Posts Tagged ‘Department of Justice’

Breaking News: Multiple news organizations are reporting that a federal grand jury has indicted former presidential candidate John Edwards… Watch this space – I will live-blog the indictment as soon as I can get a copy.

Update: Just got the press release and indictment from the Department of Justice. Highlights coming shortly…

Update II: CNN just reported Edwards will make his first court appearance in Winston-Salem, NC at 2:30 this afternoon.

Update III: Multiple news organizations have identified the two unnamed Edwards benefactors in the indictment as Bunny Mellon [Person C] and the late Fred Baron [Person D]

Update IV: Edwards’ attorney Greg Craig issued a statement, saying Edwards “will tell the court he is innocent of all charges, and will plead not guilty. He did not break the law and will mount a vigorous defense.”

Update V: According to my former colleague Kevin Bohn, John Edwards met with Bunny Mellon at her Virginia home last month.

Highlights:

“Family Comes First”: The indictment opens by setting up Edwards’ political image and strategy as a presidential candidate. “A centerpiece of EDWARDS’ candidacy was his public image as a devoted family man. The communication strategy developed by EDWARDS’ campaign stressed the importance of publicizing, among other things, “that [EDWARDS’] family comes first.” [p. 1] CNN’s Jeff Toobin described the document as a speaking indictment, meant to embarrass the subject and paint him in the most unflattering light possible.

Count One: Alleges Edwards and others conspired to accept money from two wealthy donors in excess of limits set by the Federal Election Campaign Act of 1971 [$725,000 and $200,000 respectively], causing the FEC to file false and misleading campaign finance filings with the Federal Election Commission, with the intent of concealing Edwards’ affair with Rielle Hunter to protect his presidential chances. [p.5-7]
Quoting from the indictment: “EDWARDS knew that public revelation of the affair and pregnancy would destroy his candidacy by, among other things, undermining EDWARDS’ presentation of himself as a family man and by forcing his campaign to divert personnel and resources away from other campaign activities to respond to criticism and media scrutiny regarding the affair and pregnancy.” [p.6]

“A Way To Help Our Friend”: In May 2007, person A [based on the description earlier in the document, I assume it’s former Edwards aide Andrew Young] showed Edwards a note written to him by one of the two wealthy benefactors [identified in the indictment as Person C] the month before, which reads:

The timing of your telephone call was “witchy.” I was sitting alone in a grim mood – furious that the press attacked Senator Edwards on the price of a haircut. But it has inspired me – from now on, all haircuts, etc., that are necessary and important for his campaign – please send the bills to me… It is a way to help our friend without government restrictions.

This is in reference to an early Politico scoop revealing the Edwards campaign had spent $400 for the candidate’s haircut at a top Beverly Hills stylist, and the subsequent ridicule that followed. Obama campaign manager David Plouffe later admitted in his memoir that the Obama campaign had been the source of that piece of opposition research: “We did much less of this than many campaigns did, but there were times when we indulged – it was our researchers who found John Edwards’s infamous $400 haircut expenditures.” [David Plouffe, “The Audacity to Win” p. 73]

Follow the Checks
: The indictment says Person C [Mellon] wrote a series of checks between June 2007 and January 2008 made out to a friend, after having already given the maximum amount to the Edwards campaign allowed under federal campaign finance laws. Several of the checks were labeled with misleading labels about furniture in the memo line to hide the fact the money was really going to Edwards. The check amounts ranged from $10,000 to $200,000. [p. 8-9] This friend would forward the checks to Person A [Young], whose wife would endorse the checks in her maiden name and deposit the funds into accounts they both controlled. According to the indictment, this money was used to provide for Person B’s [Rielle Hunter] “rent, furniture, car, living expenses, medical visits, and prenatal care.” [p. 9]

In Hiding: After the National Enquirer broke the story of the Edwards-Hunter affair, the indictment alleges Person D [Baron], having already donated the maximum amount allowed to the Edwards campaign, paid for travel and living expenses for Andrew Young, Young’s family, and Rielle Hunter, “all for the benefit of EDWARDS’ campaign.” The combined transactions were worth $183,083.75 and included chartered airfare to Aspen, Colorado, San Diego, California, and Santa Barbara California, along with hotel and house rental payments. [p. 11]

“Use Cash, Not Credit Cards!”: During the same period, Person D [Baron] was providing Person A [Young] money, including $1,000 in cash delivered in an envelope along with a note which read, “Old Chinese saying: Use cash, not credit cards!” The indictment also says Baron transferred $10,000 to a bank account controlled by Young. [p. 11]

Lies: The indictment cites several comments Edwards made during an interview with ABC News in which he admitted to the affair but denied paternity of Rielle Hunter’s child.

