VIA HAND DELIVERY

 

May 6, 2005

 

The Honorable George V. Voinovich, Chairman                       

The Honorable Tim Johnson, Vice Chairman

The Honorable Pat Roberts

The Honorable Daniel Akaka

The Honorable Craig Thomas

The Honorable Mark Pryor

UNITED STATES SENATE SELECT

  COMMITTEE ON ETHICS             

220 Hart Senate Office Building

Washington, DC  20510

 

 

Re:  Ethics Complaint Against Senator Hillary Rodham Clinton of New York

 

Dear Senators:

 

            Judicial Watch, Inc. respectfully submits this sworn complaint against Sen. Hillary Rodham Clinton pursuant to Rule 2 of the Rules of the Select Committee on Ethics, S. Res. 388, 88th Cong., 2d Sess. (1964), as subsequently amended.

 

            It is well-established that the Senate may discipline a Member for misconduct.  Senate Ethics Manual, 2003 ed., at 13 (citing S. Rep. 2508, 83d Cong., 2d Sess. 20, 2 (1954).  Members may be disciplined for any misconduct that reflects unfavorably on the Senate as a whole, regardless of whether it relates directly to the Member’s official duties.  Id.  In this regard, it is the duty of the Select Committee on Ethics to:

 

[R]eceive complaints and investigate allegations of improper conduct which may reflect upon the Senate, violations of law, violations of the Senate Code of Official Conduct, and violations of rules and regulations of the Senate, relating to the conduct of individuals in the performance of their duties as Members of the Senate, or as officers or employees of the Senate, and to make appropriate findings of fact and conclusions with respect thereto.

 

Id. (quoting, S. Res. 338, as amended by S. Res. 222 (106th Cong., 1st Session)).

 

Judicial Watch, Inc. respectfully submits that Sen. Clinton should be investigated and disciplined for violating federal campaign finance reporting laws in connection with an August 12, 2000 fundraiser for her U.S. Senate campaign and for engaging in conduct that reflects unfavorably on the Senate as a whole. 

 

            It cannot be denied that this is a very serious matter.  David F. Rosen, the Director of Finance for Sen. Clinton’s 2000 election campaign, is under indictment for causing false reports to be submitted to the Federal Election Commission (“FEC”) in connection with the August 12, 2000 fundraiser.  See Indictment in U.S. v. David F. Rosen, 03-CR-1219 (C.D. Calif.), attached as Exhibit 1.  His trial is scheduled to begin in early May 2005 in the U.S. District Court for the Central District of California.

 

            Yet it also is clear from the sworn statements of Mr. Peter F. Paul, the underwriter and executive producer of the August 12, 2000 fundraiser, and the public statements of Mr. Aaron Tonken, who produced the August 12, 2000 event, that none of the monies expended by Mr. Paul were reported to the FEC and the true cost of the event was significantly under reported.1

 

            The facts of the matter are as follows:

 

            Mr. Paul has testified by sworn declaration that, in early July of 2000, he was induced by Sen. Clinton, Mr. Rosen, and Mr. Tonken, among others, to underwrite and serve as executive producer of a major fundraising event for Sen. Clinton’s 2000 campaign.  See Affidavit of Peter F. Paul (“PFP Aff.”), attached as Exhibit 2, at para. 2 and First Amended Complaint, attached thereto, at paras. 33-46.2 

 

            The event, which became known as the “Hollywood Gala Salute to President William Jefferson Clinton,” was held at the estate of Mr. Ken Roberts in Los Angeles, California.  See PFP Aff. at para. 2 and First Amended Complaint at para. 48.  It included a $25,000 per couple dinner and a $1,000 per ticket concert that featured performances by several world-class artists, including Cher, Diana Ross, Paul Anka, Michael Bolton, Toni Braxton, Melissa Ethridge, Patti Labelle, and Mark McGrath and Sugar Ray.  Id. 

 

            Mr. Paul has documented making payments totaling $1,011,188.10 for expenses associated with the Hollywood Tribute.  See Aff. of PFP at para. 3.  He has also documented transferring $207,000 in cash and $336,250 in stock to Mr. Tonken, which he has testified was  used to pay for additional expenses associated with the event.  Id. at paras. 5-7.

 

            Mr. Paul also has testified that, in addition to paying the expenses associated with the August 12, 2000 fundraiser, he also paid for expenses associated with the appearances of the artists who performed at the event and donated the use of his office space, equipment, utilities, supplies, and staff for the event.  See PFP Aff. at para. 2 and First Amended Complaint at paras. 54 and 74.

  

             In total, Mr. Paul has testified that he believes he paid in excess of $1.9 million to produce and underwrite the August 12, 2000 fundraiser.  See PFP Aff. at para. 2 and First Amended Complaint at para. 74.  However, Sen. Clinton’s campaign filings failed to report any of the expenses paid by Mr. Paul for the Hollywood Tribute.  See PFP Aff. at para. 11 and Exhibit TT.  Nor did New York Senate 2000, a joint fundraising committee authorized by Sen. Clinton’s campaign, the Democratic Senatorial Campaign Committee, and the New York State Democratic Party, report any of Mr. Paul’s expenses for the event.  See PFP Aff. at para. 12 and Exhibit UU.  New York Senate 2000’s Schedule H-3 for the August 12, 2000 fundraisers (referred to in the FEC reports as Event 39) reported that only $401,419 worth of in-kind contributions and donations were received for the event.  Id.; see also Exhibit 1 at para. 20.

