O’Donnell campaign to resubmit finance reports

February 25, 2011

Former U.S. Senate candidate Christine O’Donnell’s campaign has promised a top-to-bottom review of its books and will resubmit financial reports to the Federal Election Commission, according to a letter from her attorney released Wednesday.

The letter follows recent allegations: Two former staff members have accused the Delaware Republican of using campaign funds to pay her rent and other personal expenses. A Washington ethics watchdog filed a complaint to the FEC seeking an investigation into the matter, and law enforcement sources said last week that the U.S. attorney in Delaware was looking into the case.

O’Donnell rose to national political prominence after her upset of former Republican representative Michael N. Castle in the Delaware Senate primary, a victory attributed to her strong backing from the tea party. She clashed with more traditional GOP figures and spent the beginning of her general election campaign explaining past controversial statements, including that she once “dabbled into witchcraft.” She lost to Democrat Chris Coons in November.

But the government faces tough odds in any investigation into her campaign finances.

The FEC traditionally has given candidates wide latitude in determining what constitutes a campaign expense. In one recent advisory opinion, for example, the commission found that it was permissible for a candidate to install a security system in his home using campaign funds.

And in O’Donnell’s case, the amount of money in question is relatively small: $20,000.

A criminal probe would face an even higher burden of proof, requiring a finding that the violation was knowing and willful.

The issue began during O’Donnell’s 2008 Senate race against then-Sen. Joseph R. Biden Jr., who handily won even as he was running on the presidential ticket with Barack Obama. O’Donnell was facing foreclosure of her home and turned to her then-boyfriend, Brent Vasher, according to the complaint from Citizens for Responsibility and Ethics in Washington.

Vasher bought O’Donnell’s home and began renting it back to her, according to a signed statement included in the complaint from former campaign volunteer David Keegan, who is Vasher’s uncle.

In March and April 2009, her Senate campaign committee made two $750 payments to Vasher. The campaign classified them as “expense reimbursements,” but Keegan said in his statement that they were for rent.

O’Donnell has said the allegations that she misused campaign funds are politically motivated, and her office has dismissed Keegan’s statements that the money was for rent.

Other campaign expenses have also raised questions because of their timing. Between the end of O’Donnell’s 2008 Senate campaign and her candidacy for the race in 2010, she used campaign funds to purchase gas and meals. The expenses include a $19 payment to the Pike Lanes bowling alley in suburban Philadelphia, which was classified in campaign reports as a “travel expense.”

O’Donnell later moved into a townhouse she shared with a campaign worker. She used campaign funds to pay half her rent there, according to statements she made to the Wilmington News Journal.

A new treasurer joined the campaign in April 2009 but quit in July, the day before the campaign was required to file a report for the second quarter. It did not file a report covering that period for another six months. When it was filed, it was signed by the candidate and not a treasurer, as is usually the case.

Of the allegations, the question of whether O’Donnell used campaign funds for rent could be the most serious. In 1995, Congress passed laws banning the use of campaign funds for personal expenses, and the election commission has said a campaign cannot pay for a candidate’s rent or mortgage under any circumstance.

“Whether there’s an FEC violation turns on some very specific facts,” said Jason Torchinsky, a Republican campaign lawyer with the Holtzman Vogel law firm in Washington. “It brings up these issues of what exactly was she renting and what was her residence and what was not.”

O’Donnell’s campaign attorney said in the letter released this week that the campaign would “hopefully” file amended financial reports by the next filing deadline of Jan. 31.

O’Donnell responded to news of the federal probe by saying it is part of a plot by officials from both parties, including Biden, who held the Delaware Senate seat for several decades.

“This is simply an establishment trick to stop the anti-establishment tea party movement in its tracks,” O’Donnell said in a statement. “Heck, the Presidency is at stake in 2012.”

In the meantime, O’Donnell has signed a book deal and shown a desire to continue her political career, launching a political action committee to encourage nontraditional candidates.

farnamt@washpost.com

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