Saturday, January 8, 2005

Sen. Hillary Rodham Clinton’s former campaign finance director has been named in a federal grand jury indictment in Los Angeles on charges of filing false campaign finance reports with the Federal Election Commission, the Justice Department said yesterday.

The four-count indictment said the finance director, David Rosen, understated the costs of an Aug. 12, 2000, fund-raising gala in Los Angeles by nearly $500,000, filing fraudulent documents with the FEC to increase the amount of funds available to Mrs. Clinton’s “New York Senate 2000” campaign.

An FBI affidavit filed in the case, which has been under investigation by the Justice Department for more than three years, said costs of the event actually exceeded $1.2 million, but that required FEC disclosure forms “incorrectly disclosed that the cost of the event was only $523,000.” The affidavit said the true cost of the event “was deliberately understated in order to increase the amount of funds available to New York Senate 2000 for federal campaign activities.”

Mrs. Clinton was first lady at the time of the gala.

The indictment comes at a time when Mrs. Clinton is considered a potential Democratic presidential candidate in 2008, and faces potential challenges in 2006 for her Senate seat from former New York City Mayor Rudolph W. Giuliani or New York Gov. George E. Pataki.

If convicted on each of the counts, Mr. Rosen faces up to five years in prison and up to $250,000 in fines.

The event, staged while the Democratic National Convention was under way in Los Angeles, was billed as the “Hollywood Gala Salute to President William Jefferson Clinton” and was a fund-raiser for Mrs. Clinton’s senatorial campaign.

Two of the event’s organizers were Hollywood producer Peter F. Paul and charity fund-raiser Aaron Tonken.

Paul is a convicted felon now facing stock fraud charges in New York. He reportedly has been cooperating with federal prosecutors. Tonken pleaded guilty in 2003 to federal charges of diverting hundreds of thousands of dollars from donors and underwriters of Hollywood events he organized — including the August 2000 gala.

A sworn statement by Paul in a pending lawsuit against the Clintons, Mr. Rosen and Tonken said a host of Hollywood celebrities attended the Clinton gala, including Shirley MacLaine, John Travolta, Cher, Brad Pitt, Jennifer Aniston, Whoopi Goldberg, Patrick Swayze, Larry King and George Hamilton.

According to the indictment, Mr. Rosen provided some documents to an FEC compliance officer, but withheld the true cost of the event and later filed false documents to substantiate a significantly lower figure.

The indictment said the gala netted both “hard money” donations — funds that were given to candidates and were subject to strict federal limits — and unlimited “soft money,” which is unregulated and unlimited under then existing campaign finance laws.

During the Clinton administration, a Justice Department campaign finance task force brought charges against more than two dozen persons — mostly Democrats — and two corporations for fund-raising abuses during the 1996 election presidential campaign.

Mr. Rosen, in addition to working for New York Senate 2000, has raised money for several other high-profile Democratic candidates, including former presidential candidate Gen. Wesley Clark.

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