Fundraising Trial to Start for Aide to Hillary Clinton

A former finance director for Hillary Rodham Clinton goes on trial in a Los Angeles federal courtroom today on charges of lying about the cost of putting on a star-studded fundraiser for the senator’s 2000 campaign, a case being seized upon by some of Clinton’s political enemies.

The New York Democrat has not been charged in the case and is not expected to testify, but the trial is certain to be scrutinized for any revelations that might provide ammunition for those opposing her bid for reelection next year or a possible run for president in 2008.

At least one local veteran political consultant, however, has expressed doubts about whether Sen. Clinton’s political future might be damaged by the case.

“Look, I am no fan of Hillary’s,” said Allan Hoffenblum, a political analyst and former Republican consultant. “But it seems like every politician in office gets accused of improper political contributions these days.

“Goodness, how many people during the Clinton administration were prosecuted or accused of irregularities in fundraising,” said Hoffenblum. “And he still got elected president of the United States.”

Charged with three counts of making false statements to the Federal Election Commission is David Rosen, 40, a Chicago consultant who served as Hillary Clinton’s finance director in 2000 and who more recently worked on retired Gen. Wesley K. Clark’s unsuccessful bid for the Democratic presidential nomination.

Rosen contends he was scammed by two convicted con artists, men the government investigators allegedly relied on to develop their case. Rosen, who is free on bond, could face up to 15 years in prison and a $750,000 fine if convicted.

The allegations involve a lavish party held Aug. 12, 2000, at a Brentwood estate two days before the start of the Democratic National Convention in Los Angeles. Aside from Hillary and Bill Clinton, the event was attended by an array of stars, including Brad Pitt, Jennifer Aniston, Cher, Diana Ross and Muhammad Ali.

Organizers reported raising nearly $1 million for a joint committee that divided the proceeds among Hillary Clinton’s Senate campaign and the national and New York state Democratic parties.

The indictment against Rosen states that he falsely reported spending about $400,000 to put on the extravaganza, when it actually cost more than $1.2 million, including $1.1 million worth of in-kind contributions of goods and services.

Observers familiar with campaign finance law have suggested that it might have freed up more unrestricted campaign funds for Clinton’s successful 2000 Senate bid.

Rosen’s attorney, Paul Mark Sandler, declined Monday to talk about the case. “It would be inappropriate for me to comment, particularly on the eve of trial,” he said.

So far, federal prosecutors have offered no motive for the alleged underreporting, and Justice Department officials have declined to comment about the prosecution.

The source of the unreported contributions has been identified as Peter Paul, a three-time convicted felon who says he helped bankroll the affair in hopes of securing former President Bill Clinton’s participation in an Internet venture he had launched with Stan Lee, creator of Spider-Man.

Paul has filed a lawsuit against the Clintons in Los Angeles County Superior Court for fraud, contending that they turned against him in the venture after learning about his criminal past.

Paul’s lawsuit against the Clintons was prepared by an attorney for Judicial Watch, a conservative watchdog group that has dogged the former president and his wife for years. On Monday, the same group called on the Senate Ethics Committee to investigate Hillary Clinton’s role in the 2000 fundraiser, saying she must have known the financial filings were false.

In March, Paul pleaded guilty to bilking investors in his company, Stan Lee Media Inc., out of $25 million. He faces up to 10 years in prison.

Another organizer of the event was Aaron Tonken, a protege of Paul who is serving a five-year prison sentence for defrauding charities out of hundreds of thousands of dollars.

“Mr. Rosen’s defense is that Tonken and Paul concealed the expenses from him,” Rosen’s defense team asserted in a motion filed recently with U.S. District Judge A. Howard Matz, who will preside over the trial. In fact, they added, the government has convicted both Tonken and Paul for crimes that fit the pattern of the Clinton fundraiser.

Tonken was able to lure Hollywood stars to charity events by providing them with gifts, cash and various perks, all of which he concealed by commingling funds of various events and falsifying financial reports. He pleaded guilty in 2003 to those allegations and to diverting some of the funds for his personal use.

In papers filed with the court last week, the Justice Department moved to bar the defense from introducing any evidence of Paul’s and Tonken’s criminal past, saying those events bore only the most superficial similarity to the charges against Rosen.

The judge’s ruling on the motions could have a major impact on the outcome of the case.

The government says it does not intend to call Paul as a witness but that others will testify that Paul and Tonken, who worked out of the same office as Rosen, complained frequently and loudly about skyrocketing costs in the days leading up to the Clinton gala.

In court documents, the prosecution said a Rosen “confidante” would testify that after questions were raised about the event’s financing, Rosen told him that he would place the blame on Paul and Tonken “and that no one would believe their word over his.”

The “confidante” was not identified. However, the New York Sun and the New York Post have reported that a brother-in-law of Sen. Edward M. Kennedy (D-Mass.) had been working as a confidential informant for federal officials investigating the Rosen case.

Raymond Reggie, a member of a politically prominent Louisiana family, was said to have secretly recorded a conversation he had with Rosen in which they discussed the 2000 California fundraiser.

Reggie, who pleaded guilty in a bank swindle case last month, is the brother of Kennedy’s wife Victoria. For many years, he was involved in Democratic national politics and was a strong supporter of both Clintons.