“A Huge Issue”: The indictment says that while working on a statement admitting paternity of Rielle Hunter’s baby, Edwards admitted to a former campaign staffer in June of 2009 that he knew Person D [Baron] had provided money and support to hide Person B [Hunter] from the media. Quoting the document: “EDWARDS further told the employee that this was a huge issue and that for “legal and practical reasons” it should not be mentioned in the statement they were preparing.” [p. 13]

Counts Two Through Five: Alleges that Edwards knowingly accepted contributions from Buny Mellon and Fred Baron exceeding the federal limit on individual donations. [p. 14-17]

Count Six: Alleges Edwards withheld information about hundreds of thousands of dollars in donations from Mellon and Baron from his presidential campaign committee, causing them to file inaccurate campaign finance documents with the FEC. [p. 18-19]

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I’ve been busy working on a story the past few days, hence my lack of blogging. This story will see the light of day soon. I will post it here when it’s ready.

In the meantime, I’ll point out a few recent articles – most of them from Foreign Policy – which I highly recommend reading.

The Antisocial Network: Flashpoint’s Evan Kohlman looks at how cyber-jihadists reacted to the death of Osama bin Laden.

The Cost of Pakistan’s Double Game: RFE/RL journalist Daud Khattak assesses Pakistan’s complicated and contradictory tolerance and ties to jihadist groups and figures living in the country.

Replacing Bin Laden: Al-Hayat journalist Camille Tawil provides more biographical information and analysis about interim al Qaeda leader Saif al-Adel.

Misnomers and Misdirection: In light of Benjamin Netanyahu’s address to Congress earlier this week in which he said “Israel will not negotiate with a Palestinian government backed by the Palestinian version of al Qaeda,” my former professor Daniel Byman looks at the differences between Hamas and al Qaeda.

Disgraced John Ensign Back In Legal Jeopardy: Murray Waas reports that Senator John Ensign’s last-minute decision to release more than 1,000 sensitive emails between himself, his lawyers, and his advisers to Senate Ethics Committee investigators could put him in legal jeopardy with the Department of Justice.

John Edwards Could Be Indicted Within Days: The Department of Justice plans to file criminal charges against former presidential candidate John Edwards, according to the Associated Press. The source says an indictment could come within days unless Edwards cuts a deal with prosecutors and pleads guilty to a negotiated charge.

Federal Prosecutors Try To Force New York Times Reporter To Reveal Sources: ABC News reports prosecutors have subpoenaed Pulitzer Prize-winning reporter James Risen to testify at the trial of former CIA officer Jeffrey Stirling, who is accused of leaking classified information about Iran’s nuclear program to Risen, among other things. Risen plans to ask the court to quash the subpoena, but “sources close to Risen” cited in the article say he is willing to go to jail to protect his sources.

Happy Memorial Day weekend to all!

The report is a doozy (PDF file)…  Will live-blog details as I read them, including quotes and page numbers as necessary (Note: page numbers are based on their number in the PDF file, not the number that appears at the bottom of each).  Watch this space.

REACTIONS:

Statement from Sen. Ensign’s attorney Paul Coggins: “I am confident that the Department of Justice will conclude that Senator Ensign fully complied with the law.”

Separately, spokespersons for the FEC and the Department of Justice declined to comment on the Boxer/Isakson letters referring the case to them.

REPORT DETAILS:

CREW gets a shoutout… Melanie Sloan takes a victory lap: “The Committee’s investigation began after it received a complaint on June 24, 2009, from Citizens for Responsibility and Ethics in Washington ( CREW ). CREW supplemented that complaint on October 6, 2009. These filings presented allegations of sexual harassment/employment discrimination, post-employment ban violations, and issues related to payments to Douglas and Cynthia Hampton, Senator Ensign s former Administrative Assistant and campaign treasurer.” (p. 8 of the file)

Credible evidence of violations: “Based on the record in this matter, the Special Counsel respectfully submits that there is substantial credible evidence that provides substantial cause to conclude that Senator Ensign violated Senate Rules and federal civil and criminal laws, and engaged in improper conduct reflecting upon the Senate, thus betraying the public trust and bringing discredit to the Senate.” (p. 10)

