Ex-Aide to Sen. Clinton Denies Ordering That Costs of Fundraiser Be Concealed

Times Staff Writer

Taking the witness stand in his own defense, Democratic fundraiser David Rosen categorically denied Tuesday that he ordered associates to conceal the cost of a star-studded gala held to raise money for Sen. Hillary Rodham Clinton’s 2000 election campaign.

“I’m 100% innocent of these charges,” the political consultant told jurors as his 3-week-old trial in Los Angeles federal court neared an end.

Rosen, 38, who served as national finance director for Clinton’s New York Senate campaign, had been charged with three counts of causing the campaign to file false reports with the Federal Election Commission.


But before Tuesday’s proceedings began, U.S. District Judge A. Howard Matz threw out one those charges, saying the Justice Department failed to show that Rosen was involved in the preparation of that report.

The FEC reports dealt with an extravaganza attended by President Bill Clinton, his wife Hillary Clinton and an A-list of Hollywood stars on a sprawling Mandeville Canyon estate just before the 2000 Democratic National Convention in L.A.

The event, which netted $1 million in contributions, featured a $1,000-per-person cocktail party, a $25,000-a-couple dinner and a pop music concert. Final expenses were reported as $401,000. But according to Justice Department lawyers, Rosen was responsible for concealing more than $700,000 in actual costs.

His motive, they said, was to keep the Clinton campaign from having to transfer matching funds from its “hard” money account, which was earmarked for direct advocacy on behalf of the candidate. Hillary Clinton was unaware of any wrongdoing, according to the prosecution.

Rosen blamed the under-reporting of expenses on the gala’s chief sponsor, businessman Peter Paul, a three-time convicted felon who volunteered to underwrite the event, and on Paul’s protege, Aaron Tonken, now serving a five-year prison sentence for defrauding charities.

Rosen contended that Paul and Tonken concealed the true costs from him. At the time of the fundraiser, Paul was running Stan Lee Media, a publicly traded Internet venture, in collaboration with “Spider-Man” creator Stan Lee. Paul was subsequently convicted of cheating investors out of millions of dollars. The company went out of business.

Neither Paul nor Tonken was subpoenaed to testify in the case, though their roles in bankrolling and planning the Clinton fundraiser were the subject of considerable testimony.

Several prosecution witnesses said they heard Paul and Tonken complain loudly and often that the costs were spiraling out of control, but Rosen testified Tuesday that neither man had complained to him. Rosen also disputed the testimony of two fellow Democratic fundraisers who said Rosen had expressed concern about the event’s costs.

James Levin, a Chicago businessman and fundraiser, was described as President Clinton’s “eyes and ears” at the event. He recently agreed to plead guilty to federal bribery, conspiracy and fraud charges.

Levin said he and Rosen had a conversation on the eve of the fundraiser in which both men expressed dismay over the mounting costs. “The cost of this event will never be the cost of this event,” Levin quoted Rosen as saying. On Tuesday, Rosen denied making that remark.

Also testifying against Rosen was Raymond Reggie, a member of a politically prominent Louisiana family whose sister is married to U.S. Sen. Edward M. Kennedy (D-Mass). Reggie recently pleaded guilty to federal bank fraud and check-kiting charges. Like Levin, Reggie said he was cooperating with prosecutors in hopes of getting a lighter sentence.

Reggie recalled a heated exchange between Rosen and Kelly Craighead, one of Hillary Clinton’s top aides, about the gala’s escalating budget.

“I’m the fundraiser and I have it under control,” Reggie quoted Rosen as telling her. But a few days later, Reggie said, Rosen confided that he was being “crushed” by last-minute cost overruns. On the witness stand Tuesday, Rosen said the conversations never occurred.

Rosen also disputed the testimony of Bretta Nock, an event planner who was hired by Tonken to oversee planning and budgeting for the gala.

Nock testified that Rosen directed her to shave costs from a final accounting that was to be submitted to the Hillary Clinton campaign after the L.A. fundraiser. Rosen denied that and insisted he had little to do with the preparation of budgets or financial forms. Rosen said Nock dealt directly with the campaign’s compliance officer.

Testimony is expected to conclude today.