Fundraiser Says He Trusted Hosts' Figures

By Amy Argetsinger
Washington Post Staff Writer
Wednesday, May 25, 2005

LOS ANGELES, May 24 -- By the time he was in his early thirties, Democratic fundraiser-on-the-rise David F. Rosen had overseen numerous coffees, dinners and cocktail parties hosted by the wealthy party faithful. Yet no event, he testified Tuesday in federal court here, was nearly as big or elaborate as the star-studded gala for Hillary Rodham Clinton in August 2000.

More than a thousand people were invited to the party at a posh Brentwood estate, including Brad Pitt and Whoopi Goldberg, with Stevie Wonder and Cher performing on a specially constructed stage. Guests went home with deluxe gift bags and souvenir chairs.

But Rosen, serving as national finance director for the then-first lady who was running for the Senate from New York, said he had no history to help him gauge how much such a high-flying event should cost. Following the custom in fundraising, Rosen testified, he simply took the words of the hosts -- and only much later, he insisted, learned they had understated their expenses by $800,000.

"These costs were hidden from me," he said as he took the stand in his defense in the third week of his federal trial on charges of lying in financial statements submitted to the Federal Election Commission. "These costs were concealed for whatever reason by the people putting on this event . . . and I can't imagine why."

Clinton has not been implicated in the case, but her conservative opponents are following it closely and charge that she should be investigated by the Senate Select Committee on Ethics.

Prosecutors allege that Rosen understated the costs of the event, which nearly exceeded the amount raised, to avoid embarrassing the Clinton campaign and to keep from being fired. Although the costs were covered by the hosts, such "in kind" donations weigh against the amount a campaign can spend in unrestricted funds on advertising and other expenses under federal campaign finance rules.

Rosen, though, says he was misled about the gala's true costs of more than $1.1 million by the sponsors -- entrepreneurs Peter Paul and Aaron Tonken, who at the time were trying to make a splash for their Internet startup venture with "Spider-Man" creator Stan Lee.

Paul has since been convicted of defrauding investors in the now bankrupt company, while Tonken is serving a five-year prison term for defrauding charities he represented. Neither man has been called to testify.

Rosen, who faces 15 years in prison and a fine of $750,000 if convicted, described how he worked his way through college selling reference books door to door before getting a foothold in Democratic politics and rising through a variety of fundraising jobs.

He denied accounts, offered by former associates in testimony last week, that he had expressed anxiety about the gala's rising costs or plotted to conceal the final budget figures.

Rosen also denied that he had felt concern about his job security with the campaign. Under cross-examination, though, he acknowledged that an under-attended fundraiser two weeks earlier at the Waldorf hotel in New York City was "a financial disaster." Prosecutor Peter R. Zeidenberg quizzed Rosen about a Chicago event at which Tonken arranged for singer Olivia Newton-John to perform. He asked why Rosen never reported her travel costs as an in-kind donation.

"I really thought Olivia Newton-John was contributing her time," Rosen said.

© 2005 The Washington Post Company