Clinton supporter suspected of illegal donations

Introduction

Employees of a Washington, D.C.-based accounting firm that federal prosecutors called an “assembly line for illegal campaign contributions” donated more than $500,000 to federal candidates and committees over the past 10 years, including nearly $50,000 to Hillary Clinton’s 2008 presidential campaign, according to a Center for Public Integrity review of records.

An employee and a consultant for the firm, formerly run by Jeffrey Thompson, pleaded guilty last month in the U.S. District Court for the District of Columbia to making so-called straw donations to several federal and D.C. campaigns. The two men — Lee Calhoun and Stanley Straughter — made donations in their names and their family members’ names and were then reimbursed by Thompson or his firm, Thompson, Cobb, Bazilio & Associates.

The charges stem from a federal investigation of the 2010 campaign of Washington, D.C., Mayor Vincent Gray. At the center of the probe is Thompson, who has been implicated by prosecutors as the financier of an illegal, off-the-books $650,000 “shadow campaign” that federal prosecutors say helped get Gray elected.

An analysis of campaign finance records provided by the Center for Responsive Politics found that Thompson and other donors who listed the accounting firm as their employer have given at least $514,350 to federal candidates and political action committees since the 2002 campaign cycle, including $36,900 from Calhoun, the employee who pleaded guilty last month.

The biggest beneficiary of those funds was former Secretary of State Hillary Clinton, whose campaigns took in $50,400. Clinton’s presidential campaign committee received $40,300 from employees at Thompson’s firm in November 2007, when she attended an intimate fundraiser at the company’s headquarters in downtown D.C., according to three people who were at the event.

Other recipients include President Barack Obama ($14,500 in the 2008 cycle), former Democratic presidential candidate and Secretary of State John Kerry ($20,000 in the 2004 cycle), former Republican presidential candidate Sen. John McCain ($13,800 in the 2008 cycle) and Senate Majority Leader Harry Reid ($9,600 in 2009).

Thompson himself made political contributions totaling at least $215,000 in that same period.

A modest amount of additional funds from donors at Thompson’s firm are not included in the total because some campaign records do not indicate the donor’s employer.

Federal and D.C. campaign finance laws limit how much an individual can contribute to a candidate’s campaign, so deep-pocketed contributors sometimes use straw donors to circumvent those limits illegally. Federal law also prohibits corporations from making donations to candidates for federal office.

“For a decade, the firm and its CEO made illegal campaign contributions through straw donors to an array of federal and D.C. politicians,” U.S. Attorney Ronald Machen said in a statement following one of last month’s guilty pleas. “The firm used a special accounting system to keep track of the thousands and thousands of dollars it was plowing into political campaigns.”

Thompson sold his majority stake in the firm last year. The company, now renamed Bazilio Cobb Associates, issued a statement last month saying that its “former CEO may have violated federal campaign law by giving directions to reimburse, with his own funds or with corporate funds, employees and others who made such contributions.”

The two guilty pleas came a year after a woman who did public relations work for Thompson — Jeanne Clarke Harris — also pleaded guilty to making illegal straw donations on Thompson’s behalf.

Thompson’s home and offices were raided by the FBI last year and court records indicate he is under a grand jury investigation. He has not been charged with any crime and has been identified only as “CO-CONSPIRATOR #1” or “EXECUTIVE A” in court records. Thompson’s lawyer, Brendan Sullivan, did not respond to a request for comment.

A spokesman for the U.S. Attorney’s Office declined to comment because the investigation is ongoing.

‘They’re pals’

The fundraiser Thompson threw for Clinton in November 2007 took place as Clinton was in the middle of a pitched battle with Obama and former North Carolina Sen. John Edwards for the Democratic Party’s presidential nomination. There were about 20 people at the fundraiser, according to three attendees.

Two contributors who were at the fundraiser, but did not want their names publicly associated with Thompson’s political giving, say Thompson and Clinton are on a first-name basis and both gave speeches at the fundraiser detailing their lengthy friendship.

“They’re pals,” said one contributor.

The other added: “Jeff was all in for her.”

A spokesman for Clinton, who is often mentioned as a potential contender for the 2016 presidential race, did not respond to repeated requests for comment.

Two months prior to her appearance at Thompson’s firm, Clinton’s campaign had promised to carefully vet major fundraisers after it returned about $850,000 worth of contributions associated with two potential straw donation schemes, according to the Wall Street Journal and other media reports. Two major Clinton donors associated with those donations, Norman Hsu and William Danielczyk, were later convicted of campaign finance violations.

