Posted on 07/05/2003 6:51:30 AM PDT by gorush
The Bureau Is Investigating A National Fund-raising Group's Dealings In Wisconsin.
Wisconsin State Journal :: FRONT :: A1 Friday, July 4, 2003 Phil Brinkman State government reporter Federal authorities are investigating a national Democratic fund-raising group's dealings in Wisconsin, including whether the group broke U.S. money-laundering laws by helping former Senate Majority Leader Chuck Chvala evade state campaign finance laws, The Washington Post reported Thursday. Assistant Milwaukee County District Attorney David Feiss confirmed he discussed with the FBI allegations that Chvala helped direct political contributions to the Washington, D.C.-based Democratic Legislative Campaign Committee.
In turn, the committee, which promotes Democratic control of state legislatures, spent hundreds of thousands of dollars to back Wisconsin Democrats for state office. The allegations are part of a 19-count criminal complaint filed against the Madison Democrat last fall.
The Post quoted FBI officials saying an inquiry into the DLCC is under way in Wisconsin and Maryland, where the focus appears to be on the organization's chairman, Thomas V. Mike Miller Jr.
Miller, president of the Maryland Senate, allegedly solicited donations for the group from interests with business before that state's legislature, and may have helped steer money to legislative candidates from other groups to get around local campaign finance limits, The Post said.
Miller has not been charged with any crime, although the allegations, which include raising campaign donations from his State House office, bear striking resemblance to the charges against Chvala.
Feiss said he didn't know the extent of the FBI inquiry in Wisconsin but said he didn't believe Chvala was its focus. State FBI officials qualified to comment on the inquiry were unavailable Thursday. Chvala's attorney, James Olson, also couldn't be reached.
"During our investigation there were monies that went from the state of Wisconsin to other states and there were monies that came back from other states to the state of Wisconsin," Feiss said, explaining why the case was referred to the FBI. "As a practical matter, we have no ability to investigate what's going on in other states, and the FBI does."
The state's case is being prosecuted by Milwaukee County authorities after Dane County District Attorney Brian Blanchard bowed out citing a potential conflict of interest.
Chvala, 48, was charged in October with extortion, misconduct in office and filing false campaign statements. He has denied the allegations.
Among other things, prosecutors allege Chvala demanded campaign contributions from lobbyists in exchange for favorable treatment on legislation, used state staff and resources to run campaigns and hid from state election authorities his control of ostensibly "independent" political groups.
One of those groups, Independent Citizens for Democracy, received $292,000 from the DLCC in the fall of 2000. That same year, the committee gave $311,500 to the Wisconsin Voter Education Fund, created to support state Assembly Democrats, although the complaint does not tie Chvala to that group.
Prosecutors say the payments were part of a reciprocal arrangement with the DLCC and other out-of-state committees to disguise the source of political contributions. Chvala allegedly told donors they could keep their political contributions "under the radar" by sending them "across the Potomac" to the DLCC, the complaint said.
The secrecy was needed, prosecutors say, because state law limits how much any one individual may give to political candidates and bans corporate contributions to state candidates.
But money from individuals, unions and corporations flowed freely to the DLCC, according to reports filed with the Internal Revenue Service. Since July 2000, individuals and corporations in Wisconsin sent $1.23 million to the group.
Because the DLCC does not raise money for federal candidates, it only has to report campaign finance activity in the states in which it spends money. That makes tracking the dollars exceedingly difficult, say advocates of campaign finance reform.
For example, in its reports filed with the Wisconsin Elections Board, the DLCC does not list any corporate contributions from the state because such funds can't be spent here. But reports filed in California or Florida, where such donations are allowed, show multiple donations by Wisconsin corporations.
"The DLCC is a money-laundering operation, pure and simple," said Mike McCabe, executive director of the Wisconsin Democracy Campaign.
Last year, the DLCC reported spending just $4,000 in Wisconsin to support another independent group, Citizens for Clean and Responsible Government, which helped unseat former Republican Rep. Rick Skindrud of Mount Horeb.
McCabe said the falloff reflects a trend by the DLCC and other groups increasingly to funnel money toward so-called "issue advocacy" groups, unregulated political groups that don't expressly advocate the election or defeat of a candidate.
In a statement to The Post, DLCC executive director Michael Davies said, "At all times, the DLCC has complied with the law when raising and spending its funds. The DLCC is aware of no credible suggestion to the contrary."
Apparently he doesn't think the criminal complaints suggesting they are dirty will have much affect on contributions from Wisconsin.
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