House for Sale: more on Letitia White and Trident Systems

It looks like there might be more problems in store for Letitia White, a lobbyist and former staffer to GOP Representative Jerry Lewis of California. And there may be even more problems for Lewis, the head of the House Appropriations Committee who is under federal investigation for his ties to lobbyists and for possibly steering money to well-connected companies.

Shortly after leaving the Hill in early 2003, White became a lobbyist for Copeland Lowery Jacquez Denton & White and retained Trident Systems, Inc. as a client. Copeland Lowery's “name” partners include Bill Lowery, a former congressman who is extremely close to Lewis. Trident has since paid Copeland Lowery hundreds of thousands of dollars in fees, and both Trident and Copeland Lowery are major political contributors to Congressman Lewis.

Then, as I reported two days ago, in late 2003 White bought a $1 million house on Capitol Hill with Nicholas E. Karangelen of Trident Systems. As first reported by TPMMuckraker, which has broken news about a number of aspects of this unfolding story, this house was put to use as the official headquarters of the Small Biz Tech PAC, operated by Congressman Lewis's stepdaughter, Julie Willis-Leon. Several contributors to that PAC have received earmarks from Lewis' committee, and a number are clients of White's firm; Willis-Leon herself received more that $40,000 for her services administrating the PAC.

Karangelen is the PAC's chairman. In a statement on the Small Biz Tech website that discusses the benefit of membership in the PAC, he wrote, “We will keep you informed of key legislative activity and be your inside source on Capitol Hill for small business technology issues. We will help you understand your representatives’ role and how they can help you promote your company-specific goals . . . You will be invited to participate in meetings on Capitol Hill and attend events with key members of Congress.”

In March of last year, the PAC sponsored a luncheon for Lewis at which the congressman, in a summation of his speech on the website, expressed “considerable concern that the Federal Agencies program managers and procurement officers continue to ignore the wealth of innovative and affordable resources available from American small-technology businesses.”

Recently, several sources have told me, a bitter internal dispute erupted at Trident and several senior people affiliated with the firm were terminated within the past seven months. I've been told that former and current officials at Trident had significant concerns about White's relationship with the company.

Both White and Karangelen have said that they each put up $500,000 when purchasing the million-dollar house, but some of the Trident officials have said that Karangelen actually put up the entire amount, along with additional monies for furnishings. Some of them have further alleged that White was rewarded financially by Trident for her work on behalf of the company with compensation related to the amount of money she brought into the company.

Patrick Dorton, a spokesman for White, vehemently told me that she and Karangelen have put equal amounts of money into the house and that “the purchase was not related in any way to work for Trident.” Dorton did not deny that White was compensated by Trident but said any money she received “was for work done after she left the Hill.” He declined to comment on the nature or amount of the compensation.

According to Keith Ashdown of Taxpayers for Common Sense, Trident has received extensive federal contracts and earmarks in recent years, including at least $12.2 million inserted into defense spending bills since 2002 and tens of millions in Small Business Innovative Research Grants. The PAC run by Lewis' stepdaughter was specifically set up to advocate that the small business grant program receive more federal funding, and Karengelen has testified before Congress in support of the program.

I've been told by a defense lobbyist and other sources that Letitia White was an aggressive advocate for Trident when she worked for Lewis; she has obviously been an aggressive advocate since becoming the firm's lobbyist. Ashdown said that Lewis has supported several federal appropriations to Trident during the past two years, but, in part because defense appropriation bills are so opaque and don't list earmark sponsors, he has been unable to confirm whether Lewis had a role in all the appropriations for Trident. (Last November 8, Lewis' office sent out a press release by email announcing that the congressman had secured $10.75 million in federal funding for a number of recipients, including at least five that are clients of Copeland Lowery. In addition to journalists, the list of addressees shows that Lewis's office had the courtesy to also send the announcement to several lobbyists, including Lowery and White.)

I also spoke with Karangelen and he vigorously disputed any wrongdoing, saying that media reports about his relationship with White have been completely misleading. He said that smaller firms like his have a hard time surviving given political realities. “The real story here,” he told me, “is that small technology businesses employ 31 percent of scientists and engineers in America but only four percent of the Defense Department budget goes to them.”

Karangelen told me that he and White went in 50-50 on the house, which he described as an investment property, and said there was nothing improper about the purchase. “Haven't you ever had a business partnership where you split the expenses?” he asked. “Letitia put a lot of energy into finding the place. She knows the Hill very well.” When I asked Karangelen whether White had ever been compensated for her efforts on behalf of Trident, he replied, “Just by asking me to answer that question, you are asking me to violate the Privacy Act. Do you know that?”

I can't attest to the accuracy of the allegations made by Trident employees, but people familiar with the situation say they that they are just as adamant about the accuracy of their assertions.

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