Posted on 07/04/2003 5:47:39 AM PDT by ninenot
The FBI is investigating whether two political committees that prosecutors link to state Sen. Chuck Chvala violated federal money laundering laws. According to a criminal complaint filed last year, here is one example of how Chvala is accused of skirting state campaign finance laws:
Chvala told lobbyist Bill Broydrick to have his clients contribute money to the Democratic Legislative Campaign Committee in Washington, D.C.The DLCC then funneled money back to a phony independent group in Wisconsin called Independent Citizens for Democracy Inc. Chvala is accused of creating and controlling that group.That group spent more than $800,000 during the 2000 campaign on ads in three key state Senate races that helped the Democrats maintain control of the Senate.
"There is an ongoing investigation," Monica Shipley, spokeswoman for the FBI's Milwaukee office, said Thursday.
The probe centers on allegations that Chvala controlled a phony independent campaign group that skirted state campaign finance laws by funneling contributions out of Wisconsin.
That accusation is part of the lengthy criminal complaint filed last year against Chvala as part of the investigation into political corruption in Madison. Chvala is charged with 19 felonies accusing him of extortion, misconduct in public office and filing false reports with the state Elections Board. He has repeatedly professed his innocence.
The new federal inquiry began when Milwaukee County Assistant District Attorney David Feiss, special prosecutor on the case, found some irregularities that crossed state lines.
"During the course of our investigation, we discovered money that was going to entities outside the state of Wisconsin," Feiss said Thursday. "We had no authority to investigate those entities and subsequently referred them to federal authorities."
Neither Shipley nor Feiss would say whether federal charges against Chvala (D-Madison) are imminent. Chvala's office referred questions about the investigation to his lawyer, James Olson. Messages left for Olson were not returned Thursday.
Money laundering is a federal felony punishable by up to 20 years in prison.
The out-of-state entities brought to prosecutors' attention were the Democratic Legislative Campaign Committee, based in Washington, D.C., and the Kansas Democratic Party, Feiss said.
The 67-page criminal complaint against Chvala filed by Feiss in October details transactions by those groups, which received money from Wisconsin businesses and then - with Chvala's help - funneled it back to Wisconsin. If true, such transactions are illegal because Wisconsin law prohibits corporate contributions to candidates and political parties.
According to the complaint, Chvala, former Senate majority leader, asked lobbyist Bill Broydrick for donations from his clients and told him where to send the money. Broydrick sometimes delivered contribution checks personally to Chvala to be forwarded to groups, including the Democratic Legislative Campaign Committee, the complaint says.
At a John Doe hearing about the matter, Broydrick described that committee and others favored by Chvala as "laundromats." He told prosecutors "money goes through a washing machine, and it comes out clean," according to the complaint.
The complaint also details donations from Madison Gas and Electric Co. to the Kansas Democratic Party. Mark Williamson, former lobbyist for the group, said Chvala told him that's where the utility's contributions should go. In turn, Kansas Democrats sent the money to Independent Citizens for Democracy Inc. in Wisconsin.
Prosecutors allege the group was not independent at all, but rather controlled by Chvala as part of a scheme to conceal donations by companies and donations that exceeded state limits. They also say Chvala created the group in 1999 and controlled it through Doug Burnett, his chief of staff.
The group spent more than $800,000 during the 2000 campaign on ads, either promoting Democrats or denouncing Republicans. Virtually all of it was spent on three key U.S. Senate races that, at the time, helped maintain a Democratic majority in the Senate.
"The allegations in the criminal complaint are that (Chvala) advised individuals that he would, in effect, get credit and that those types of donations would be helpful," Feiss said Thursday.
The FBI investigation was first reported in Thursday's editions of The Washington Post, which also said the FBI is investigating the chairman of the Democratic Legislative Campaign Committee, Maryland Senate President Thomas V. Mike Miller Jr.
Miller told The Washington Post he knew nothing about the committee's operations in Wisconsin.
Jay Heck, executive director of Common Cause in Wisconsin, said the federal investigation shows that the state Capitol campaign finance scandal that erupted in 2001 is far from over.
Chvala is just one target of the investigation. Former Sen. Brian Burke, a Milwaukee Democrat, has been charged with 18 felonies. Republican state Reps. Scott Jensen and Steven Foti and former Foti aide Sherry Schultz face felony charges of misconduct in public office. And GOP Rep. Bonnie Ladwig has been charged with a misdemeanor accusing her of misusing her public position for the private gain of a campaign committee.
All have pleaded not guilty.
"The fact that this is now part of a criminal investigation by the FBI is significant and certainly long overdue," Heck said. "The money has been flowing in through various channels for the last four election cycles."
As early as 1996, Heck said, there were transfers of money into Wisconsin races, and no one has ever been able to track their origin.
"The DLCC has cast a cloud over Wisconsin for years," Heck said. "It was an enterprise that was a wholly owned subsidiary of the Democratic National Committee. It created pots of money no one could ever find the source of."
News of an FBI probe also shows that the scandal, which has been fought out in recent months through procedural motions in the courts, has a new dimension, he added.
"It demonstrates that the investigation is alive and ongoing," Heck said. "The FBI needs to get to the bottom of this matter."
Dennis Chaptman of the Journal Sentinel staff, reporting from Madison, contributed to this report.
The Wisconsin sludge spreads out.
Bill Clinton, Where are You?...Who would have guessed?..More Corruption..I know both parties...but, the vast Majority are 'RATs.
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