NYSun: FBI investigation into Sen. Clinton campaign

It'll be interesting to see how/if this story gets picked up by the Times, Post, etc.

http://www.nysun.com/article/12574

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Clinton Case Mystery

BY JOSH GERSTEIN
April 21, 2005

A Democratic fund-raiser involved in Senator Clinton's 2000 campaign has offered a guilty plea to bank fraud charges and is likely to become a government witness at the upcoming federal trial of a top finance aide to Mrs. Clinton, David Rosen, court records obtained by The New York Sun show.

As part of an FBI investigation into alleged campaign finance reporting violations by Mrs. Clinton's campaign, the mystery witness secretly taped a conversation with Mr. Rosen in September 2002 and apparently tried to elicit statements from the former Clinton staffer about financial irregularities involving an August 2000 Hollywood fund-raising event.

Allegedly inaccurate reports about that event filed with the Federal Election Commission led to Mr. Rosen's indictment on four counts of causing false statements to be made to federal authorities. One count was dropped by a judge last month, but Mr. Rosen is scheduled to go to trial on the remaining charges at Los Angeles on May 3.

In the documents reviewed by the Sun, the name of the FBI informant is not disclosed. However, the records offer intriguing clues that suggest the mystery witness operated at the highest echelon of Democratic politics.

"The CW [confidential witness] is related to an extremely prominent and well-known political figure. It can be expected that the fact that CW was working in an undercover capacity for the FBI will become the subject of intense media attention," prosecutor Peter Zeidenberg wrote in a November 2004 memo asking a federal magistrate to keep the relationship under wraps.

An affidavit filed by a Los Angeles-based FBI agent, David Smith, said the informant began working with the FBI in July 2002."The CW states that s/he is active in fundraising for the Democratic Party. CW assisted in the U.S. Senate campaign of Hillary Clinton. S/he was involved in the planning of the Clinton Gala," Mr. Smith wrote in January 2003. "The CW is the target of an FBI investigation on unrelated bank fraud charges. S/he has since signed a plea agreement, and has agreed to cooperate in this case."

Mr. Zeidenberg declined to comment for this story. Mr. Smith referred questions to an FBI spokeswoman.

A source familiar with the case said the reference to the informant being "related to" a famous politico means there is a familial tie. The source, who asked not to be identified, said the informant is not related to President or Mrs. Clinton.

While the informant's work for the FBI on Mr. Rosen's case dates back to 2002, the agency continued to work closely with the witness through the end of 2004, court documents indicate. The November 2004 filing indicates the FBI was planning to use the informant in an investigation of "a prominent political figure who may be involved in illegally soliciting foreign nationals to contribute to national political campaigns." The target of the inquiry was suspected of "funneling illegal campaign contributions from foreign nationals to individuals running for federal office."

There is no indication in the documents whether the "prominent political figure" who may have been soliciting illegal gifts from foreigners is the same person to whom the informant is related.

The same unidentified informant was also being asked to record phone calls with targets of an investigation into alleged political corruption in Louisiana, the court filing late last year said. That scheme involved a state senator and a "fraudulent contract worth five million dollars," prosecutors asserted.

At one point in the court papers, the informant is referred to as "he." The remainder of the references use a gender-neutral pronoun, "s/he."

Sources familiar with the case said Mr. Rosen's attorney, Paul Sandler of Baltimore, has known the identity of the mystery witness for weeks. In fact, as part of constitutionally mandated pre-trial discovery, Mr. Sandler was given a copy of the FBI's tape of the surreptitiously recorded conversation, a person with knowledge of the matter said.

Reached at his Chicago office, Mr. Rosen referred questions to Mr. Sandler. Mr. Sandler did not respond to several messages yesterday seeking comment for this story. Mrs. Clinton's attorney, David Kendall, could not be reached for comment. In the past, he has denied any wrongdoing by the campaign.

Two men who were involved in staging the costly and star-studded August 2000 fund-raiser for Mrs. Clinton, Peter Paul and Aaron Tonken, said yesterday they were baffled by the FBI's description of a person who was "involved in planning of the Clinton Gala" and related to a top political figure.

"I have no clue," said Tonken, who is serving a 63-month sentence on fraud charges stemming from celebrity charity fund-raisers he organized.

Paul, a thrice-convicted felon, has sued Mr. and Mrs. Clinton, alleging the former president and first lady took more than $2 million in illegal donations, misreported them, and failed to follow through on a deal that involved Mr. Clinton coming to work for Paul's now-defunct Internet company, Stan Lee Media.