Ensign plays hardball: “When a prominent Nevada constituent declined to hire Mr. Hampton, Senator Ensign instructed John Lopez, his Chief of Staff, to jack him up to high heaven and inform the constituent that he was cut off from Senator Ensign and could not contact him any longer.” (p. 10) Update: More details…  the constituent was identified as Nevada political consultant Sig Rogich.  Looking back on the episode, Lopez later testified: “I just wanted to mention that when the Senator asked me to do that, I really felt like this is wrong. I remember really feeling like that
was abusing the office, you know, cutting someone off from official action because he didn’t hire [Hampton], I thought I had qualms about what I was asked to do.” (p. 29)

Violations of One-Year Ban: Hampton “improperly contacted” on at least 12 different client matters, initiated at least 30 contacts to Ensign’s office and other Senate offices during the one-year ban period. (p. 10)

Office Policies Included Shredding and Gmail Accounts: “Before and after Mr. Hampton’s termination and during the time period when the Senator was helping Mr. Hampton get clients, Senator Ensign instituted office policies that had the effect of making Mr. Hampton’s contacts harder to detect, including a shredding policy, discouraging use of official Senate email accounts in favor of Gmail, and directing that all inquiries of the Committee go through Mr. Lopez, the person he directed to interact with Mr. Hampton.” (p. 11)

$96K Severance Payment: The $96,000 paid to the Hamptons from the Ensign Family Trust Fund constitued a severance payment. Ensign’s affidavit to the FEC saying it wasn’t severance payment is false. (p. 11) Update: Affidavit re: $96K signed by Ensign’s parents saying money was part of pattern of them giving money to the Hamptons, including all expenses paid trip to Hawaii in 2006.  Report calls these affidavits “misleading and potentially false.” (p. 12)

Potential Obstruction of Justice Violations: Ensign deleted documents and files knowing they were likely to be subject to legal claim. Also deleted his personal Gmail account which he used instead of his Senate account. Contents from Gmail account could not be reviewed for the investigation. Ensign deleted at least 5 documents after receiving document retention notice from Ethics Committee in October of 2009.  (p. 13)

Violation of Office Policies: Report says Ensign violated his own office policies regarding sexual harassment and fraternization. Report says Ensign engaged in behaviors that would have led to the termination of one of his employees according to his own office policy. (p. 13)

Affair Began After Burglary: After burglars broke into the Hamptons’ Nevada home, Ensign allowed them to stay at their place until the door was repaired and Cynthia Hampton felt safe to go back to the house. The affair began shortly after the Hamptons moved into the Ensign home. (p. 18)

Losing His Mind: When Ensign began pursuing Cynthia Hampton, “She asked Senator Ensign if he lost [his] mind, and he replied yes.” (p. 18)

Late Night Fodder Material: Hampton’s reaction after finding out about the affair – “When the cars were parked in the airport parking lot, Mr. Hampton jumped out of his car and chased Senator Ensign in the airport parking lot.” (p. 19)

What Happens in Vegas: Ensign and Hampton ended the affair around Christmas of 2007, but resumed again a month later. They would have trysts in Vegas hotel rooms reserved in her name, because “it always had to be under my name, it could never be under his name.” (p. 19)

Big Phone Bill: Hampton found out affair was continuing in February 2008 after discovering text messages on Ensign phone during CODEL trip to Iraq and Afghanistan. The phone bills for the calls during the trip totaled nearly $1,000. (p. 19-20)

“Put Your Pants On”: Sen. Tom Coburn, Hampton and others confront Ensign about the affair on Valentine’s Day, 2008. Ensign writes letter to Cynthia Hampton breaking it off but later admits it was a lie. Two days later, Hampton sees his wife’s and Ensign’s cars parked outside a hotel near their neighborhood and calls Ensign spiritual advisor Tim Coe. Coe calls Ensign, telling him I know exactly where you are. I know exactly what you are doing. Put your pants on and go home.” A few days later, Ensign tells Hampton he loves Cynthia and wants to marry her, and that he can’t work for him anymore. (p. 20)

I Wish I Knew How To Quit You: Ensign separates from his wife and moves in with his parents, and the affair continues through July 2008. Ensign bought two cell phones so they could communicate directly, and created fake Yahoo addresses for both of them.  Coe has Sen. Tom Coburn call Ensign’s father and tell him about the affair.  According to him, the call happened, and Ensign called him in a rage after hearing about his father. (p. 20-21)

