Former NJ city councilman sentenced to 18 months in prison

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Former Hoboken councilman and commissioner on the North Hudson Utilities Authority, Michael Schaffer, was sentenced Tuesday to 18 months in prison for funneling illegal cash contributions into the election campaign of former Hoboken Mayor Peter Cammarano.

Former Hoboken councilman, Michael Schaffer, took $25,000 in cash from an FBI undercover informant, as an advance against future favorable votes from the city's mayor.

Schaffer was arrested in July 2009 as part of a three year corruption investigation that targeted local public officials and the religious community. He was charged with taking $25,000 in illegal campaign contributions from a crooked developer-turned-FBI informant, Solomon Dwek.

Schaffer was caught on surveillance tapes taking cash from Dwek in exchange for future votes and zoning approvals, on real estate development projects that Dwek claimed to be planning. Much of the cash was handed over in $5,000 stacks of $100 bills, in FedEx mailing envelopes.

Schaffer took $15,000 from Dwek when Cammarano was running for mayor, and another $10,000 after Cammarano was elected. Cammarano was arrested less than 30 days after taking office and later pleaded guilty to receiving the illicit contributions. He is now serving a 24-month sentence in a federal prison.

The developer, Solomon Dwek, agreed to be an FBI undercover witness after he was taken into custody for a $50 million bank fraud involving PNC Bank. Dwek helped federal authorities conduct a wide-ranging public corruption and money laundering probe that ultimately resulted in charges against 44 politicians and rabbis in New Jersey and New York.

more coverage at The Jersey Journal

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House lawmakers create a mess by skipping swearing-in ceremony

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A number of votes cast by two Republicans who skipped Wednesday’s swearing-in ceremony were nullified on Friday, helping to straighten out a procedural mess caused by their absence. Reps. Mike Fitzpatrick (R-Pa.) and Pete Sessions (R-Texas) were at a reception on late-Wednesday during the administration of the oath by Speaker John Boehner on the House floor.

The men took the oath watching the House ceremony on TV at the Capital Visitor Center, while attending a reception for several hundred of Fitzpatrick supporters. The Constitution requires that all members swear to the oath before taking office.

When House leaders learned that the two men had skipped the swearing-in ceremony to attend a reception organized by Fitzpatrick supporters elsewhere in the Capital, they were uncertain whether the motions the men voted on were invalid. House rules require the oath be administered in person by the Speaker.

A cleanup resolution was passed on Friday, 257-159, largely along party lines. It acknowledges the men were not sworn in according to the Constitution and House rules and nullifies their first five votes. Session’s work in a meeting of the Rules Committee, where he is the second highest member, was ratified.

On Friday, Fitzpatrick and Sessions sent a letter to House Speaker John Boehner of Ohio, expressing their regret over the incident.

“We are deeply committed to fulfilling our role in our constitutional democracy by maintaining the integrity of the People’s House. Our absence on the House floor during the oath-of-office ceremony for the 112th Congress – while not intentional – fell short of this standard by creating uncertainty regarding our standing in this body,” said the letter.

One group, Citizens for Responsibility and Ethics in Washington, said they would ask the Office of Congressional Ethics to look into the reception organized by Fitzpatrick, saying that it was a fundraiser, and violated laws against campaign fundraising on federal property.

Participants at the reception paid $30 for a round-trip bus ride from Pennsylvania to D.C., and the form which they filled out listed the amount as a “contribution.” The form asks that checks be made out to Fitzpatrick’s campaign committee.

Fitzpatrick spokesman Darren Smith said the reception was free, and open to everyone, including those who drown down from Pennsylvania on their own. “The $30 was for the cost of the bus, that’s it,” he wrote in an email.

Others in Washington are taking it far more seriously. Meredith McGehee, policy director for the nonpartisan Campaign Legal Center said she believes that Fitzpatrick seems to have broken campaign finance laws. She said the House ethics committee should look at the reception and determine what type of events lawmakers are permitted on federal property.

“I don’t look at this and say, ‘My God, how venal,'” she said. “I say, ‘Here’s a guy who misses his own swearing-in and then goes and reads the Constitution.’ How ironic. It does show how much the money system has become wrapped up in being a member of Congress.”

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New U.S. congressman scrambles to cover trail on unreported loans and criminal investigations

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Freshman congressman, David Rivera, from Florida’s 25th district, was sworn in this week amid an unfolding controversy regarding previously undisclosed loans from a company controlled by his mother and godmother, which is under investigation by the state attorney’s office, the Miami-Dade Police Department and the Florida Department of Law Enforcement.

