A Baltimore lawyer who has been a key fund-raiser for dozens of Maryland Democrats in recent years steered thousands of dollars in apparently illegal contributions into an obscure New Mexico campaign fund that supports politicians with ties to India, several contributors say.
Lalit H. Gadhia and his nephew approached people in the Baltimore area -- including a young lawyer and a hotel manager -- and asked them to write large personal checks to the fund, three contributors say.
In separate interviews, those contributors said they were then reimbursed in cash. But their checks were listed as bona fide contributions on the PAC's quarterly filing with the Federal Election Commission (FEC).
Mr. Gadhia, 56, denied the allegations in a lengthy interview Monday, saying, "It's untrue that I gave money through anyone. I don't give money -- I get money.
"People can have all kinds of misunderstandings. They sometimes hear things in a way they were not intended. They sometimes misconstrue things, especially in politics. I would never say someone is lying, not before I knew what they know. But there has obviously been a serious mistake made here by somebody."
Mr. Gadhia's nephew, Uday Gadhia, also denied the claims, saying: "That's not true. Why would I do something like that?"
But contributors interviewed by The Sun tell a different story. They say that beginning about the second week of October, appeals for funds from Lalit Gadhia and his supporters for the political action committee, known as the Indian-American Leadership Investment Fund, began to filter through Baltimore's Indian community.
At the time, Mr. Gadhia was Gov. Parris N. Glendening's campaign treasurer and a campaign financier for Mayor Kurt L. Schmoke and U.S. Sen. Paul S. Sarbanes.
In restaurant kitchens, at parties and at work, contributors say they were asked to write checks of $500 or $1,000 with the understanding that they would be reimbursed by Mr. Gadhia or his representatives. Three people who wrote checks said they were repaid for their contributions in cash and a fourth person said a contribution was made in his name without his knowledge.
The checks were then sent back to Mr. Gadhia's office, which mailed them to the PAC's treasurer in Albuquerque along with a list of contributors to be filed with the FEC. That list contained numerous errors -- including at least one Randallstown address that doesn't exist.
Contributions made under such circumstances are in potential violation of at least three federal laws, according to the U.S. Justice Department.
Federal prosecutors say the statutes make it illegal to knowingly contribute money to a political fund or candidate through a third party; to deliberately file false information to the government; or to conspire to circumvent a U.S. government law or process. Together, these three offenses are punishable by fines and up to 11 years in prison.
$34,900 in one day
In all, federal records show, $34,900 poured into the PAC's office in one day -- Oct. 31 -- just weeks before the 1994 general election. And all of it came from donors in the Baltimore region.
Neither the mayor nor the governor received any contributions from the Indian-American Leadership Investment Fund. But the PAC gave $2,000 to Mr. Sarbanes and $1,000 to Maryland Democratic Rep. Kweisi Mfume at Mr. Gadhia's request, according to the PAC's treasurer.
Reached Friday while on a business trip in Washington, the treasurer said he was stunned at the breadth of the allegations against the fund's leading benefactor.
"Frankly, if this is true, it goes well beyond any of the shenanigans of this kind I have ever heard of," said Subodh Chandra, 27. "If the PAC has any responsibility here, then we will certainly meet it. Should this result in a federal investigation, we will cooperate in every way possible."
Established in 1993 by a group of young professionals whose parents had immigrated to the United States from India, the fund supports Indian-American political candidates and those who have a favorable record on Indian issues. FEC records show that the PAC was largely dormant through its first year and never showed a balance of more than $600 in contributions.
Then, came the windfall.
"The word was diffused out through the Indian-American community in the fall at parties and conferences and things like that," said Jay V. Mangalvedhe, an urban planner from Baltimore County who wrote a $1,000 check to the PAC. "Make a contribution, it's for a good cause -- and you'll get your money back. Lalit Gadhia will see to it.
"I didn't see anything nefarious about it at the time. I wrote a check and I got my money back a few days later through a friend. It was no big deal."
Said Mr. Gadhia: "There are a lot of people who are overzealous, or who say all kinds of things, but I never said anything like that. No. Nothing like that.