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Bush Administration Offical Pleads Guilty to Tax Evasion

By Ronald J. Ostrow
and Ray Delgado
Los Angeles Times

Catalina Vasquez Villalpando, U.S. Treasurer during the Bush administration, pleaded guilty Thursday to evading federal income taxes, obstructing an independent counsel's corruption investigation and conspiring to conceal financial links with her former company.

Villalpando, whose name is still printed on all paper currency, admitted she committed the crimes as charged by prosecutors for the Justice Department and Arlin M. Adams, the Independent Counsel investigating corruption at the Housing and Urban Development Department during the Reagan administration.

She faces maximum punishment of 15 years in prison and fines of $750,000. But as a first-time offender, she is likely to draw substantially lighter punishment, particularly if she cooperates with prosecutors in their continuing investigations.

As Treasurer from December 1989 until Bush left office, Villalpando oversaw the Bureau of Engraving and Printing and the U.S. Mint and promoted the sale of U.S. Savings bonds. In addition, she often was cited by Bush administration officials as evidence of their interest in elevating minorities, in her case Latinas.

President Clinton's nominee for Treasurer, Mary Ellen Withrow, will be sworn in March 1, a Treasury Department spokeswoman said. Withrow's name will replace Villalpando's on all new U.S. bills later in the month.

Villalpando displayed no emotion as she pleaded guilty in U.S. District Court and assured Judge Thomas F. Hogan that she understood the gravity of the offenses and the terms of the plea agreements.

Outside the courtroom, she said in a written statement: "While devoting all my attention and energies to the demands of my public office, I neglected to attend some personal matter with the care and immediacy they required."

Describing her court appearance as "a most painful and sad day for me," Villalpando said she accepted "full responsibility for my mistakes" and that her admission "marks the first step in what I understand will be a long journey back."

Hogan allowed Villalpando to remain free until sentencing, but did not set a date for the proceeding because of the pending investigation, in which her cooperation is being sought. She is due back in court May 17 for a status report on the case.

She admitted evading payment of $47,013 in additional federal income tax for 1989 by failing to report $167,901 in taxable income for that year. The payment should have been made during the first year she served as U.S. Treasurer, according to the Justice Department.

Villalpando also admitted to conspiring to conceal from the Treasury Department, the Office of Government Ethics, the Senate Finance Committee and the full Senate her receipt in 1989 and 1990 of substantial funds and benefits from a Georgia-based telecommunications firm where she was a senior vice president and director.

The company, Communications International, Inc., headquartered in Norcross, Ga., was awarded federal government contracts after being approved by the Small Business Administration as a minority-owned small and disadvantaged business.

The facts she withheld "were capable of influencing the actions and judgments of those departments and agencies" on her fitness for office, according to the conspiracy charge.

Government employees are not allowed to receive payment or benefits from private companies. Her compensation included a $250,000 "severence bonus," life and auto insurance, and payment of credit card and telephone charges.