addressed to Brown at her office in Washington, D.C. Lyons is the passenger. The trips: Chicago to Jacksonville, then on to New York City on May 13, 1993; two days later, New York to Charlotte, N.C., and on to Tampa; a week later, Little Rock, Ark., to Nashville to Tampa.

The invoices state the tickets were to be purchased for official government travel -- a designation that allows members of Congress to fly at discounted rates at taxpayer expense.

Under the rules of Congress, only members or their staff are eligible for discounted government travel, and then only with the signed authorization of the House member.

Lyons declined to comment on the trips. "You should direct your inquiry to Congresswoman Brown's office," his spokeswoman said.

Brown's attorneys said she paid for the tickets herself, not with taxpayers' money. She wrote a personal check to Omega Travel for $720, the amount of the flights, they said. "She said she knew perfectly well what the government can pay for and what it can't," said her attorney, Robert F. Bauer. "So she took the appropriate course and paid for it out of personal funds."

Bauer said he did not know if Brown purchased the tickets at the reduced government rate.

Why would Brown buy tickets for Lyons? "Rev. Lyons has been active in a number of community events and initiatives with Congresswoman Brown, and the travel in question is likely so related," Bauer and fellow attorney B. Holly Schadler said in a written statement to the Times.

Brown has a record of ethical lapses.

In 1993, she paid a $5,000 fine to the Florida Ethics Commission, which found she had used legislative staff members as employees in a travel agency she owned.

The Federal Election Commission repeatedly has admonished Brown for flawed campaign spending reports. Her campaign treasurer quit after he discovered that his name had been forged on her campaign reports.

The staffer who forged the signature stayed on. He is Brown's chief of staff.

Rallying for Brown

In 1996, a young, white Republican lawyer named Preston James Fields was campaigning to unseat Brown. With little name recognition or money, Fields was a long shot

But there was another, more potent threat to Brown's incumbency that year. Her district had been challenged in federal court. The 3rd District twisted and turned for 250 miles, stitching together predominantly black neighborhoods from Orlando to Jacksonville to Gainesville. The plaintiffs called it unconstitutional racial gerrymandering.

If the challenge succeeded, it seemed likely that Brown's base of black support would be eroded -- or so Fields hoped.

The trial began Feb. 19, 1996, before three judges in Tallahassee's federal courthouse. At dawn, dozens of buses departed from towns across Brown's district. They carried hundreds of voters toward Tallahassee. A few more buses joined from Miami and St. Petersburg.

Just before the trial's lunch break, about 1,000 people marched to the steps of the courthouse.

Fliers billed the event as a "Voting Rights Rally" and listed three "sponsors:" The NAACP, the National Baptist Convention and "Florida's AME churches."

Corrine Brown's name wasn't on the flier, and reporters were led to believe that churches, civil rights groups and labor organizations from across the state had chartered buses to demonstrate concern about minority representation in Congress.

In fact, the rally was initiated and organized by Corrine Brown. She and her campaign staff hired buses. They rented the tents, portable toilets and an airplane that towed a banner over the courthouse. They made hotel reservations for the dignitaries they invited.

Her attorneys said Brown "took a leadership role in organizing the rally" to "make an important public statement about preserving progress under the Voting Rights Act in securing adequate representation of minorities."

Brown also could not have staged a better campaign kick-off.

The rally equated the defense of minority representation in Congress with the defense of her incumbency. One pastor called Brown "a sacrificial lamb" who must be protected. "Don't think for a minute they'll be satisfied with taking just Corrine Brown's district," U.S. Rep. Earl Hilliard, D-Ala., warned the crowd.

The rally featured gushing endorsements from politicians and pastors. "Corrine Brown, in my opinion, is the best congressperson in Washington -- and that includes me," said U.S. Rep. Carrie Meek, a Miami Democrat.

The rally received wide news coverage, including candidate-pleasing headlines such as this one in the Tallahassee Democrat: "Rally on behalf of Rep. Corrine Brown draws hundreds."

It fired up her core supporters, people like Emma Morgan, 74, who taught Brown home economics in high school. For her, the rally drove home two clear messages -- leave the district alone and re-elect Corrine Brown.

"I shouted for her," Morgan said. "I love Corrine Brown. I hope she wins everything. Nobody better mess with Corrine Brown."

