Venezuelans may have shifted funds to the DNC Prosecutor in Manhattan turns over evidence of illegal gifts in '92 election

February 22, 1997|By NEW YORK TIMES NEWS SERVICE

NEW YORK -- The Manhattan district attorney said yesterday that he had given federal prosecutors evidence that a Venezuelan banking family may have illegally funneled campaign contributions to the Democratic Party during the 1992 election.

The contributions, of roughly $92,000, are listed in Federal Election Commission records as coming in 1992 from a Miami lawyer for the bankers, Charles Intriago, and a member of the banking family, Jorge Castro Barredo, who is a U.S. citizen.

But in a hearing in Manhattan Supreme Court last year, prosecutors said they had evidence that the Americans had been reimbursed by companies controlled by the Castro family in Venezuela. It is illegal for foreign citizens or companies to make campaign contributions to U.S. political campaigns or for contributions to be made through surrogates.

District Attorney Robert M. Morgenthau made his remarks in an interview yesterday, days after three members of the Castro family were convicted in a bank fraud case brought by his office.

In recent months, in a widening controversy surrounding campaign fund raising, the Democratic National Committee has acknowledged that it received $1.6 million in illegal contributions from foreign companies or individuals, most of them in 1994 and 1995. The contributions described by Morgenthau would be the earliest known donations to have come under question.

Amy Weiss Tobe, a spokeswoman for the Democratic National Committee, said the organization knew nothing of the contributions but would look into them.

Morgenthau said that during his inquiry into the Castro banking empire, one of the largest in Venezuela, "we came across contributions to the Democratic National Committee which may have been made illegally by offshore entities." He provided no additional details.

Morgenthau said he had turned over the material, including evidence obtained through a Manhattan grand jury, to federal prosecutors in Manhattan and Miami. The prosecutors in Miami received the information in October, and those in Manhattan last month, he said.

A spokesman for the U.S. attorney for the Southern District of Florida declined to comment.

Before the 1994 collapse of Venezuela's banking system, the Castro family, led by Orlando Castro Llanes, controlled banks, real estate companies and a network of radio stations. Most of the family's financial holdings were lost in the collapse, and Castro Llanes has been living in Florida.

Morgenthau said yesterday that he did not know why the contributions had been made. "That would be rank speculation on my part," he said.

In 1991, federal prosecutors in Brooklyn tried to seize $1 million from one of the Castros' banks, maintaining that the money had been transferred as part of a money-laundering scheme. But the matter was dismissed at the request of federal lawyers before any of the contributions had been made.

The lawyer who represented the Castros at the time, Kenneth Kaplan, said the allegations concerned one of the bank's clients and not the Castros. "The government was not able to prove anything," Kaplan said. "It was dismissed, and that is how it ended."

In the Manhattan Supreme Court case, a jury this week convicted Castro Llanes; his son, Orlando Castro Castro; and Jorge Castro Barredo, a grandson of Castro Llanes, on various charges stemming from the bank collapse in Venezuela. They face sentences ranging from four years to up to 25 years.

Intriago, an expert on money laundering, vehemently denied the prosecutor's assertions yesterday. "It is a bunch of baloney," he said in an interview. "These were my contributions. I did not get anything from anyone offshore."

Pub Date: 2/22/97

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