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Sweetener Makers Admit Campaign Donation Fraud

April 13, 1995|JOHN J. GOLDMAN | TIMES STAFF WRITER

NEW YORK — The manufacturers of the artificial sweetener "Sweet 'N Low" pleaded guilty Wednesday to federal charges that they had fraudulently avoided the limits on campaign contributions in an effort to keep the sugar substitute Saccharin on the market.

Federal prosecutors charged that over $200,000 was drained from the company using a false invoice scheme and funneled to members of Congress and party campaign committees. They said there was no indication the recipients knew they were getting illegal donations.

Among those who received the over-the-limit contributions from the Cumberland Packing Corp. were the Republican presidential campaigns of George Bush in 1992 and Bob Dole in 1988, the senatorial campaigns of Alfonse M. D'Amato (R-N.Y.), former Sen. Lloyd Bentsen (D-Tex.) and former Rep. Geraldine A. Ferraro (D-N.Y.), who was a vice presidential candidate in 1984.

Illegal donations also were made to committees of the Democratic and Republican parties.

Prosecutors charged the company made the contributions in an attempt to solicit support for keeping in place a congressional suspension of a ban on Saccharin, a key ingredient of Sweet 'N Low.

The Food and Drug Administration in 1977 proposed the ban against the sugar substitute, charging that Saccharin is a suspected carcinogen. Congress has voted to block the ban ever since.

"The Cumberland company and the individual defendants not only evaded the payment of taxes, but violated laws designed to limit the influence that corporations can exert on government officials through campaign contributions," charged Zachary W. Carter, U.S. attorney for the Eastern District of New York, where the case was brought.

"It is hoped that this prosecution sends a message that the federal laws governing campaign contributions will be vigorously enforced."

Carter said that Marvin Eisenstadt, Cumberland's president; Joseph Asaro, the company's former vice president, and five contractors and employees of Cumberland pleaded guilty in federal court in Brooklyn to charges including tax violations, conspiracy and obstruction of justice. Two additional defendants will plead at a later date, he said.

As part of the plea agreement, Cumberland will pay a fine of $2 million and the defendants face sentences ranging from one year to 20 years in prison, plus fines.

According to the 12-count information filed on Wednesday, the company, Asaro and six contractors conspired to defraud the Internal Revenue Service by filing false invoices for services they said were rendered to the company.

"The information does not allege that any of the recipients knew the contributions were made in violation of the federal campaign law," the U.S. attorney's office said.

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