Rivera’s troubles are connected to a consulting contract that he secured in 2006 while a  member of Florida’s House of Representatives. The company, Millennium Marketing, owned by his mother, Daisy Magarino, and godmother, Ileana Medina, is at the center of the criminal investigation. Authorities are trying to determine if Rivera illegally received monies from the company.

Rivera orchestrated a marketing campaign to help the Flagler Dog Track and other pari-mutuel venues in Miami-Dade County win voter approval for Las Vegas-style slot machines. Rivera allegedly convinced Flagler to enter into a contract with Millennium Marketing, a company then-owned by Medina, and formed just weeks before the contract was executed in October 2006.

The contract between Flagler and Millennium required that Rivera render substantial services, as outlined in detail in the agreement.

Rivera repeatedly denied receiving any compensation from the deal, which ultimately yielded $510,000 for Millennium Marketing. Rivera’s state-required financial disclosure forms filed during the period showed no compensation other than the $30,000 received as a member of the state House.

On Dec. 16, Rivera filed new financial disclosure forms with the U.S. House of Representatives showing that he received loans totaling $132,000 from Millennium between 2007 and 2010. The filing of the forms, he says, were made “out of an abundance of caution” and just became public earlier this week.

Prior to the Nov. 1 congressional election, Rivera amended his financial disclosure forms for the previous seven years, to remove the listing of the U.S. Agency for International Development as an employer, after the agency told media that Rivera never worked there.

On Monday, Rivera filed amended disclosure forms again, this time with the Florida Commission on Ethics, showing the Millennium loans for the first time.

Although both federal and state election laws required financial disclosure of loans and liabilities, Rivera claimed that he didn’t feel that he was required to disclosure the loans on his earlier financial disclosure filings.

Rivera claimed that the loans were were exempt from standard disclosure requirements, because they were contingent on him going to work for Millennium after he left the state legislature.  Once he decided to run for Congress, the loans became due, he said.

Rivera claims that the loans were paid in full on Nov. 2, but refused to provide documentation or details of the repayment.

On Wednesday, the Miami Herald reported the latest development in the matter, saying that around the time that Rivera claimed to have paid off the loans with Millennium, he sold his Miami condominium to Millennium. The deed for the sale was recorded on December 22 and did not not indicate whether any money changed hands in the transaction. According to tax rolls, the condo was assessed at $89,000 last year. The documentary transfer tax stamp on the transaction indicated the value of the sale as $100.

The condominium is in the same building where Rivera’s mother and godmother reside.

While all the amended filings may bring Rivera in compliance with election and public office disclosure requirements, questions still remain about the flow of monies that Rivera might have received from Millennium. Rivera has refused to answer direct questions about the transaction.

“He was able to achieve the objective of concealing the loan and where it came from during the election, when it matters most to the voters and the press,” said Craig Holman, with the Washington-based Public Citizen watchdog group. “At least he declared it, but it’s something that should have been declared right away.”

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U.S. Rep.-elect David Rivera discloses $137,000 loan from dog track campaign after previous denials

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David Rivera, set to be sworn in on Jan 5. as the new member of Congress representing Florida’s 25th district, admitted yesterday that he took $137,000 in loans from a company that is co-owned by his mother and godmother, which is currently under investigation by the Miami-Dade Attorney’s Office.

Rep.-elect David Rivera is heading to Congress with controversy following him over unreported loans in potential violation of federal and state election laws.

The new information was included on a disclosure form that he filed on Monday with the U.S. House of Representatives, just before heading to Washington D.C. to begin his first term in Congress.

The Miami-Herald reported in mid-December Rivera’s involvement in a marketing campaign to help the Flagler Dog Track and other pari-mutuel venues in Miami-Dade County win voter approval for slot machines. Rivera allegedly convinced Flagler to enter into a contract with Millennium Marketing, a company then-owned by his godmother Ileana Medina, and formed just weeks before the contract was executed in October 2006.

Although the contract was executed by both Rivera and Medina, and Rivera’s substantial duties were spelled out in the contract, Rivera said he never received any of the $510,000 ultimately paid to the company.

Financial disclosure forms filed with Florida election officials only showed his $30,000 salary he received as a part-time member of the State’s House of Representatives. In the same disclosure forms, Rivera also reported that he worked as a consultant for the U.S. Agency for International Development, but amended the document after the agency confirmed Rivera never worked there.

