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FBI Raids Lobbyists' Homes, Office

Agents are investigating whether Pennsylvania Republican Rep. Curt Weldon steered business to his daughter's firm. He denies wrongdoing.

October 17, 2006|Richard B. Schmitt and Chuck Neubauer | Times Staff Writers

WASHINGTON — FBI agents conducted raids in two states Monday as part of an investigation into whether Rep. Curt Weldon used his influence to steer business to a lobbying firm owned by his daughter and a one-time campaign aide, Justice Department officials and others familiar with the investigation said.

Federal investigators are trying to determine whether the Pennsylvania Republican helped secure almost $1 million in contracts for a firm known as Solutions North America, run by his daughter, Karen, and a prominent Philadelphia-area Republican, Charles P. Sexton Jr. Sexton once served as the 10-term congressman's campaign finance chief.

The raids are another political setback for the Republican Party as it struggles to maintain control of Congress. Weldon, who represents a suburban Philadelphia district, is locked in a closely contested campaign with a retired Navy vice admiral.

The news of the probe comes as the FBI is looking into salacious messages sent to House pages by Florida Rep. Mark Foley, who resigned his seat.

The FBI on Monday searched four locations in Pennsylvania, including the homes and office of Karen Weldon and Sexton. Also searched was the Jacksonville, Fla., headquarters of Itera International Energy Corp., the U.S. arm of a diversified Russian-based oil and gas firm.

The FBI also searched the law office of Philadelphia attorney John Gallagher, a longtime Weldon friend and supporter who did legal work for the consulting firm, said people familiar with the probe who requested anonymity because of the ongoing investigation. The FBI did not raid Weldon's home or office.

Speaking to reporters in Pennsylvania Monday, Weldon called the investigation politically motivated. "I've never helped my daughter get anything," he said. "My kids are qualified on their own."

An attorney for Weldon questioned the timing of the disclosure of the probe, which appears to stem from an investigation on Weldon that ran in the Los Angeles Times. "I think it is very suspicious that 2 1/2 years after the Los Angeles Times broke the story, that the FBI is now getting around to looking at it three weeks before the election," said William B. Canfield.

Canfield said the House Ethics Committee reviewed the case and the matter was resolved "in a way that was satisfactory to everyone."

In 2004, The Times disclosed that Solutions North America won contracts from companies or individuals that Weldon tried to help. The beneficiaries included two struggling Russian firms and a Serbian family linked to accused war criminal Slobodan Milosevic.

An FBI spokeswoman, Debra Weierman, confirmed Monday that agents had conducted six searches as part of an investigation but declined further comment.

Legal experts said that an agreement between a member of Congress to take official action in exchange for cash or other benefits -- even if the gifts are not received by the lawmaker -- could constitute bribery. But such allegations are difficult to prove and require evidence of a quid pro quo.

Weldon is a leading voice in Washington on the affairs of former Eastern bloc nations. He is also vice chairman of the powerful House Armed Services Committee and has been able to spread federal contracts over his district and region.

But his hold on his seat is precarious. The district voted Democratic in the last two presidential elections.

He is facing a stiff challenge from Navy veteran Joe Sestak, who has tried to tie his opponent to what he calls the failures of the Bush administration, including the war in Iraq.

The latest independent poll showed the race in a statistical dead heat.

Sexton, reached by phone Monday, declined comment. In an interview with The Times on Saturday, Sexton said he had not heard of any investigation. "The allegations are preposterous that there was any wrongdoing on the part of Mr. Weldon and his daughter or me," he said.

Karen Weldon, now 32, was inexperienced in international consulting when she and Sexton set up their business. She had previously spent six years working for Boeing Co., in what she described as "learning and training programs."

Their first client was Itera International. At the time, the congressman was trying to help improve the company's image with U.S. officials after questions had been raised about how the firm acquired gas fields in post-Soviet Russia. Weldon went to bat for Itera with federal agencies.

Itera agreed to pay his daughter's firm $500,000 a year around the same time that Weldon was extolling the company and helping to round up 30 congressional colleagues for a dinner honoring the firm's chairman.

Gallagher, Weldon's friend, introduced Solutions to its second client, a fledgling Russian aerospace manufacturer named Saratov Aviation Plant that wanted to sell its products in the United States. Weldon and his daughter journeyed to Saratov to look at the company's flying-saucer technology. Weldon pushed the Navy to look at the saucer. His daughter's firm ended up with a $20,000-a-month contract with Saratov. Karen Weldon's firm has since parted ways with Saratov.

Weldon introduced his daughter to her third client, two wealthy Serbian brothers, Dragomir and Bogoljub Karic who had been linked to Milosevic. Weldon sought to win U.S. visas for the men both before and after their family foundation hired his daughter's firm for $240,000 a year.

*

rick.schmitt@latimes.com

chuck.neubauer@latimes.com

Times staff writer Walter F. Roche Jr. contributed to this report.

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