The fundraising arms for Democratic and Republican members of Congress don't agree on much, except when it comes to all the big donations they've gotten over the years from jailed financier R. Allen Stanford.
In recent days, the Democratic Senatorial Campaign Committee (DSCC), the National Republican Congressional Committee (NRCC) and other party organizations appealed a court order to return more than $1.7 million combined they received that were tied to Mr. Stanford's alleged multibillion-dollar bilking of thousands of investors. He's in jail awaiting trial on charges of running a Ponzi scheme while a court-appointed receiver tries to recoup money for investors.
The appeals come a month after a federal judge in Texas ordered the organizations to return the money. But in a recent court filing, attorneys for the DSCC and the Democratic Congressional Campaign Committee, which owe more than $1.2 million combined, asked for a stay before having to turn over the money. They want to post bond or a letter of credit pending an appeal.
Meanwhile, in a separate set of court papers, attorneys for the NRCC, the Republican Senatorial Campaign Committee and Republican National Committee filed a notice to appeal the ruling, too.
"After thoroughly reviewing the court's decision and the relevant law, and in light of an important change in the precedent on which the court relied, we believe we have an excellent chance of success," said Kirsten Kukowski, spokeswoman for the RNC.
The combined legal efforts of the political parties show the lengths political committees mdash; Democrat and Republican alike — will go to protect party coffers with control of Congress and the White House up for grabs in 2012.
"Stanford aimed most of his campaign contributions to congressional leaders and party bosses, and eventually started giving heavily to presidential candidates as well, which coincided with the weakening of offshore disclosure and tax regulations that directly benefited Stanford's shady business," said Craig Holman, legislative representative for the D.C.-based watchdog group Public Citizen.
"Like other campaign contributions tainted by scandal, candidates and the party committees should try to show that they personally have not been influenced by the money and turn Stanford contributions over to charity," he said.
Federal law allows campaign committees to part with donations in several ways. They can return contributions, donate them to charity or send the money to the U.S. Treasury.
But Ralph Janvey, receiver in the Stanford case, wants the money returned to investors. In addition to taking the major-party fundraising committees to court, the receiver previously sent letters to dozens of other politicians who received Stanford money over the years. More than a year later, he's still waiting.
According to the most recent accounting last month, politicians have returned $132,500, with nearly $1.8 million still not yet returned, though most of that is still in the hands of the party fundraising groups fighting in court.
Aside from the political committees, Rep. Charles B. Rangel, New York Democrat, appears to be the biggest beneficiary of Stanford cash among those who have yet to return donations. The Rangel Victory Fund received $25,000 from Mr. Stanford, his associates and businesses, money that Mr. Janvey says is directly tied to the Ponzi scheme.
Other beneficiaries include the New Jersey Democratic State Committee and Rep. Pete Sessions, Texas Republican, with $10,000 each. Rep. Gregory Meeks, New York Democrat, received $6,600.
Phone and email messages left with the members of Congress were not returned, nor was a message left with the New Jersey Democratic State Committee.
Among dozens of politicians who have returned the contributions are Sen. Richard C. Shelby, Alabama Republican, who sent back $14,000; former Sen. Christopher J. Dodd, Connecticut Democrat, who returned $27,500 from his presidential and Senate campaigns; and Sen. Harry Reid, Nevada Democrat, who returned $8,000.
In court documents, attorneys for the major-party committees put forth several arguments for why they should be allowed to keep the contributions, including arguing that the lawsuits seeking the return of the money weren't filed on time.
U.S. District Judge David Godbey disagreed, noting in a 61-page ruling that the committees "fail to create a fact issue concerning the Ponzi scheme's existence or the contributions' source and make no attempt to show that the contributions were made in exchange for consideration of reasonably equivalent value."
The judge ordered the Democratic Senatorial Campaign Committee to return $1,037,347; the NRCC, $260,291; the Democratic Congressional Campaign Committee, $218,273; the National Republican Senatorial Committee, $90,960; and the Republican National Committee, $140,241.
Kevin Sadler, attorney for Mr. Janvey, said in an email that the ruling represented an important victory for the receivership and thousands of victims of the Ponzi scheme.
"As important as this decision is, there remain hundreds of other defendants, individuals, companies and organizations, which, like these political committees, received hundreds of millions of dollars of investor funds diverted by Allen Stanford and his fraud scheme," Mr. Sadler said.
"Such funds rightfully belong only to the receiver, whose duty it is to recover these funds and use them to compensate the victims of the Stanford fraud."
Mr. Stanford's trial recently was postponed from September to January. He has pleaded not guilty to charges of bilking investors of about $7 billion.
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