Mr. Yokem,

back to the rules for being a republican.
Are these the rules?

http://story.news.yahoo.com/news?
tmpl=story&cid=2026&ncid=2026&e=2&u=/latimests/20040220/ts_latimes/lucrative
dealsforadaughterofpolitics

Lucrative Deals for a Daughter of Politics

By Ken Silverstein, Chuck Neubauer and Richard T. Cooper Times Staff
Writers

WASHINGTON — Karen Weldon, an inexperienced 29-year-old lobbyist from
suburban Philadelphia, seemed an unlikely choice for clients seeking global
public relations services.

Yet her tiny firm was selected last year for a plum $240,000 contract to
promote the good works of a wealthy Serbian family that had been linked to
accused war criminal Slobodan Milosevic (news - web sites).

Despite a lack of professional credentials, she had one notable asset — her
father, U.S. Rep. Curt Weldon (news, bio, voting record) (R-Pa.), who is a
leading voice in Washington on former Eastern Bloc affairs.

She got the contract after he championed the efforts of two family members,
Dragomir and Bogoljub Karic, to win U.S. visas from the State Department,
which so far has refused them entry.

Intelligence officials warned Weldon that the brothers were too close to
Milosevic, who is accused of leading the "ethnic cleansing" in the former
Yugoslav federation.

But the congressman has praised the Karics, who own a vast empire of
banking, telecommunication and other firms, as model business leaders and
humanitarians. He has portrayed them as victims of faulty intelligence
reports and, last month, asked the CIA (news - web sites) to sit down with
them and sort things out. He has repeatedly pressed the State Department to
give them visas.

Karen Weldon said her father "developed a rapport" with the Karics and
introduced her to them. But her firm, Solutions North America Inc., won the
consulting contract on its merits, she said. Her father declined to answer
questions for this article.

The congressman also has gone to bat for at least two of Solutions' other
clients, both struggling Russian companies.

Together, the three contracts are worth almost $1 million a year to her
firm for services that have included joining her father on congressional
trips and in meetings with clients.

The Weldons are the latest example of special interests hiring relatives of
important members of Congress as lobbyists and consultants. Over the last
year, The Times has identified 11 other House members and 17 senators with
relatives who lobby or consult, many of them for clients the members have
helped through legislative or other action.

Congressional ethics rules provide few barriers to the practice. They do
not forbid members of Congress from helping companies or others who are
paying their relatives.

But Weldon has brought his daughter so deeply into his official activities
that they sometimes appear to be working in tandem.

Conallen said the congressman's actions on behalf of Karen Weldon's clients
posed no ethical concerns.

"I just don't think there's anything strange about it," he said. "If Curt
wanted to he could snap his fingers and divert a lot of business to Karen,
and that hasn't happened."

Karen Weldon has a partner in Solutions, Charles P. Sexton Jr., 67, the
former finance chairman of Rep. Weldon's campaigns. Neither has lobbied
Weldon nor asked for his help, Conallen said.

"The fact that they have contracts with these clients hasn't influenced
anything Curt has done," he said.

The congressman was advocating for the Karics and other Eastern European
business interests long before his daughter opened her firm, Conallen said.

In a written statement Thursday, Conallen added, "The congressman is
generally aware of his daughter's company and the work she does for several
of her clients. But the congressman has not discussed the specifics of
Solutions North America's agreements with their clients or the nature of
their representation."

Karen Weldon declined to say whether she discussed her clients with her
father. But she said her firm's success was not due to his position in
Congress.

"Because of who he is, people have questioned me all my life about whether
I'm qualified and if I can do the job," she said. "I have nothing to hide.
I haven't done anything inappropriate."

Going Into Business

Rep. Weldon, a former school teacher, was first elected to Congress in 1986
from the Republican suburbs southwest of Philadelphia. Over nine terms, he
has moved up in seniority on the House Armed Services Committee. He is vice
chairman — the second-ranking Republican — and chairman of its tactical air
and land forces subcommittee.

Weldon, a Russian studies major in college, also is a noted advocate of
closer relationships with the former Soviet Union. He has made more than 30
trips to Russia as a member of Congress. He is the founder and chairman of
the Congressional U.S.-Former Soviet Union Energy Caucus and founder and co-
chairman of the official interparliamentary exchange between the U.S. and
Russia.