Most of the donations from employees of Thompson’s accounting firm to Clinton came on three days: November 14, 2007, November 30, 2007, and January 31, 2008. In addition, several of Thompson’s business associates also made contributions on those days, making Clinton’s total haul from people with ties to Thompson more than $110,000 on those three dates alone.

Straughter and Harris are listed as giving a combined $9,200 to Clinton. Employees of D.C. Chartered Health, which was owned and controlled by Thompson at the time, gave $13,500 to Clinton on those dates, campaign finance records show. And several others with financial ties to Thompson — his hairdresser; his massage therapist; and several consultants and their family members and employees — together contributed more than $40,000 to Clinton’s campaign on those dates, campaign finance records show.

‘Shadow campaign’

Thompson, an accountant by training, was until recently a major power player in D.C. local politics. Some associates called him “governor” as a nod to his outsized, behind-the-scenes political power. While he was at the helm of Thompson, Cobb, Bazilio & Associates, the firm received more than $50 million in D.C. government contracts in the last decade. On the federal side, the firm has won more than 50 contracts worth roughly $19 million since 2001, according to USAspending.gov.

D.C. Chartered Health was a Medicaid managed-care organization that contracted with the city to provide health insurance for many of D.C.’s poor while also providing Thompson with several years of seven-figure profits. (The company was placed in receivership last year. Gray recently proposed tapping the District government’s contingency funds to help cover $47.5 million in outstanding debts Chartered owes to health care providers.)

The troubles swirling around Thompson have only multiplied.

Harris, Thompson’s longtime public relations consultant, pleaded guilty last summer to helping run that alleged “shadow campaign” for Gray. Harris also admitted to making straw donations on Thompson’s behalf for more than a decade. The charging documents filed in federal court don’t detail all those donations but do say that in 2008 Harris, a family member, a friend and an employee gave $21,550 to federal campaigns and were reimbursed by Thompson.

Federal election law prohibits individuals from being reimbursed for making donations to federal candidates.

Last month, former D.C. Councilmember Michael A. Brown pleaded guilty to a felony bribery count as well as illegally taking $20,000 in unreported funds from Thompson via Harris to help Brown’s 2007 campaign for local office. Brown is the son of Ron Brown, who served as Secretary of Commerce under former President Bill Clinton before dying in a plane crash in 1996.

Also last month, Calhoun, the employee at Thompson’s former accounting firm, pleaded guilty to making $160,000 in illegal straw donations to D.C. and federal campaigns. He admitted to making the contributions in his and his family members’ names, then being reimbursed, with a bonus payment, by Thompson or the firm. Calhoun said $83,400 went to federal campaigns .

Thompson’s old firm issued a statement in response to Calhoun’s plea saying that an internal review found that “significant amounts were contributed to various federal and local political campaigns” by the firm’s employees, their family members and friends, at Thompson’s direction.

“This has been a very difficult time for the firm, particularly since almost all of its hard-working professionals and staff are not politically active and were not aware of certain federal campaign contribution law requirements,” the firm’s statement said.

Straughter, a Philadelphia resident who acted as a consultant to Thompson’s accounting firm, pleaded guilty last month to giving $58,600 in illegal donations at Thompson’s direction to federal politicians and another $49,000 to D.C. candidates. Straughter made the donations in his name, his family members’ names and his consulting company’s name and was reimbursed by Thompson’s firm.

Combined, the three Thompson associates who have pleaded guilty to campaign finance violations have admitted to making at least $163,550 in illegal straw donations to federal campaigns on Thompson’s behalf.

Other Big Recipients

After Clinton, the next biggest recipient from employees at Thompson’s old firm is former NAACP President and Maryland Democratic Congressman Kweisi Mfume, whose failed U.S. Senate candidacy in 2006 received $49,800.

Thompson was business partners with Mfume’s son, Kweisi Mfume Jr. The two owned a company, KMJ Development, which was formed in 2006 and is listed as having given thousands of dollars to several D.C. politicians. Mfume Jr. said Thompson was solely responsible for the company’s political donations and took outright control of KMJ development in 2009.

Two non-voting House delegates are the next highest recipients of money from employees at Thompson’s old accounting firm. Del. Eleanor Holmes Norton, D.C., has received $43,100 since 2002 for her re-election campaigns. And Del. Donna Christensen, U.S. Virgin Islands, has received $35,100. Both Norton and Christensen have recently pledged to return or give to charity some donations tied to Thompson.

Last year, Obama, Maryland Gov. Martin O’Malley, and Sen. Tim Kaine, Va., all returned or gave away some portion of Thompson-related donations their campaigns had received. Clinton’s presidential campaign, which was closed out in February of this year, did not return any Thompson-related funds, a review of Federal Election Commission records shows.