Massa alleges fraud in campaign payment, salary increase

By Carol D. Leonnig
Washington Post Staff Writer
Sunday, April 18, 2010

Former congressman Eric Massa on Saturday denied authorizing a $40,000 payment from his campaign account to a top aide, and he accused the aide of tricking campaign staff to get the money.

The New York Democrat also said that someone forged his signature on paperwork in recent months to increase the congressional salary of the aide, Chief of Staff Joe Racalto, from $120,000 to $160,000. Through his attorney, Massa said he would provide information "to the proper authorities."

Racalto called the accusations ridiculous and false and said he was entitled to the salary increase and the payment for campaign work, his attorney said Saturday.

Campaign finance records show the $40,000 payment to Racalto was recorded on March 4, the day after Massa announced his resignation amid a sexual harassment scandal. At that time, Massa's reelection campaign was effectively over and Racalto -- because of his knowledge of complaints against Massa -- was considered a critical potential witness in the scandal.

Now, Massa and his onetime confidant are accusing each other of lying -- and worse. Racalto last week publicly accused Massa of sexually harassing him. Massa's most recent allegations are almost certain to trigger an investigation into possible violations of campaign finance laws.

Under federal law, a congressional staff member's payment for work on a campaign must come from campaign funds, not from the salary received for congressional work.

On Friday, Racalto told The Washington Post that he received the $40,000 under a long-standing contract to do political work for Massa's 2010 reelection campaign. Racalto said he deferred being paid for 15 months to help the campaign keep its coffers full but then sought to collect when he learned of Massa's resignation.

On Saturday, Massa disputed that account through his attorney, Milo Silberstein.

"There is not and never has been any contract between Mr. Racalto and the campaign," Silberstein said. "The amount of $40,000 was determined solely by Mr. Racalto."

He said Racalto falsely told Massa's campaign attorney and comptroller that the congressman had approved the fee "when he had not."

Silberstein said that, under congressional rules, the payment to Racalto appears to exceed the $25,000 annual limit on the amount of outside income senior congressional staff members can earn for political work.

Racalto responded in a statement released by his attorney late Saturday. He said Massa had approved the campaign payment and the salary increase, which came when other staffers also got raises.

"The timing of the allegations by Massa is highly questionable and suspicious in light of Racalto's announcement of his sexual harassment complaint," said the attorney, Camilla McKinney. "The former congressman is trying to discredit someone who is making a sexual harassment complaint against him."

In early March, a House ethics committee had contacted Racalto for questioning in its probe of numerous allegations that Massa groped and propositioned his young male employees. Racalto had told co-workers that Massa repeatedly pressured him for sex.

Four former and current staffers have said they were unaware of any contract Racalto had for political campaign services with Massa, and they questioned how he could have done $40,000 worth of work they did not see.

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