Today, Conallen said, "There is nobody in Congress more knowledgeable about
Russia than Curt Weldon." That judgment is shared by many of Weldon's House
colleagues.

Until she launched Solutions, Karen Weldon had been following a different
career path. She had an undergraduate degree in education and a graduate
degree in information systems.

She spent six years, she said, working on "learning and training programs"
for Boeing Co., which has a helicopter plant at the edge of Rep. Weldon's
district. Conallen said Weldon did not help his daughter get the job at
Boeing, which is a frequent beneficiary of his work in Washington and one
of his top campaign donors.

When she and Sexton opened their business in September 2002, Solutions'
office consisted of a cubicle in a suburban Philadelphia office suite that
provided a common receptionist and conference room for all 120 of its
tenants. A few months later, Solutions opened a similar office in downtown
Washington.

Karen Weldon said Sexton "makes a lot of the business connections" for
their firm. Her partner is a political power broker in Weldon's district
and the former owner of a security guard company, which he recently sold
for $6 million.

She described her role as "legwork and project management," including
graphics and Web development.

She said she doesn't work on legislation and called Solutions "more of a
business consultancy than a lobbying firm," though she and Sexton have
registered with the Justice Department (news - web sites) as foreign agents
for their three clients. Lobbyists representing overseas clients must file
disclosure reports with the department's Foreign Agents Registration Unit.

She would not say who else she and Sexton represented beyond the three
clients reported in Solutions' disclosure forms.

Karen Weldon said the idea for Solutions originated with Sexton. He was
already talking to Itera, the Russian energy company, she said. Sexton
declined an interview request from The Times.

She said they became 50-50 partners, and Itera became Solutions' first
client. It paid $170,000 of its annual fee up front — a timely infusion of
cash for a start-up firm, especially one that had little experience or
presence in Washington.

Russian Relations

Itera needed friends in Washington.

Questions had been raised by Russian energy and investment companies about
how Itera had gained title to billions of dollars worth of natural gas
resources from a state-controlled conglomerate called Gazprom.

William Browder of Hermitage Capital Management, a large Russian investment
fund with a stake in Gazprom, said the conglomerate transferred the assets
for little or nothing.

Itera officials declined to be interviewed.

The controversy has been a cloud over Itera's efforts to gain access to
Western investment capital and markets. The U.S. Trade and Development
Agency withdrew an $868,000 grant to the company in March 2002 after
questions were raised about Itera's background, said Leocadia Zak, an
agency lawyer. It was a setback to the image of the company, which is
seeking to expand its natural gas, timber and real estate holdings in the
United States.

Two months later, Rep. Weldon led a congressional delegation to Moscow in
connection with a visit by President Bush (news - web sites). Weldon toured
Itera's offices and, according to a company news release, praised it as
a "strong and well-established company," and recommended it as "a great
source" for U.S. energy firms seeking partners for joint ventures.

When he returned home, Weldon blasted the Trade and Development Agency's
decision at a news conference and made calls to the State Department on the
company's behalf, though to no avail.

On Sept. 5 and 6, 2002, Itera paid for Weldon's lodging in New York so he
could do an interview with Russian radio about energy, Conallen said.

A week later, Itera sent e-mails to Karen Weldon telling her the company
would complete the terms of a contract with her firm at an upcoming dinner
in Washington that her father was co-hosting to honor Itera's chairman.

The dinner took place Sept. 24 at the Library of Congress. That day, Rep.
Weldon had introduced a resolution in the House that encouraged U.S.-
Russian cooperation on developing energy resources. Two days later, in a
floor speech, he gave House colleagues a glowing report on Itera.

On Sept. 30, Itera signed the $500,000-a-year contract with Solutions,
which agreed to work on creating "good public relations so in the future
Itera may sell goods and services to U.S. entities," according to foreign
agent disclosure filings. They show the Library of Congress dinner as one
of the firm's first efforts on Itera's behalf.

When Rep. Weldon led a congressional delegation to Eastern Europe two
months later, Itera paid for Karen Weldon to join him. Father and daughter
met with the president of Georgia, and the congressman helped Itera resolve
a costly commercial dispute with the government. During a stop in Moscow,
Rep. Weldon called for increased U.S. imports from Itera and other Russian
energy corporations.

