WASHINGTON – A small group of lobbyists and defense contractors doing business with the House Appropriations Committee has endowed a political fund run by the stepdaughter of the committee's chairman, Rep. Jerry Lewis.

About a third of the $113,700 that Julia Willis-Leon has raised through her Small Biz Tech PAC has gone to pay her salary and expenses. Political action committees, or PACs, are a legal way for people, businesses and other organizations to give money to political candidates. Willis-Leon's 16-month-old PAC has given $15,600 to candidates. Meanwhile, it has paid her more than double that amount – $37,420.

Campaign finance records show Willis-Leon received $2,000 to $5,225 per month in fundraising fees and commissions.

Willis-Leon, 44, denied wrongdoing.

“Everything has been disclosed; there's nothing to hide,” she said Tuesday night in a telephone interview from her home in Las Vegas.

But political watchdog groups decried the arrangement as a stealthy way to curry favor with Lewis.

Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, D.C., said the arrangement might be legal, but it's “completely outrageous and it's completely unethical. Members are not supposed to be using their positions to enrich their family.”

Federal investigators have been issuing subpoenas as part of an investigation into whether Lewis benefited improperly from the flow of federal money he has directed to contractors and a host of schools and agencies concentrated in his district. Lewis, a Redlands Republican, has denied any wrongdoing.

Willis-Leon said she runs the PAC from her home in Las Vegas, but the street address listed on its Web site is a three-story, million-dollar Capitol Hill townhouse co-owned by a lobbyist and a defense contractor, both with ties to her stepfather, Lewis.

The lobbyist is former Lewis staffer Letitia White, and the contractor is one of her clients, Trident Systems founder and president Nicholas Karangelen. Virginia-based Trident has received millions of dollars in earmarked funds controlled by the Appropriations Committee, and White is one of the company's key lobbyists. The company provides hardware and software systems to military and commercial clients.

Of the $113,700 raised by Willis-Leon's PAC, $46,000 came from White, her husband Richard, and small defense contractors represented by her lobbying firm, Copeland, Jacquez, Lowery, Denton & White.

One of the lobbying firm's partners, former Rep. Bill Lowery, specializes in getting earmarks from the Appropriations Committee. Lowery, a Republican who represented a San Diego district and once served with Lewis on the Appropriations Committee, is a close friend of Lewis and has a long list of clients who pay his firm millions of dollars to help them get government contracts.

When White worked for Lewis, her principal duty was to screen earmark requests. She left the post in 2003 and immediately went to work as a lobbyist with Lowery. Since then, her clients have gotten tens of millions of dollars in earmarks from the Appropriations Committee. In the three years she has represented Trident, her firm has billed the company $340,000, according to federal disclosure records.

Small Biz Tech PAC was registered with the Federal Election Commission in February 2005, one month after Lewis became chairman of the Appropriations Committee.

While congressional ethics rules put a $50 cap on gifts to members of Congress, there is no similar cap for their relatives. Nor is there a rule against lawmakers using campaign funds to pay spouses or other relatives, as long as those relatives are paid a reasonable fee for legitimate services.

A spokesman for Lewis had no comment yesterday about his stepdaughter's PAC. The spokesman for Lowery and White's lobbying firm did not return phone calls.

But campaign finance watchdog groups criticized the payments to Lewis' stepdaughter from lobbyists and contractors seeking money from the Appropriations Committee.

“I'm shocked by this,” said Keith Ashdown of Taxpayers for Common Sense. “They put the daughter of the House's most powerful appropriator on their payroll.”

Willis-Leon is the daughter of Arlene Lewis, who is Lewis' wife and his chief of staff.

Willis-Leon said the PAC was founded to advocate for small businesses, which frequently complain that the federal procurement bureaucracy ignores them in favor of large contractors.

She said she travels “very rarely” to Washington. Though the PAC Web site gives its address as the home owned by White and Karangelen, Willis-Leon said the PAC used the address only in its initial stages and maintains no office there.

Yesterday, after a series of questions was faxed to her at her request, Willis-Leon told a reporter, “I've been advised not to talk to you.”

Federal investigators last month began looking into the relationship between Lewis and Lowery and White's lobbying firm, which has raised hundreds of thousands of dollars for Lewis' campaigns while representing clients that have received hundreds of millions of dollars in earmarked funds.

Most of the earmarked money came from the Defense Department budget, which Lewis oversaw from 1999 to 2005 as chairman of the Defense Appropriations Subcommittee.

In March last year, Lewis addressed a luncheon held by the PAC, whose Web site says his comments reflected “his 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.”

White and Karangelen purchased the Capitol Hill townhouse that serves as the home of record for the PAC in December 2003 for $1 million.

The three-story yellow clapboard structure with dark green trim is directly behind the Library of Congress and within easy walking distance of every congressional office.

Union-Tribune researcher Erin Hobbs contributed to this report.