Many of the statements the confidential witness solicited from Mr. Rosen and which are contained in the court papers do not appear particularly incriminating.

"It was exciting stuff that we did. That gala was exciting," Mr. Rosen is quoted as saying. "Lawsuit or no lawsuit, man ... that was the most amazing thing that we put together in three weeks."

According to the excerpts of the conversation, Mr. Rosen said, "I asked [Paul] how much he spent. He told me. We reported it. It's his, you know, people lie to me all the time. What am I suppose [sic] to do?"

The theory of the government's case is that by underreporting the costs of the event, the campaign maximized the amount of "hard money" raised and minimized the amount of "soft money." Under the laws then in effect, campaign officials generally preferred hard money, because it could be spent with fewer limitations.

Mr. Rosen indicated to the informant that the high event costs caused problems for the campaign. "You rarely wanna do fifty cents to raise a dollar," he is quoted as saying. "You have to pay the percentage out of the income. So we would have to move hard to soft. Not the other way around."

Mrs. Clinton's campaign has claimed that the August 2000 event cost about $600,000, up from lower figures in earlier reports. In the September 2002 recorded conversation, Mr. Rosen allegedly said, "We probably spent a million, which is 400,000 more."

The government filing also stated that Mr. Rosen said he could not be convicted because he was only a "staffer."

The court records do not indicate whether the informant who taped Mr. Rosen was ever asked to tape Mrs. Clinton. However, Tonken, who also claims to have worked as an FBI informant in the case, told the Sun he was asked by the FBI to tape phone conversations with Mrs. Clinton. The agent who made the request, Tonken said, was Mr. Smith, the same one who described the agency's relationship with the mystery witness.

 

ABBH! an excellent time was had- mc mark, thegary, batman, great to finally meet some of the guys from the bbs. perhaps next time the estogen souces will join in too.

 

bump...

i'm (not) surprised most of you have ignored this...really, no comment on an FBI investigation into the latest campaign by the most likely democratic nominee for 2008? applying the "new moon" standard, the investigation itself demonstrates conclusively that "a felony has been commited."

 

not that i don't appreciate the clever typography, but how exactly is this post, or thread, "hate-filled?"

 

article seems pretty even handed- it's a factual story on an on-going investigation. are you suggesting the investigation itself was trumped up by karl rove to protect Jeb's interests in '08?

 

Here's an update, w/ a possible id on the CW:

http://www.nysun.com/article/12645

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A Kennedy Relative Acted as Informant in Democrat Circles

BY JOSH GERSTEIN - Staff Reporter of the Sun
April 22, 2005


A New Orleans political consultant who is Senator Kennedy's brother-in-law, Raymond Reggie, has been operating in Democratic circles for the last three years as an undercover informant for the FBI, sources close to the matter said yesterday.

At a federal court hearing yesterday morning, Reggie, 43, who organized fund-raisers for President and Mrs. Clinton, pleaded guilty to two felony charges, bank fraud and conspiracy. Prosecutors described check-kiting and loan fraud schemes he operated involving three Louisiana banks, but they did not publicly detail his cooperation with the government.

The New York Sun reported yesterday that an unnamed witness with ties to a prominent political figure has been involved in recent federal investigations of campaign fund-raising violations, including a probe into alleged financial misreporting in Mrs. Clinton's bid for the Senate in 2000. The informant, described in court papers only as a "confidential witness," was part of an FBI plan to secretly audiotape conversations with political operatives, including a well-known person who prosecutors said was seeking to funnel donations from foreigners to federal campaigns.

Several people with knowledge of the case identified Reggie as the informant described in the Sun article.

In a brief interview, the first assistant U.S. Attorney in New Orleans, Jan Mann, said of the Sun story, "I wasn't sure if anybody made any of these connections yet or not." She declined to describe the investigations in which Reggie helped the government. "We're not handling anything outside of the case on Ray Reggie, so it certainly wouldn't be in my realm to talk about anything else," she said.

Reggie's lawyer, Michael Ellis, declined to comment for this article.

The disclosure that Reggie was surreptitiously recording conversations for the FBI may have caused some heartburn yesterday for Democrats who have had contact with him since 2002.

Reggie was a regular presence at Mr. Clinton's side when he visited New Orleans during his presidency and thereafter. Just last September, Mr. Clinton had lunch in that city with Reggie, as the former president swung through town to sign his autobiography and attend a $10,000-a-head Democratic Party fund-raiser, the Times-Picayune newspaper reported. A former congresswoman and ambassador to the Vatican, Lindy Boggs, joined Reggie and Mr. Clinton at the lunch, as did two federal judges whom Mr. Clinton appointed.