By January 2003, Itera had enough confidence in its prospects here to open
an expanded U.S. headquarters in Jacksonville, Fla. The company flew the
congressman down for the gala marking the event, according to his travel
records.

"I can think of no other company that represents what Russia is today and
offers for the future," the congressman said, according to a local news
report.

'Flying Saucer'

Karen Weldon said she found her second client, a Russian aerospace company,
through a family friend.

The friend was Philadelphia lawyer John J. Gallagher, who has worked with
her father to foster U.S.-Russian business ties.

Gallagher said he introduced Solutions to Saratov Aviation Plant in
December 2002, because the company needed help promoting its products in
the United States. One of its most promising creations was a drone that
could deliver supplies to war zones, a device the company sometimes called
its "flying saucer."

Karen Weldon, or her partner Sexton, in turn sparked Rep. Weldon's interest
in the company's technology, according to chief of staff Conallen.

A Saratov official recalled hearing from Rep. Weldon "quite unexpectedly"
in early January 2003. The congressman expressed "an acute interest" in the
unmanned vehicle, said company director Alexander Ermishin.

Weldon visited Saratov's plant later that month, accompanied by his
daughter, who by then was negotiating a deal to consult for the company,
according to Solutions' disclosure reports.

It was an official trip for Weldon, who had congressional business in
Russia and Austria. Karen Weldon's travel was paid through Solutions.

They each attended meetings with Ermishin and other company officials. The
congressman expressed enthusiasm about the saucer technology, Ermishin
said. Within weeks, Saratov sealed a contract with Solutions to promote the
company's products, according to foreign agent disclosure filings.

Ermishin described the congressman's assistance on the project as "really
invaluable." He declined to discuss why he hired Karen Weldon's firm.

According to the contract that Solutions filed with the Justice Department,
Saratov agreed to pay Solutions $20,000 a month with two contingencies: The
cash-strapped company did not have to start paying until Solutions
attracted new business. And Saratov would pay a 10% finder's fee if the
company "strikes a deal from a lead supplied" by Solutions.

After the Weldons returned from Russia, the congressman took steps to get a
deal going. He contacted the Naval Air Systems Command, or Navair, which is
based near Washington, about the Saratov saucer, Conallen said.

Robert Carullo, a Navair staff member, said Weldon asked him to arrange for
Ermishin to meet with Navair. The meeting took place in March. Solutions'
disclosure reports say the firm also helped set up the meeting.

Karen Weldon also helped arrange a follow-up meeting between Navair and
Saratov in Russia in September, disclosure reports show. At the conclusion
of that visit, Navair and Saratov signed a nonbinding letter of intent that
called for Navair to seek funding to develop the saucer technology and fly
a prototype by 2005. Ermishin said the technology needs between $10 million
and $14 million as initial capital.

John Fischer, Navair's director of research and engineering sciences, who
led the delegation to Saratov, said he was impressed with the company's
technology.

In an interview, Fischer credited Rep. Weldon for bringing Saratov to
Navair's attention, calling him "a very proactive member of Congress."

He said Weldon was looking for money for the project. "The money is a
sensitive question, but we are confident it will come," Fischer said.

Conallen said Weldon had not yet taken steps to get the funding authorized
by Congress.

Asked later about Karen Weldon's involvement, Navair provided a written
response saying that Fischer met with her twice during the discussions with
Saratov but did not realize she worked for the company.

"Dr. Fischer was aware that Ms. Weldon was Rep. Weldon's daughter, but he
was not aware that she had a business relationship with Saratov," the
response said. "She did not identify herself other than by her name, and
Dr. Fisher [sic] assumed her to be doing staff work for Congressman
Weldon."

Solutions' attorney, Joseph M. Fioravanti, on Thursday said the firm's
finder's fee was eliminated under a new contract with Saratov signed in
November. That contract was transferred to a new firm that Sexton and Karen
Weldon formed last year. Fioravanti declined to provide more information on
the new firm, Solutions Worldwide Inc. He said Saratov began paying the new
firm $20,000 a month in December.

At least four laws prohibit companies that receive federal contracts from
paying contingency fees to lobbyists, according to Tom Susman, chairman of
the ethics committee of the American League of Lobbyists.

