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Congressional Hopeful Hit With Fine

May 27, 1998 GMT

WASHINGTON (AP) _ A Long Island lawyer who twice ran unsuccessfully for Congress has agreed to pay a $280,000 fine, among the largest penalties ever imposed by the Federal Election Commission, for accepting illegal amounts of campaign money from his family, then lying about it.

Grant Lally, a Republican who tried to unseat Rep. Gary Ackerman, D-N.Y., admitted receiving hundreds of thousands of dollars in campaign contributions from his father and law partner, attorney Lawrence Lally, and falsely reporting it.

The FEC has imposed only two penalties larger than Lally’s civil penalty, to be paid by him and his parents.

``Knowing and willful is the most egregious sin we have, and he admitted to that,″ said FEC spokesman Ron Harris.

An aggressive campaigner, Lally challenged Ackerman in 1994 and again in 1996. He accused the incumbent of a number of sins, among them accepting campaign money from organized crime.

Ackerman said Wednesday he feels vindicated by the FEC’s finding and the huge fine. ``They were trying to buy one of these congressional seats,″ Ackerman said.

Ackerman and Allan Binder, Lally’s opponent in the 1994 GOP primary, had long complained about Lally’s fund raising. The FEC looked into the complaints only after Ackerman and the Democratic Congressional Campaign Committee sued the commission for its inaction.

Despite admitting he ``knowingly and willfully″ accepted too much money and lied about it, Lally said he did nothing wrong and agreed to settle only to avoid a court battle with the FEC.

``Essentially it was a business decision,″ he said in a telephone interview. ``The alternative was to spend a lot of time and a lot of money litigating with them.″

The FEC, he complained, took a ``very, very aggressive stand, and they conducted themselves like gangsters in the way they handled this.″

He alleged that FEC investigators contacted his 92-year-old grandmother at her home in Florida and threatened to jail her if she failed to cooperate with them.

The FEC denied the allegation.

``I have never _ in my five years here _ never heard any complaint that we’ve intimidated, harassed or otherwise hassled people,″ commission spokesman Harris said.

According to the settlement, Grant Lally accepted numerous large checks from his father and funneled the money into his campaign treasury as ``personal funds.″

While candidates can pour as much of their own money into their campaigns as they wish, they can accept only $2,000 from individual donors, including parents, during an election cycle.

In one instance, Lawrence Lally gave $116,000 to his son for his campaign and recorded the transaction as a real-estate sale. Lally received another $18,000 from his father, contending it was for the purchase of his Corvette.

In signing the agreement, Lally acknowledged the ``knowing and willful nature of these violations.″