The Rev. Billy G. Brock of Jacksonville recalled being asked to give a campaign contribution to Brown at an organizing meeting for the rally. After the rally, someone from her camp asked him to volunteer in her campaign.

"The reason I was there was for Corrine Brown," Brock said, adding that the rally solidified his plans to vote for her again. Anyone listening to all those testimonials about Brown -- anyone listening to Brown describe her efforts for the district -- would have felt the same, he said.

"If they had heard some of the things that were said, they'd realize it wasn't just a black-white issue. They'd realize that Corrine is the best person to represent the district, regardless of race," he said.

As for those rally "sponsors," the NAACP played no role in either financing or organizing the event, said Leon Russell, president of Florida's NAACP branches.

"That wasn't something that we got involved in," Russell said. "That would have been (Brown's) responsibility."

Brown wanted his help recruiting people from her district to attend the rally, he said. "All we were asked to do was bring in as many people as we could do, which we did."

Bishop Cummings, who oversees AME churches in Florida, recalled speaking with Brown before the rally "about were my people going to support it. I said my people will be there."

But Cummings did not attend the rally, nor did the AME as an organization put up any money.

"We can't do it that way," he said.

Federal law prohibits political contributions from religious organizations. Violations can result in loss of tax-exempt status. (Lyons wrote a $2,500 convention check for a fund-raising dinner with Mrs. Clinton. The check was returned, but Lyons is facing an IRS investigation.)

Cummings said some AME church members contributed to the rally. "Whether they raised one dollar, two dollars, whatever, I don't know," he said.

Records show that most of the rally expenses were paid by Brown's campaign committee. The rally was the single biggest expense for her campaign in that reporting period. The nearly $18,000 she spent on the rally was 65 percent of her campaign expenses for the first quarter of 1996.

Brown says there was another major source of money for the rally: Henry James Lyons.

A check for $10,000

About the time Brown was planning her rally, Lyons and his Milwaukee business partner, Bernice Edwards, were making plans of their own, prosecutors say

The Loewen Group, a white-owned funeral company that did business with the Baptist convention, had just lost a $500-million judgment in a racially charged lawsuit. Lyons and Edwards began demanding $2-million from Loewen, claiming they had the clout to get the Mississippi verdict thrown out and keep Loewen out of more racial trouble, prosecutors allege.

At one point, Loewen officials recalled, Lyons told them he had met with angry Congressional Black Caucus members who "were going to launch an investigation of Loewen for allegedly ripping off poor people." Lyons said he had put a stop to the Black Caucus "investigation," but he threatened to renew the caucus inquiry if he did not get paid.

On Feb. 1, 1996 -- 18 days before Brown's rally -- the Loewen Group wired the first of two $500,000 payments to an account at Milwaukee's Guaranty Bank. The account was in the name of JH Associates. Prosecutors say JH Associates was nothing more than a hidden account used to launder money extorted from Loewen.

One of the first withdrawals from that Loewen money: A $10,000 bank check made out to Corrine Brown, personally.

Through her attorneys, Brown offered this explanation of the $10,000: Lyons was solicited for money to help pay for Brown's rally. Specifically, the lawyers said, Lyons was asked to pay $10,000 toward the chartered buses.

"Our best information as of this date is that the check for $10,000 was converted to a cashiers check before presentation to the charter company in payment of these expenses," Brown's attorneys said in their written statement.

But the lawyers did not produce copies of the bank check or of the cashier's check they say the bus company was paid. Nor did they produce receipts from the bus company.

Instead, they showed the Times eight invoices from Pameron Tours, a Jacksonville bus company. The invoices stated that Pameron Tours was to provide 15 buses for the rally. The total cost of the buses would be $10,427.

Brown's attorneys said Lyons' donation was to be applied toward this cost.

They noted that several of the invoices listed the "client" as the National Baptist Convention and the "contact" as Henry Lyons. Others, however, named Brown as the client. And most of them listed the same contact phone number: 202-225-0123.

That's the number for Brown's Washington office.

It is unclear whether Lyons ever dealt with Pameron. If Lyons hired Pameron Tours -- as Brown suggests -- why didn't he send the $10,000 check directly to the company, made out to Pameron? Why were the invoices -- for Lyons' buses -- on file in Brown's office?