 

            Mr. Paul’s testimony and other information demonstrate that, at all relevant times, Sen. Clinton and her campaign knew and understood that Mr. Paul was spending well over $1 million, not including substantial amounts of Mr. Paul’s own time and resources, on the Hollywood Tribute: 

                                   

            •           Mr. Paul has testified that, during the course of negotiations with Hollywood producer Gary Smith regarding his fee for producing the concert portion of the event, he was told that Sen. Clinton personally intervened to convince Mr. Smith to reduce his fee by $50,000.  See PFP Aff. at para. 2 and First Amended Complaint at paras. 50-51.  Mr. Tonken has confirmed Sen. Clinton’s involvement in these negotiations.  See Excerpt from Tonken, Aaron, King of Cons, (Nelson Current 2004), attached as Exhibit 3, at 306.   

 

            •           Mr. Paul has testified that Sen. Clinton and her campaign knew he was spending well over $1 million on the August 12, 2001 fundraiser, and, in the weeks leading up to the event, Sen. Clinton and President Clinton made at least three telephone calls to Mr. Paul to thank him for his generous financial support and to encourage him to continue.  See PFP Aff. at para 2 and First Amended Complaint at para. 66.                                                          

 

            •           Mr. Paul has testified that, at a brunch at the home of Barbara Streisand and James Brolin on the day after the Hollywood Tribute, August 13, 2000, Sen. Clinton introduced Mr. Paul’s wife to Ms. Streisand as the person who, along with her husband, had underwritten the Hollywood Tribute the previous night.  See PFP Aff. at para. 2 and First Amended Complaint at para.  75.  President Clinton introduced Mr. Paul’s wife to Mr. Brolin in an identical manner. Id. 

 

            •           Mr. Paul has testified that, on the evening of August 13, 2000, Sen. Clinton telephoned him at his home to thank him again for underwriting and serving as executive producer of the Hollywood Tribute.  See PFP Aff. at para. 2 and First Amended Complaint at para. 78.  During the conversation, Sen. Clinton expressed how important the event was to her campaign.  Id. 

 

            •           On August 17, 2004, The Washington Post reported that Sen. Clinton’s campaign spokesman, Howard Wolfson, admitted that the estimated cost of the event was over $1 million and that “it was an in-kind contribution . . . and not a check.”  See PFP Aff. at para. 2 and First Amended Complaint at para. 80; see also Lloyd Grove, “Hillary Returns Bucks to Ex-Felon, The Washington Post, August 17, 2001, attached as Exhibit 4.

 

            •           On August 18, 2000, both the President and Sen. Clinton wrote personal “thank you” notes to Plaintiff.  See PFP Aff. at para. 10 and Exhibit SS.  President Clinton’s handwritten note thanked Plaintiff “for the wonderful event,” and stated, “I am very grateful for the boost it gave Hillary’s campaign.”  Id.  Sen. Clinton thanked Plaintiff for his friendship and for the event.  Id.

 

            •           Mr. Tonken has stated that, shortly before the November 2000 election, he personally told Sen. Clinton about the monies spent on her behalf for various campaign events:

 

I’d spent odd moments along with [Sen. Clinton] before, primarily in the evening at the White House.  But this was my first real shot to talk to her with no one else around, and what I wanted was to let her know how much I admired her, how much I was behind her, and most important, what I had already done for her.  It was, quite by accident, the moment of truth.

 

I didn’t know how you earned someone’s trust and friendship except by giving them money and gifts and doing extravagant favors for them.  I liked Hillary Clinton so much and wanted so badly for her to be my friend.  So I did the only thing I understood:  I told her about virtually every penny I’d ever spent on her behalf.  I let her know what I was doing and had done for each event of hers.  I spoke about the money and what a pleasure and honor it was to spend it on her candidacy for the U.S. Senate.  See Exhibit 3 at 365 (emphasis added).

            Sen. Clinton was elected to the U.S. Senate on November 7, 2000.  Mr. Paul has testified that, after the election, he repeatedly attempted to contact Mr. Rosen to review the expenses he incurred in underwriting and serving as the executive producer of August 12, 2000 fundraiser, but Mr. Rosen would never meet with him.  See PFP Aff. at para. 2 and First Amended Complaint at paras. 98 and 106.  Mr. Paul has also testified that, in late February 2001, he reviewed Sen. Clinton’s campaign filings on the FEC’s website and discovered that none of his expenses had been reported.  See PFP Aff. at para. 2 and First Amended Complaint at para. 106. 