When Mrs. Clinton traveled to New Orleans in May 2000 to raise $100,000 for her Senate campaign, Reggie was on the host committee.

An attorney for the Clintons, David Kendall, had no immediate response yesterday to questions about Reggie's role in Mrs. Clinton's Senate campaign or about the possibility that Reggie might have taped one or both of the Clintons.

Reggie is expected to be a witness in a federal criminal case involving a finance official on Mrs. Clinton's campaign staff, David Rosen. In a trial scheduled to start at Los Angeles on May 3, Mr. Rosen, 40, faces charges that he caused false donation and expenditure reports to be filed with the Federal Election Commission in connection with a fund-raising gala at Hollywood in August 2000.

Court documents indicate that in September 2002, a confidential witness, identified by other sources as Reggie, taped an unwitting Mr. Rosen in a conversation discussing his role in the 2000 gala. In an affidavit submitted to a federal magistrate, an FBI agent asserted that the informant "was involved in the planning of the Clinton Gala."

In June 2000, Reggie and his wife, Mary Michelle, were guests at a state dinner. They also stayed overnight at the White House as guests of the Clintons.

Mr. Rosen's defense attorney, Paul Sandler of Baltimore, refused to comment yesterday on the disclosure of Reggie's role as an informant or on what impact his secret recording might have on Mr. Rosen's case. "I have nothing to say. I'm getting ready for trial in 10 days," Mr. Sandler said.

A former Internet executive who helped organize the August 12, 2000, Hollywood fund-raiser, Peter Paul, said in an interview last night that he was certain Reggie was not a key player in the gala. "If he had a role, it was a very, very small role," Paul said.

However, campaign finance records provide some indication that Reggie might have at least attended the fundraiser for Mrs. Clinton at a radio's executive's mansion in the Brentwood hills of Los Angeles.

On August 28, 2000, the committee that officially sponsored the event, New York Senate 2000, recorded a donation from Reggie of $1,330.

Reggie took out a full-page ad in a "tribute book" distributed to guests at the gala. "You have demonstrated as the president and first lady of the United States that you were willing to 'pay any price, bear any burden, meet any hardship, support any friend, oppose any foe, in order to assure the survival and the success of liberty,'" the ad read. It was signed, "With gratitude, Ray Reggie."

On separate occasions, Reggie gave another $6,000 to committees connected with Mrs. Clinton's campaign. Overall, Reggie gave about $29,000 to Democratic candidates over the past six years, Federal Election Commission filings show. Reggie also served on the national finance committee for Vice President Gore's presidential bid in 2000, according to a New Orleans publication, cityBusiness.

Reggie's sister, Victoria, is married to Senator Kennedy of Massachusetts. A spokeswoman for Mr. Kennedy did not return several phone calls yesterday seeking comment for this story. Reggie is also the son of a prominent Louisiana judge, Edmund Reggie, who was a close friend of President Kennedy.

The younger Reggie is close to and has done consulting work for the former mayor of New Orleans, Marc Morial. Press reports in Louisiana have suggested that prosecutors' interest in Reggie may have stemmed from a desire to get information from inside Mr. Morial's inner circle. Mr. Morial has not been charged with any crime.

The bank-fraud charges against the Reggie date to 2001 and earlier. Court records indicate his plea deal with the government was reached in 2002. However, the charges were not filed publicly until February of this year.

Reggie, who ran an advertising buying and consulting firm known as Media Direct, has admitted to using a forged contract with the Census Department to obtain a $6 million line of credit from a Louisiana bank. At the hearing yesterday, he acknowledged using that line of credit to cover a check-kiting scheme at two other banks. One bank lost $3.5 million, court papers said. His sentencing was set for October 23. The maximum penalty on the two charges is 35 years in prison and a fine of up to $1.25 million.

Reggie also faces a separate, unrelated state trial in Louisiana next month for allegedly impersonating a police officer. The felony charge stems from a 2002 incident in which Reggie allegedly used a blue light to stop another vehicle.

"He pulls over a car full of young girls, tells them he's a cop; and wants one of them to get out; tried to get them to follow him somewhere," the prosecutor handling the case, Kim McElwee, said in an interview.

Ms. McElwee complained that she has had great difficulty obtaining routine evidence for the case. "I've never had a case quite like this," she said. "People say they have a document. I call back. Not only is the document gone, they're gone. It's bizarre."

Reggie, who has maintained his innocence, has waived his right to a jury trial. Ms. McElwee said the judge will probably acquit Reggie. "I'm getting entertainment out of this. I'm certainly not going to get a conviction," she said.