By John Solomon and Matthew Mosk
Washington Post Staff Writers
Thursday, September 20, 2007
A list of the donors who have "bundled" large sums from dozens of individuals to give to Hillary Rodham Clinton's presidential campaign includes several figures who were involved in the 1990s Democratic Party fundraising scandal that tarnished her husband's record.
Among them is an Oklahoma oilman who testified in the mid-1990s that the firm he worked for, owned by Democratic fundraisers, sought to curry favor with Bill Clinton's administration by providing payments and a golf club membership to a Cabinet secretary's son.
Democrat John Edwards's list of bundlers includes well-known fellow trial lawyer William S. Lerach, who raised $80,000 from his family and law firm partners for the candidate after a government probe had begun of Lerach's wrongdoing, campaign aides confirmed yesterday. Lerach pleaded guilty this week to a conspiracy charge, prompting Edwards to announce that he will give back Lerach's personal donations but not the money Lerach raised from others.
A close look at donors who have collected large sums from hundreds of people to give to the presidential candidates makes it clear that Norman Hsu, the convicted thief who attracted attention last month for donating $850,000 to Hillary Clinton, is far from the only controversial figure to play a major fundraising role in campaigns.
Republican Mitt Romney's list of bundlers until recently included Alan Fabian, who was charged in a 23-count indictment last month alleging mail fraud, money laundering, bankruptcy fraud, perjury and obstruction of justice, according to the U.S. Attorney's Office in Baltimore. Fabian's lawyer, David B. Irwin, has declined to comment about the merits of the case but told The Post last month: "We are hoping for an early resolution of the matter."
Most other candidates have not yet released lists of bundlers, although virtually all have pledged to inspect fundraisers' backgrounds more closely than in past presidential races.
They face competing pressures, however. With more than a quarter of a billion dollars raised already, the current race is the most costly in U.S. history, and fundraising prowess has been seen as a mark of a candidate's credibility.
"Candidates, particularly at the presidential level, are primarily driven by one overarching imperative, which is to raise money," said Donald J. Simon, a campaign finance lawyer who has worked with Democratic candidates and with Common Cause. "They don't want to believe there is a problem with their fundraisers because they want to maximize the amount of money they generate. At the end of the day, vetting bundlers and tossing bundlers overboard works against their self-interest."
Clinton includes on her list of "Hillraisers" -- those who have committed to raising more than $100,000 for her White House bid -- several financiers linked to past troubles. They include Marvin Rosen, the former Democratic National Committee finance chairman whose efforts to reward six-figure party donors with attendance at White House coffees and overnight stays in the Lincoln Bedroom became the focal point of Senate hearings into fundraising abuses. Rosen did not return messages left at his offices in Florida and New York.
William Stuart Price, the Oklahoma oilman also on the "Hillraiser" list, stunned a courtroom in 1995 when he detailed how his former gas company had tried to "gain influence" with the Clinton administration by providing $160,000 in money and membership in a ritzy Washington golf club to the son of a Cabinet secretary. Price, who was never accused of wrongdoing, did not return calls seeking comment.
Price's testimony became the focal point of a criminal investigation of Ron Brown, then commerce secretary and a former chairman of the Democratic Party. The inquiry ended with the conviction of Price's former bosses, Nora and Gene Lum, for making illegal donations.
Also on the list is former senator Robert G. Torricelli (D-N.J.), who withdrew from a 2002 reelection campaign after being "severely admonished" by the Senate for taking lavish gifts from a businessman and contributor, David Chang. Torricelli did not return messages left at his office yesterday.
"It seems like deja vu," said Michael Madigan, a Republican lawyer who helped lead an extensive investigation into the Clinton administration's 1996 fundraising practices by then-Sen. Fred D. Thompson (R-Tenn.). "It sounds like a carbon copy of the last Clinton campaign."
Steve McMahon, a political consultant who served as senior strategist for Democrat Howard Dean's 2004 presidential campaign, said: "Anytime you have a community that includes this many people, it's idealistic but unrealistic to expect that none of them will have any taint of political concern. . . . The challenge facing these campaigns is determining what those concerns might be in advance of them becoming known."
In recent weeks, Edwards has sharply criticized a "corroded and corrupt" Washington system in which politicians raise money from special interests, which then seek their help on government matters. His campaign's latest statement on that subject came on Tuesday, the day of Lerach's plea deal. Top strategist Joe Trippi sent out a mass e-mail criticizing Clinton's campaign for hosting a fundraising event with companies and lobbyists seeking the government's multibillion-dollar homeland security business.
"Too many in office have fallen under the spell of campaign money at any cost -- and do not see that when they defend the system, they are protecting those that have rigged the game that puts corporate profits ahead of the interests of working Americans," Trippi wrote.
In May, Edwards issued a statement urging the Securities and Exchange Commission to weigh in with the Supreme Court on behalf of an effort by Lerach's clients -- who had invested in Enron -- to sue banks associated with the energy giant. "The question for all Americans is whether their government will be on the side of those big banks or regular families," Edwards said in a statement released by his presidential campaign. Lerach posted the statement on his law firm's Web site.
Edwards's campaign declined to discuss how much it knew about Lerach's legal problems while Lerach raised money. Campaign officials also said they do not consider the statement about the Enron case a favor to a major donor and fundraiser.
"This position is consistent with John Edwards's long-standing support for protecting the retirement savings of middle-class families and is shared by many others, including the New York Times editorial page, Securities and Exchange Commission, Senate Banking Committee Chair Chris Dodd, and a coalition of consumer groups, to name a few," Edwards spokeswoman Colleen Murray said.
Lerach is the second Edwards fundraiser to face legal troubles in the past year. Lawyer Geoffrey Fieger was indicted in August on federal charges of conspiring to route more than $125,000 in illegal contributions to Edwards's 2004 presidential bid. Fieger has pleaded not guilty.
Edwards's campaign has said it knew nothing about Fieger's alleged scheme and has cooperated with the Justice Department. But the campaign has declined to refund the donations in question, waiting for the outcome of Fieger's trial to avoid influencing jurors. If he is convicted, the campaign has said it plans to send his donations to charity.
Robert Lichfield, Romney's former Utah finance co-chairman, is the subject of lawsuits alleging abusive treatment at the boarding schools Lichfield founded for troubled youths. He resigned from the campaign in July. Romney's campaign did not respond to inquiries about how much money Fabian, the finance committee member indicted last month, raised before he left the campaign. Lichfield's attorney has called the lawsuit's allegations against him "ludicrous."
Hsu, the Democratic fundraiser who was one of the Clintons' top 15 bundlers, donated to other prominent Democrats, including the political action committees for rival presidential candidates Barack Obama and Joseph R. Biden Jr. Obama, the Democrat most directly challenging Clinton for the lead in presidential fundraising so far, acknowledged that Hsu co-hosted a fundraiser for his PAC, called the Hopefund, in March 2005.
"The most important thing I learned about this issue is that all campaigns have the same problem, regardless of party or candidate: How do you know who has skeletons and who does not?" said Lanny Davis, who as special counsel to Bill Clinton handled campaign finance issues for him from 1996 to 1998. "Let's face it: Campaign organizations are not 'CSI' -- not even close -- even if they'd like to be."
Staff writer Carrie Johnson, staff researcher Madonna Lebling and research editor Alice Crites contributed to this report.