 

            The only report of any possible involvement by Mr. Paul in the August 12, 2000 event is a January 31, 2001 report of a $366,564.69 payment received by New York Senate 2000 from Stan Lee Media, Inc., a company founded by Mr. Paul and Spider-Man creator Stan Lee.  This report is clearly false, as Mr. Paul, not Stan Lee Media, Inc., underwrote the event.  See PFP Aff. at para. 12 and Exhibit UU. 

 

            In addition, an affidavit of FBI Special Agent David C. Smith, who interviewed Stan Lee Media, Inc.’s accountant, Junko Kobayashi, in August 2001, confirms that Stan Lee Media, Inc. did not pay any of the expenses associated with the Hollywood Tribute, and SA Smith has concluded that the true cost of the August 12, 2000 was deliberately understated.  See Affidavit of David C. Smith, attached as Exhibit 5, at paras.8 and 9.

 

            In June 2001, Mr. Paul filed suit against Sen. Clinton, her campaign, New York Senate 2000 and others, challenging their failure to report his expenditures for the August 12, 2000 fundraiser, among other legal claims.  Sen. Clinton, her campaign, and New York Senate 2000 were served with copies of Mr. Paul’s complaint in early July 2001.  See Summonses and Complaint in Paul v. Clinton, et al., Case No. BC252654 (Los Angeles Co. Sup. Ct.), attached as Exhibit 6.  In July 2001, Mr. Paul also wrote to Sen. Clinton in July 2001 and challenged her failure to report his expenditure for the August 12, 2000 fundraiser to the FEC.  See July 16, 2001 Letter from Peter F. Paul to Hillary Rodham Clinton, attached as Exhibit 7.

 

            Even after Mr. Paul filed suit against Sen. Clinton, her campaign, and New York Senate 2000, and even after Mr. Paul wrote to Sen. Clinton in July 2001 and challenged her failure to report his expenditures for the August 12, 2000 fundraiser to the FEC, neither Sen. Clinton, her campaign, nor New York Senate 2000 took any remedial action.  To the contrary, Sen. Clinton, her campaign, and New York Senate 2000 continued to hide Mr. Paul’s involvement in the fundraiser and to underreport the true cost of the event.  On July 30, 2001, approximately two weeks after Sen. Clinton, her campaign, and New York Senate 2000 were served with Mr. Paul’s complaint and approximately two weeks after Mr. Paul wrote to Sen. Clinton about the failure to report his expenditures to the FEC, New York Senate 2000 amended its October 2000 Quarterly Report and responded to a request from the FEC for more information about the event (referred to as Event 39 in New York Senate 2000’s FEC reports), but made no effort to correct the glaring omission of any of Mr. Paul’s expenditures on the event.  See July 30, 2001 Letter from Andrew Grossman, Treasurer of New York Senate 2000 to Colleen Manning of the FEC, attached as Exhibit 8. 

 

 

 

 

III.       Conclusion.

 

            Sen. Clinton, her campaign, and New York Senate 2000 have failed to comply with federal campaign finance laws and requirements, and Sen. Clinton has engaged in conduct that reflects unfavorably on the Senate as a whole.  The Senate has the independent authority and its own interest, if not an obligation, to investigate and punish Members’ misconduct.  The interests the Senate seeks to vindicate through its inquiry and investigation processes clearly are separate from the interest of federal prosecutors.  This is especially the case here because the Secretary of the Senate serves as the custodian of Senate candidates’ campaign finance reports and the submission of false campaign finance reports thus works a fraud upon the Senate.  Accordingly, Judicial Watch, Inc. respectfully requests that the U.S. Senate Select Committee on Ethics conduct a thorough investigation into the matters set forth herein and take all appropriate disciplinary action against Sen. Clinton.

 

Sincerely,

 

JUDICIAL WATCH, INC.

 

 

 

Thomas Fitton

President

 

 

DISTRICT OF COLUMBIA   )

                                                )           ss:

CITY OF WASHINGTON     )

 

 

            Subscribed and sworn before me this _____ day of May, 2005 by Thomas Fitton.

 

 

                                                                                    ______________________________

                                                                                    Christopher J. Farrell

                                                                                    Notary Public

                                                                                    Commission Expires: 11/14/09

 

 

 

cc:        Senator Hillary Rodham Clinton

            Robert L. Walker, Esq., Chief Counsel and Staff Director


            1           In March 2005, Mr. Paul pled guilty to one count of stock manipulation after being indicted on various federal charges in New York and Los Angeles.  He also has three (3) prior felony convictions dating from the late 1970’s and mid-1980’s.  Mr. Tonken is currently serving a sixty-three month sentence on federal fraud charges arising from his activities in connection with several charitable fundraisers. 

            2           Mr. Paul has been engaged in litigation with Sen. Clinton and others regarding  August 12, 2000 fundraiser and other related matters for several years.  During the course of this litigation, in which Mr. Paul was represented by Judicial Watch, Inc., Mr. Paul signed and submitted the attached affidavit to the court.  Judicial Watch, Inc. has ceased to represent Mr. Paul.