"We realized that with government contracts you're not supposed to get a
percent, so we revised it," Karen Weldon said. "We were worried that it
might look inappropriate."

A Family Affair

Clearing the Karic family name in the United States has become something of
a crusade for Rep. Weldon.

Their relationship dates to 1999, when he led a congressional delegation to
Vienna that tried to broker a deal to end the war between Yugoslavia and
the province of Kosovo.

By then, Milosevic's record of atrocities had been thoroughly documented.
NATO (news - web sites) had gone to war with the Belgrade regime, and U.S.
bombers had pounded the capital to force the Yugoslav leader to withdraw
from Kosovo.

In public statements about the trip, Weldon has said that he and his
colleagues met Dragomir Karic, who was introduced as a confidant of
Milosevic who could negotiate a deal with the United States. His brother,
Bogoljub, was a member of Milosevic's cabinet.

Weldon later told Congress that he had received a report on the Karics from
U.S. intelligence officials that said a family member had bankrolled
Milosevic's election, and that the family's bank had tried to finance a
missile sale to his regime.

Because of evidence that the Karics had supported Milosevic, the Treasury
Department (news - web sites) placed them on a list of Serbians banned from
doing business in the United States. They all had been removed from the
list by last year, as the United States normalized relations with Serbia,
but they still cannot get visas.

In a written statement, a spokesman for the Karics said, "Regarding the
alleged links of the Karic Group or family to the Milosevic regime, we can
only reiterate that these allegations are the product of groups or
individuals from our country who have been themselves profiting from ties
with the former regime."

Rep. Weldon came to adopt the view that the Karics, whose businesses
thrived under Milosevic, were being unfairly portrayed as sympathizers of
the former leader. "The story we get from the Karics is that Bogoljub was
from the pro-democracy side, and Milosevic said your life and business
depends on your working with me … and he did," Conallen said. "Curt
believes in these guys and that their support for Milosevic was the result
of innuendo and threat."

On Oct. 8, 2002, Weldon sent a letter to Dragomir Karic inviting him to
Washington to discuss the "extensive humanitarian and charity projects"
sponsored by the family's Karic Foundation. The letter praised the Karics'
business group and commended it to "U.S. companies seeking to establish
business relationships in Serbia."

Weldon's invitation was signed by 18 colleagues. According to Conallen, it
was an effort to pressure the State Department to grant visas to the
Karics.

In March 2003, the Karic Foundation hired his daughter's firm on a
renewable one-year contract paying $240,000. In disclosure forms, Solutions
said it would assist the foundation in "establishing and developing a U.S.
presence."

"I did a proposal for them," Karen Weldon said. "I worked my butt off, and
they liked it."

The Karics' written statement said that they hired Solutions on the
strength of its proposal and that "no American member of Congress"
influenced their decision.

In August, Weldon led a congressional delegation to Serbia. An association
of Serbian businessmen headed by Bogoljub Karic helped plan the trip.

In November, Solutions paid for Conallen to travel to Belgrade. He said he
went on the invitation of Karen Weldon's partner, who received an honorary
degree from a private university owned by the Karics. While there, Conallen
said he met with U.S. Embassy officials to discuss the Karics' visa
problem. His airfare, lodging and meals came to $2,403.30.

Conallen said he did not know at the time that Solutions represented the
Karics. He said he consulted the House Ethics Committee after The Times
raised questions about the payment and was told that he needed to reimburse
Solutions. He said he has done so.

In December, Conallen said he called State Department officials again about
the Karics. He appeals so frequently on behalf of the Karics, he said, that
State Department officials know why he's calling without asking.

The Karic brothers sent Weldon a letter Jan. 13 to thank him for his
support and assure him of their "lasting friendship." The letter requested
a meeting with intelligence officials "in the hope that this will finally
clear our good name."

Weldon delivered the Karics' request to the CIA. Conallen said the
congressman has not heard anything from the agency. The CIA declined
comment.

Weldon invited the Karics to the National Prayer Breakfast on Feb. 5. Since
the State Department would not grant them visas, they were unable to
attend. The congressman's efforts for the Karics, Conallen said,
are "ongoing."

So are Karen Weldon's efforts for the Karics and their foundation. "It's
one of my main projects," she said two weeks ago.

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