2000 gala for Clintons probed by FEC

Event raising $1 million for N.Y. senator also investigated by grand jury

April 18, 2004|By Michael Cieply and James Bates | Michael Cieply and James Bates,LOS ANGELES TIMES

The Federal Election Commission is investigating a Hollywood gala that raised more than $1 million for Hillary Rodham Clinton's 2000 Senate campaign, according to people familiar with the probe.

The FEC investigation, launched several weeks ago, comes atop a U.S. Justice Department inquiry that has focused in recent months on the event and former Clinton finance executive David Rosen.

In addition, documents reviewed by the Los Angeles Times indicate that a federal grand jury in Los Angeles has been examining evidence of wrongdoing by a number of people in connection with the activities of Aaron Tonken, the fund-raising impresario behind the event.

The scope of the grand jury inquiry and the identity of its targets remained unclear. The Justice Department is believed to be focusing on whether anyone made false statements about how contributions were collected and disbursed.

Tonken, who peaded guilty in December to two fraud counts in connection with his high-profile charity galas, has been cooperating with federal authorities while awaiting sentencing, according to people familiar with his case.

Since last month, FEC investigators have been seeking testimony from a number of witnesses with knowledge of the August 2000 political gala.

Held on the eve of the Democratic National Convention in Los Angeles, the event at the estate of radio mogul Ken Roberts was billed as a tribute to outgoing President Bill Clinton. But the gala simultaneously gave a much-needed cash infusion to the then-first lady's successful Senate campaign.

Internet entrepreneur Peter Paul - who paid for the event and is awaiting trial on federal charges of business-related fraud - unsuccessfully asked the commission nearly three years ago to investigate the Clinton campaign for allegedly underreporting his contribution.

At the time, Paul was jailed in Brazil, awaiting extradition to the United States. He is being held without bail in Long Island, N.Y.

Paul is among those asked recently to cooperate with the election commission probe, according to people with knowledge of the situation.

The event he helped underwrite has been estimated to have cost as much as $2 million, including expenses associated with a roster of star entertainers. This year, Paul sued the Clintons and others in Los Angeles Superior Court, claiming that they defrauded him in connection with the fund-raiser.

David Kendall, who represents the Clintons in the suit, said he plans this month to seek a dismissal.

Kendall declined to discuss the Justice Department probe and referred questions about the election commission action to another attorney, who did not return calls.

An attorney for ex-finance chief Rosen did not respond to a request for comment. Based in Chicago, Rosen is a longtime political money consultant who recently worked on retired Gen. Wesley K. Clark's failed presidential campaign.

A commission spokesman declined to comment on the investigation; a spokesman for the U.S. attorney's office in Los Angeles could not be reached for comment.

Last week, at a creditors' meeting in Tonken's Chapter 7 bankruptcy case, Tonken refused several dozen times to answer questions, invoking his right against self-incrimination.

The Los Angeles Times is a Tribune Publishing newspaper.

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