Hillary's Hollywood Headache
A trial that could have implications for Sen. Hillary Clinton's political future gets underway Tuesday in Los Angeles. While Clinton has not been accused of any wrongdoing, her former finance director is facing criminal charges for under-reporting the cost of a lavish 2000 Hollywood fund-raising party that drew stars like Brad Pitt, Jennifer Aniston, Cher, Diana Ross and Muhammad Ali.
David Rosen, who was Clinton's finance director during her 2000 U.S. Senate run, is facing three counts of filing a false statement. An FBI agent speculated in an affidavit that Rosen was trying to duck federal financing rules so the campaign would have more money to spend on other expenses.
Rosen pleaded not guilty in January. He could face up to 15 years in prison and $750,000 in fines if convicted.
Republicans will be watching the case for any ammunition they can use against Clinton, considered an early front-runner for the 2008 Democratic presidential nomination.
Democratic supporters of Clinton tell CBS News they believe the matter should have been handled as a civil case, not a criminal one. They suggested it was elevated to the criminal courts because of politics.
Rosen, 40, reported the event – called a "Hollywood Gala Salute to President William Jefferson Clinton" – was underwritten by about $400,000 worth of "in kind" contributions — goods and services provided for free or below cost. But Peter F. Paul, a three-time convicted felon who pleaded guilty in March to securities fraud charges, has told prosecutors he gave the campaign at least $1.1 million for the affair.
Paul has filed a lawsuit claiming he bankrolled the gala on a promise that former President Clinton would become a "goodwill ambassador" for his Internet media company. He is ready to testify against Rosen, according to his attorney, Joseph Conway.
Paul is represented in his lawsuit by the U.S. Justice Foundation, a conservative group that's behind the Hillary Clinton Accountability Project, which is dedicated, according to its web site, to educating the public "about the largest federal election campaign fraud ever reported."
The 2000 gala included both a dinner and a concert. About 350 people accepted invitations to both, which cost $25,000 a couple. About 1,200 people purchased $1,000 tickets just for the concert.
Many people got complimentary tickets and campaign reports never gave a full accounting of the total money taken in. However, organizers reported raising nearly $1.1 million for a joint committee benefiting Hillary Clinton's Senate campaign and the national and state-level Democratic parties.Another of the event's organizers, the man who corralled the celebrities, said Rosen was a "decent person" who faced a devil's choice: risk getting fired by exposing the gala's skyrocketing tab or cover up its true cost.
"David I don't think deserves to go to jail," co-organizer Aaron Tonken said in a recent interview from prison, where he is serving 63 months for unrelated charges of defrauding charities of hundreds of thousands of dollars.
Tonken believes the Federal Election Commission should fine Hillary Clinton's campaign.
To build its case, the government enlisted Raymond Reggie, a prominent political consultant whose sister is married to U.S. Sen. Edward Kennedy. Prosecutors have not named Reggie, but two sources familiar with the case said he is the "cooperating witness" identified in court documents.
During a secretly recorded conversation with Reggie in September 2002, prosecutors said Rosen made incriminating statements they will introduce at trial. Reggie pleaded guilty last month in Louisiana to unrelated bank fraud charges.
A request for an interview with Hillary Clinton was referred to her lawyer, David Kendall, who would not comment. Last year, Kendall told The Associated Press that Clinton's campaign properly reported all donations in 2000.
Rosen's attorney, Paul Mark Sandler, also declined to comment.
Also Monday, the conservative group Judicial Watch said it had filed a complaint with the Senate ethics committee against Sen. Clinton in connection with the 2000 fund-raiser.
The group's president, Tom Filton, said, "Mrs. Clinton took $2 million and lied about it and has continued to lie about it."
Filton added that "Hillary Clinton's campaign finance scandal is just as serious as the allegations brought against Tom DeLay, and yet, while DeLay has faced an ethics firestorm, Hillary Clinton's legal and ethical transgressions have been largely ignored."
Filton said his group had formerly represented Peter Paul, but that relationship had turned acrimonious. Still, he said Judicial Watch stands by Paul's charges against Clinton, and that Paul's own criminal problems should "not detract from the credible allegations he has made."