Boehner Campaign Funds Stolen

Posted April 15, 2003 at 2:28pm

A campaign treasurer allegedly embezzled $418,559 from Rep. John Boehner’s campaign account to support his gambling habit, the Ohio Republican disclosed Tuesday.

Boehner, chairman of the Education and the Workforce Committee and a prodigious fundraiser, revealed the alleged fraud in a letter to supporters as well as simultaneous filings with the Federal Election Commission amending reports for the last three years.

The FBI has been called in to investigate what could prove to be one of the largest schemes to embezzle from a Congressional campaign account in recent years.

“During an audit we found suspicious activity, and immediately took corrective action. We notified the proper law enforcement authorities and are cooperating fully with their investigation. While I cannot discuss details of an ongoing investigation, I can tell you that the embezzled amount is significant and the deceptions were very clever,” Boehner said in a letter to supporters.

The treasurer, Russell Roberts of West Chester, Ohio, was fired and replaced last month when the alleged embezzlement was discovered. Roberts, who could not immediately be reached for comment, was described by Boehner as “my trusted campaign treasurer.” Roberts began working as a Boehner campaign aide in 1990, during the Republican’s first run for Congress.

In a letter to the FEC, Boehner attorney Jan Baran wrote that “irregularities had been hidden through a series of deceptive practices to falsify records and conceal activities. The Committee’s former treasurer was confronted and then admitted that he had been misappropriating Committee funds to support a gambling habit.”

Roberts “was immediately fired and a professional treasurer was hired to prepare accurate FEC reports and amendments,” Baran wrote.

Boehner’s campaign reported raising $1.1 million in the 2001-02 election cycle. The latest report covering the first three months of 2003 showed the campaign with $95,500 in the bank, a figure that reflects accounting after the alleged embezzlement was discovered.

Baran said it was unlikely that Roberts would be able to reimburse the allegedly stolen funds.

The first official notification that something was amiss with Boehner’s campaign came on March 24, 2003, in a letter to the FEC from the new treasurer, Mary Dotter. She informed the FEC that Roberts had been dismissed and that the campaign was undertaking a complete review of its records in order to respond to several requests by FEC analysts seeking additional information.

The FEC review of Boehner’s campaign reports did not appear to notice the alleged embezzlement scheme, however. Instead, the reviews noted that the campaign had filed reports using the wrong form and that contribution limits from individuals may have been exceeded in a few instances.

The alleged embezzlement was noticed internally after a number of vendors indicated they had not been paid, according to a person familiar with the matter. That notification, in turn, caused campaign officials to review records that reported those debts as having been paid even though they were not, the person said.

“Safeguards that should have prevented this were not in place,” Boehner wrote in his letter. “They are now and to a degree not seen in most congressional campaigns.”

In addition to new financial controls, the campaign books will undergo an audit every two years, Boehner added.

There are no official statistics kept on incidents of campaign finance embezzlement and experts have long warned that the campaign funds are easy targets for plunder given the often lax accounting standards of individual campaigns and a nearly invisible threat of audit from the FEC.

In 1989, former Sen. Dennis DeConcini (D-Ariz.) reported that more than $500,000 was stolen from his campaign. In 2001, the campaign of then-Rep. Gary Condit (D-Calif.) reported that $35,000 was embezzled from its account. And Sen. Trent Lott’s (R-Miss.) leadership political action committee was fleeced of more than $85,000 by a PAC official who allegedly used the money to buy drugs.

Election law experts have said that the threat of random audits performed by the FEC would help deter embezzlement schemes. But Congress stripped the agency of the power to conduct random audits in 1979 after lawmakers became concerned that audits would uncover politically embarrassing details. During consideration of the McCain-Feingold campaign finance law, the Senate killed an amendment that would have reinstated the FEC practice of random audits.