Remember, Brown's attorneys said Lyons spent $10,000 on buses. The invoices only show that $2,269 had been paid, and that was for deposits on the buses. Brown's lawyers acknowledged they don't know who paid the deposits. Brown's campaign reported paying Pameron Tours $2,000 on Feb. 7. In the invoices, Pameron reported receiving $2,000 in bus deposits on Feb. 8. Could the Brown campaign -- not Lyons -- have paid these deposits? Brown's attorneys said they don't know.

As for the remaining balance of $8,158, the invoices did not reflect if it was ever paid, or if so, by whom.

On Jan. 25, 1996, one day before most of the bus orders were placed, Brown wrote a letter to Lyons. She thanked Lyons for agreeing to testify at the upcoming trial in Tallahassee. She praised him for agreeing to join her at the rally.

"Your participation in this event would mean a great deal to me personally and to the survival of minority voting districts throughout the country," Brown wrote.

"Again, thank you for your tireless support. Your sister in the struggle, Corrine Brown."

Brown's letter never mentioned buses. In a two-page thank-you letter, there was no "thank you" for a $10,000 pledge.

Her attorneys said they can find no correspondence between Lyons and Brown acknowledging the money.

The bottom line, Brown's attorneys conceded, is that without receipts or bank records, it is impossible to prove what happened to the $10,000.

They did, however, locate copies of checks and receipts for many other rally expenses: tents, catering, other buses, toilets, hotels, the sound system. But those expenses, they said, were paid by Brown's campaign committee, which they said kept careful records.

Why weren't there similar records of the $10,000 from Lyons? Because Brown never considered the money to be in her control, her attorneys said. She believed if anyone ever raised questions, she could get records from Lyons and Pameron Tours.

Pameron Tours is closed. Its owners, Pam and Ron Clower, have vanished. The last time their neighbor, Teresa Knight, heard about them, the IRS was searching for them for back taxes. "They went into hiding," Knight said.

As for Lyons, Brown's office has gotten nowhere. "We requested information and related documentation from Dr. Lyons about this contribution and have not yet heard back from him," said Brown attorney Bauer.

Others connected to the transaction did not confirm Brown's account of how she spent the $10,000. Bernice Edwards' attorney declined comment. The Milwaukee diner owner, the other signatory on the account, did not return phone calls.

Not a gift, not a contribution

Federal election laws require candidates for the U.S. House of Representatives to report anyone who gives them more than $200 in a year

Lyons is not listed as a contributor on the campaign report Brown filed in 1996, the year of the $10,000 check. (The only mention of Lyons in that report, in fact, comes in the expenditures column: A week after the rally, Brown gave a $350 "contribution" to Lyons' National Baptist Convention.)

If the $10,000 check had appeared in Brown's report, it would have been a violation of campaign contribution limits. Federal laws limit contributions to $1,000 per election.

Brown's lawyers said the check wasn't listed on Brown's campaign reports because it was intended for the rally, which they contended was not a campaign event. "The rally was clearly not a "campaign rally,' but rather a rally committed, as its sponsors and Representative Brown made clear, to the fulfillment of the Voting Rights Act," they said.

The Federal Election Commission has decided that money raised and spent on battles over redistricting -- the redrawing of a congressional district's shape -- does not have to be included in campaign spending reports, Brown's lawyers said. In advisory rulings involving other candidates, however, the FEC seems to have narrowly defined what qualifies as legitimate redistricting activities that need not be reported: lawyers to fight in courtrooms, lobbyists to fight in legislatures, computer experts to study data.

What about a campaign-style rally?

The standard, according to Ken Gross, a former FEC lawyer, is whether a politician is trying to influence the outcome of their election. If so, that's a campaign expense -- and needs to be reported.

"I can't say I've ever heard of a rally" being defined as a redistricting activity, Gross said. "When the candidate attends the rally, it gets fuzzy. If you are raising money for a campaign or advocating for your election or advocating for the defeat of your opponent, you would have a problem."

Members of Congress also are required to report personal gifts, income and loans in annual Financial Disclosure Statements. Members are barred from accepting more than $250 as a gift from friends.

The $10,000 check was listed nowhere on Brown's 1996 disclosure form.

Her lawyers said Brown did not need to report the payment as a gift because she "did not request or receive these funds in her personal capacity but as an organizer of the event, and solely for the purpose of paying expenses of the event."
-- Times researchers Carolyn Hardnett and Kitty Bennett and Times staff writer Bill Adair contributed to this report.

The Rev. Lyons: A ministry questioned

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