Three months ago, I reported on the murky financial problems of freshman Sen. Donald Stewart (D-Ala.). The FBI launched a full-scale probe of Stewart's questionable 1978 campaign finances, and a federal grand jury reportedly convened in Birmingham last week to look into the long-festering controversy.
When I published my initial report of the FBI investigation, Stewart wailed that he hadn't been given a chance to produce evidence that would disprove certain allegations. But he still hasn't produced convincing answers despite reporters' repeated questions.
One fact Stewart hasn't denied, because it's on the public record is that he accepted $22,000 in illegal campaign contributions from a smooth-talking convicted con artist named James Dennis. The Federal Election Commission slapped Dennis with the biggest fine in its brief history. Though later cut in half, the fine has still not been paid.
Stewart insists that he returned the tainted money as soon as he learned it was illegal, and downplayed his association with Dennis. He was "not a big player in my campaign," the senator said, adding: "I didn't have much contact with him." That's not the story given by Dennis and others familiar with Stewart's 1978 campaign.
My associates Jack Mitchell and Tony Capaccio learned that Dennis, while in prison on a conviction unrelated to Stewart told the FBI he had cashed Stewart's check returning the $22,000 in contributions and then gave Stewart the money back in cash. That's what triggered the FBI probe.
Stewart has produced an affidavit for Alabama reporters from an Anniston, Ala., banker as evidence that he borrowed $22,000 to replace the money he had to return to Dennis. That might explain the $22,000 deposited in Stewart's campaign account the same day he repaid Dennis. But so far, Stewart has failed to produce an actual loan agreement to substantiate the banker's affidavit.
As for his claim that Dennis didn't figure importantly in his campaign, Dennis told my reporters flatly, "No one was closer to Donald than me." Other former Stewart campaign workers have confimed this, citing over 100 personal contacts between Stewart and Dennis during the 1978 campaign.
The election commission, citing a lack of resources, accepted the unsworn assurances of Stewart's lawyer that free plane rides Dennis provided were "personal," despite published accounts quoting Dennis' pilot as saying he flew Dennis, Stewart and Stewart's family back from a political campaign rally.
While a few plane rides may be insignificant compared to illegal campaign donations, further probing casts doubt on the senator's insistence that the wheeling-and-dealing Dennis wasn't close to his campaign.
Nor has the FEC done anything about addtional, apparently illegal, campaign gifts from Dennis totaling $1,150. Stewart has refused to give the money back because he says the FEC hasn't asked him to return it. An FEC spokesman explained that since no formal complaint has been filed, these donations have not been investigated.
The senator hasn't cut his ties to the con man. Early in June, as the FBI was gearing up its investigation, Stewart went to Talladega, Ala., on a fact-finding mission concerned with Cuban refugee facilities.
While there he visited Dennis at the federal prison in Talladega. Stewart contends that a prison counselor informed him that Dennis had requested a visit. But Dennis, in a taped conversation, said, "I didn't know he was coming down."
Stewart also claimed the meeting was personal and lasted only several minutes. But an FBI source noted the two as meeting alone for about 25 minutes. Dennis has since been paroled.