Not a Happy Ending: The report notes that Cynthia Hampton has filed for divorce and bankruptcy proceedings, and is moving to California to work for an unidentified Christian organization. (p. 22)

Leaving Las Vegas: Plan to separate Hamptons from Ensign included possibility of moving them to Colorado and having Ensign take over mortgage on Hampton’s home in Vegas or buying it outright. Ensign not happy about idea of buying the house, says his father won’t help with the finances of helping the Hamptons relocate. (p. 22-23)

Coburn’s Role: “According to Mr. Coe, Doug was more confident talking to Senator Coburn about finances than he was us, and Mr. Hampton thought Senator Coburn could deliver John s father, who was wealthy. Senator Coburn played a support role, and encouraged Senator Ensign to consider the plans developed by Mr. Coe and others regarding transition and separation.” (p. 23)

Not-So-Golden-Parachute: During a lunch in Vegas, Ensign tells NRSC aides Michael and Lindsey Slanker that Hampton is leaving his office, but lies about the reasons why. The Slankers come up with idea of having Hampton work at their political campaign consulting firm November Inc. as a “platform” for his work. If Hampton could get clients, he could use November Inc. as “the business card.” Ensign’s response to the idea was “giddy” and he immediately called Hampton to tell him of the plan. (p. 23-24)

Pink Slip: Ensign fires Cynthia Hampton from her job in March of 2008, saying his father and wife wouldn’t allow her to continue working for him. (p. 24)

Severance Pay: The $96K severance package was calculated based on 2 months’ pay for him, a year’s pay for her. Here’s where the plot thickens: “The two discussed gift rules and tax law, and splitting up the payments into various amounts, totaling $96,000, as a way to avoid the payment of taxes on the amount.” (p. 25)

Vacation Money: In addition to the $96K, Hampton received $6K in his final paycheck from Ensign’s Senate office for 12 unused vacation days, which in fact he may have used. Report notes “his work attendance was significantly less in the months leading up to April 2008. Therefore, there were likely no vacation days available to Mr. Hampton upon his departure from the Senate.” (p. 27)

The I-word: Ensign’s chief of staff John Lopez testified before the Ethics Committee Special Counsel under a grant of immunity. (p. 28)

Not a Coincidence: “The timing of Senator Ensign’s interest in the destruction of records and communication with oversight committees coincides with the affair with Cindy Hampton, and Mr. Hampton s departure.” (p. 29)

Preparing to Lobby: “Mr. Hampton, because of his salary level, was required under Senate Rule 37 to notify the Ethics Committee within three days of commencing any negotiations for prospective private employment, and to immediately recuse himself from legislative matters affecting that prospective employer. Committee Staff and Special Counsel were unable to find evidence that Mr. Hampton ever filed such a notification.” Hampton left the Senate on May 1, 2008, and the report notes “Mr. Hampton was banned from contact with the Senate effective May 2, 2008,” because of ethics rules. However, the report says that just five days later, he e-mailed Ensign aide David Quinalty regarding FAA issues on behalf of a Nevada client. Ensign’s legislative staff figured out the implications of the email pretty quickly.

“Mr. Quinalty testified that in every way I could think of, [this email] struck me as inappropriate and odd and something I should take note of. Mr. Quinalty immediately took the email to Pam Thiessen. Ms. Thiessen testified that upon review of the email, she concluded that it look[ed] like he [Hampton] broke the law, broke the ethics ban. Ms. Thiessen had Mr. Quinalty print out multiple copies, and gave one to Mr. Mulvihill, with instructions to take it to the attention of the Ethics Committee. Ms. Thiessen then spoke with Mr. Lopez, and stated that on its face [the email] was illegal. So I told John Lopez this is illegal activity, that it’s got to stop, and that Doug Hampton was being cut off from the leg. [legislative] shop. Ms. Thiessen then announced to the entire legislative staff that Mr. Hampton had broken the law and no one was to help him. Members of Senator Ensign’s legislative staff recalled this announcement in their testimony.”(p. 31-32)

Compartmentalized Contacts: Ensign and Lopez agree to limit all dealings between Hampton and the office to the two of them, effectively removing the rest of the staff from the process. Lopez told him about the ethics concerns about Hampton’s lobbying efforts, to which Ensign responded with what Lopez described as a “see no evil, hear no evil” attitude. Lopez was ignorant about the affair until Ensign called a staff meeting to announce it in 2009. (p. 34-35)

