Members Eye Refunds Over Probes

Posted February 20, 2009 at 6:10pm

Dozens of House and Senate lawmakers are contemplating whether to purge their campaign accounts of as much as a combined $5 million in contributions, as federal investigators pursue separate probes of two major donors.

A handful of lawmakers had already begun to refund donations tied to either Virginia-based PMA Group, a defense-appropriations-focused lobbying shop at the center of a federal probe, or to financier Allen Stanford, accused last week of civil fraud for orchestrating a massive multibillion-dollar investment scam.

According to Federal Election Commission records, since 2001 the PMA Group and its employees have donated at least $2.7 million to political action committees and candidates, not including thousands of dollars contributed by individuals associated with the firm who did not list PMA as an employer on their donations.

Similarly, Stanford — named in civil charges along with Stanford Group, Stanford Capital Management, Stanford International Bank and two Stanford executives — and his employees have donated about $2 million to candidates and PACs since 2000.

Sen. Bill Nelson (D-Fla.) became the first lawmaker to promise to flush out Stanford-related funds last week, vowing to donate $45,900 to charity.

But late Friday afternoon, a court- appointed receiver overseeing Stanford’s businesses requested that those contributions be refunded rather than given away.

“The Receiver understands that there are multiple recipients of political campaign contributions from the Defendants and their controlled entities,” a news release issued Friday by the Stanford Financial Group Receivership stated. “Such recipients are encouraged to transfer such funds back to the Receivership Estate. Directions as to how to do this will be posted on the website.”

Those instructions were not available by press time.

“We’ve selected a charity to send an amount equal to $45,900 in campaign contributions associated with Stanford. But we’re also seeking guidance on whether it can be returned to the Stanford company’s court-appointed receiver,” Nelson spokesman Dan McLaughlin wrote in an e-mail.

Nelson had also vowed to donate at least $4,000 in PMA contributions to charity.

Prior to the request to refund contributions, several lawmakers had made similar vows to donate funds to charity, and it was not immediately clear whether or how many Members would comply with the receivership’s request.

A spokesman for House Ways and Means Chairman Charlie Rangel (N.Y.) said Thursday that the senior Democrat would give $10,800 to charity to offset Stanford donations.

According to FEC records, Rangel received $27,000 from Stanford between 2003 and 2008, as well as another $1,000 from Stanford employees. But Rangel spokesman Emile Milne said a contribution of $25,000 to the Rangel Victory Fund in 2008 was divided among 11 Democrats, with Rangel receiving $1,000 of the total.

“Chairman Rangel knew Mr. Stanford as a businessman in the Caribbean. Given the nature of the charges filed against Mr. Stanford, Chairman Rangel will donate $10,800 from his political committee to charity,” Milne said.

Similarly, Sen. Chris Dodd (D-Conn.), who received $16,000 between 2002 and 2003, also said he will donate funds to charity, and Sen. John Cornyn (R-Texas) will donate $4,000, the Associated Press reported last week. Cornyn received $6,600 from Stanford employees between 2003 and 2007, FEC records show.

Other lawmakers have pledged to donate funds contributed directly by Stanford but said they would wait to determine whether to part with contributions made by Stanford employees or its PAC.

“We are donating Mr. Stanford’s contributions to charity and will do the same for any others who are subsequently implicated in this wrongdoing,” said Brian Fallon, spokesman for Sen. Charles Schumer (D-N.Y). According to FEC records, Schumer received a total of $18,000 from Stanford employees between 2002 and 2003, including $4,000 from Stanford himself.

An aide to Rep. Charlie Gonzalez (D-Texas) said the House lawmaker has yet to decide what to do with the $4,000 he received from Stanford, a portion of the $13,250 he received from Stanford and employees between 2000 and 2004.

In the meantime, Rep. John Murtha (D-Pa.), the top recipient of funds from PMA employees with $106,600 in donations since 2002, told the Johnstown Tribune-Democrat last week that if “wrongdoing is confirmed at the firm,” he would donate the funds to charity.

Similarly, several Members said they will not return or donate contributions until PMA Group is formally accused or convicted of wrongdoing, not merely under investigation.

“We are aware of the investigation into the PMA Group and will continue to monitor its progress,” said Rebecca Gale, spokeswoman for Rep. Christopher Carney (D-Pa.). Carney received $38,500 in funds from PMA sources in 2007 and 2008.

“If the authorities find any donation to be improper, we will immediately give that contribution to charity,” Gale said.

An aide to Rep. Jim Moran (D-Va.), who received $93,750 from PMA employees between 2002 and 2008, echoed that sentiment.

“We’re following the situation closely in the media and reserving action until there’s clear evidence something improper occurred,” Moran spokesman Austin Durrer said.

A spokesman for Rep. Bill Pascrell (N.J.), who received $26,900 in campaign cash between 2005 and 2007, said the Democrat is likewise not considering donating or refunding any of that money, but could opt to do so dependent on future events.

But some Members have begun to part with the PMA donations.

A spokesman for Rep. Patrick Murphy (D-Pa.) said the second-term lawmaker would donate $25,250 in funds to local charities.

Rep. Zoe Lofgren (D-Calif.), who chairs the House ethics committee, said she would return $7,000 in donations received between 1998 and 2007. Rep. Peter Visclosky (D-Ind.) pledged to return $18,000.

Rep. John Mica (Fla.) on Thursday became the first Republican to announce he would return donations from PMA, returning $2,000 in campaign funds.

Rep. Ed Perlmutter (D-Colo.) told the Denver Post last week that he would donate $2,000 from PMA to the Boys & Girls Clubs of America, while Rep. Allyson Schwartz (D-Pa.) told the Bucks County Courier Times that she would also donate campaign cash to charities.

But Rep. Adam Smith (D-Wash.), who received a one-time donation of $1,000 from PMA employee Judith Zink in 2007, said Friday that he will keep the funds, asserting that they are not related to PMA’s lobbying activities.

“We’ve never done anything for a PMA client. We’ve never requested an earmark for them,” Smith said.

Paul Singer contributed to this report.