Coburn the Negotiator?: Hampton’s lawyer testifies that Coburn acted as a negotiator between him and Ensign for a possible multimillion dollar settlement on behalf of his clients. Coburn denies it in testimony to the committee. This discrepancy could come back to haunt Coburn. Stories with headlines like “Tom Coburn gets new scrutiny in Ensign scandal”  and a lead paragraph alleging “the Oklahoma Republican may have not been completely candid when questioned by Senate investigators about the still unfolding scandal,” are not good. (p. 44-45)

Going Public: After hearing of Ensign’s rejection of the offer, Hampton decided to go to the media with his case, writing a letter to Fox News anchor Megyn Kelly. A few days later, Hampton forwarded a copy of the letter to Sen. Rick Santorum, at the time a paid Fox News contributor. Santorum tipped off Ensign, and this forced him to make a public statement admitting to the affair in June of 2009. (p. 45)

Semantics About Severance: Staff and counsel reviewing his prepared text announcing the affair suggested removing all references to severance or payments. Attorney Chris Gober explained the legal concerns in an email to Ensign’s communications director:

“[t]he statement, as currently written, raises a host of
potential criminal issues for the Senator. The language
draws a direct connection between the affair, the
termination of the staffers, and the severance payment.
Although the statement attempts to legitimize the reason for
the payment, it’s awfully odd that he made the payments
from personal funds. If this statement doesn’t get the
attention of the U.S. Attorney’s Office, then nothing will.” (p. 48)

Questions About Ensign FEC Affidavits: The report alleges that Senator Ensign and his parents may have been less than truthful in affidavits they filed with the FEC regarding the $96K. “The affidavits of the senior Ensigns and of Senator Ensign appear to be misleading and potentially false on the central issue of the FEC investigation the nature of the $96,000 payment from the senior Ensigns to the Hamptons and the purported pattern of generosity from the senior Ensigns to the Hamptons.” The Special Counsel says that inconsistencies between facts and affidavits merit further investigation by DOJ and FEC. (p. 51-52)

The Senate Ethics Committee just published its findings on the John Ensign investigation.  It also published letters referring the case to the Department of Justice and the Federal Election Commission saying Ensign and others had violated laws relating to their relevant jurisdictions.

Stay tuned for more details.

Looks like scams in Nigeria aren’t limited to Internet hoaxes.

The government’s top contractor in Iraq, KBR, Inc., has pleaded guilty to bribing high-level officials in the Nigerian government during a decade-long scheme to win more than $6 billion in overseas construction contracts, federal authorities announced on Wednesday.

KBR and its former parent company, Halliburton, agreed to pay the government a combined $579 million in fines to settle the criminal and civil charges, the most ever paid by a U.S. firm in a foreign corruption case.

“Today’s guilty plea by KBR ends one chapter in the department’s long-running investigation of corruption in the award of $6 billion in construction contracts in Nigeria,” said Rita Glavin, acting assistant attorney general in the Justice Department’s criminal division. “This bribery scheme involved both senior foreign government officials and KBR corporate executives who took actions to insulate themselves from the reach of U.S. law enforcement.”

KBR was part of a joint venture of four companies — the other three firms involved were not identified — that was awarded four contracts between 1995 and 2004 to build liquefied natural gas facilities on Bonny Island, Nigeria, on Africa’s West Coast.

During that time, federal officials said the joint venture paid top officials in the Nigerian government, including members of the Nigerian National Petroleum Corporation, more than $182 million in bribes.

If this story had come out during 2000 or 2004, the Democrats would have hammered Dick Cheney relentlessly for it, since this happened during his tenure as CEO from 1995 to 2000. The Government Executive story does not mention Cheney, nor does the 51-page plea agreement filed in a Houston federal court, and make no accusations of wrongdoing on his part. Bart Gellman in his exhaustively researched and well written Cheney biography Angler found no evidence that he ever used his position as vice president to benefit Halliburton, which for years was practically the left’s equivalent of the Saddam Hussein-Al Qaeda connection.

Still, both KBR and Halliburton have taken a PR beating in recent years, between this and allegations of overbilling and lousy services in Iraq. Having to pay a $679 million settlement to the Justice Department during these tough economic times cannot be fun for the board or the shareholders.