Tuesday’s story in the Miami-Herald says that Rivera has now admitted to receiving four loans from Millennium between 2007 and 2010, although he claims that they have all been fully repaid. Even though all federal candidates must report all loans in excess of $10,000, except those secured by a home, car or furniture and appliances, Rivera failed to do so, saying the loans were secured by unspecified “personal assets.”

While serving as a state representative, Rivera was also required to disclose all debts in excess of $1,000, except those for taxes or contingent liabilities, such as a potential lawsuit. Rivera is now claiming the $137,000 loan was a contingent liability, subject to whether he took a job at Millennium after his stint with the state legislature, or ran again for office.

Rivera would not provide a copy of the disclosure for to the Miami-Herald, but said he provided a copy to the AP for review.

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Details surface on ex-Florida GOP chairman’s corruption charges

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The former executive director of the Florida Republican Party, Delmar Johnson, was president, secretary and treasurer of a phony company called Victory Strategies that was used to skim hundreds of thousands of dollars in political donations, and funnel them to himself and former state GOP chairman Jim Greer, according to newly-released documents.

The Miami Herald reported Saturday that Victory Strategies collected nearly $240,000 in nine months during 2009, before GOP finance officials began questioning Greer about the company in December 2009. During the same period, the company paid eleven checks to Greer totaling $164,101 and paid Johnson $65,093. At Jan. 31, 2010, the company’s bank account had a balance of about $10,000.

Greer, 47, was arrested in June for running a scam to steal money from the Florida GOP. He was charged with six counts of organized scheme to defraud, four counts of felony grand theft and one count of money laundering.

Greer owned 60 percent of Victory and Johnson owned the other 40 percent of the company. Authorities said that the company had no other business than to take a commission from political contributions to the Florida GOP and pay the amounts to Greer and Johnson.

Donors and major party activists had been critical of Greer after reports surfaced of lavish spending on parties, expensive dinners, luxury hotels and private jets.

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O’Donnell says spending allegations are “thug” tactics

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The Associated Press

Failed U.S. Senate candidate Christine O’Donnell said Thursday that accusations she misspent campaign funds are politically motivated and stoked by disgruntled former campaign workers, defending herself a day after the disclosure of a criminal investigation into her spending.

The Delaware Republican appeared on several network morning shows after it was revealed that federal authorities have launched the probe to determine whether she broke the law by using campaign money to pay personal expenses.

The GOP Senate hopeful from Delaware is under investigation for allegedly living off campaign donations from three failed Senate bids.

“There’s been no impermissible use of campaign funds whatsover,” O’Donnell told ABC’s “Good Morning America.”

O’Donnell, the tea party favorite who scored a surprise primary victory before losing in the general election, suggested the accusations are driven by her political opponents on the right and left, including Vice President Joe Biden.

“You have to look at this whole thug-politic tactic for what it is,” she said Thursday.

She said that she found it suspicious that neither she, her campaign staff nor her lawyer have been informed of a federal investigation.

A person familiar with the investigation told The Associated Press on Wednesday that it had been launched, speaking on condition of anonymity to protect the identity of a client who has been questioned as part of the probe. The case, which has been assigned to two federal prosecutors and two FBI agents in Delaware, has not been brought before a grand jury.

O’Donnell, who set a state record by raising more than $7.3 million in a tea party-fueled campaign this year, has been dogged by questions about her personal and campaign finances.

At least two former campaign workers have alleged that O’Donnell routinely used political contributions to pay personal expenses including her rent as she ran for the Senate three consecutive times, starting in 2006. She acknowledged in a newspaper interview in March that she paid part of her rent with campaign money, arguing that her house doubled as a campaign headquarters.

On Thursday, O’Donnell told NBC’s “Today Show” that she paid the campaign to use the townhouse as her legal residence because her home was vandalized.

O’Donnell said Thursday that people making the spending allegations include a fired former staff member and a former volunteer, both of whom she described as disgruntled. She says many other workers who spent longer with her campaigns have defended her.

The U.S. Attorney’s office in Delaware has confirmed it is reviewing a complaint about O’Donnell’s campaign spending made this year by a nonpartisan watchdog group, Citizens for Responsibility and Ethics in Washington. But officials in the office and the FBI declined to say whether a criminal investigation was under way.

In a statement Wednesday, O’Donnell called the allegations politically motivated and singled out Biden, who represented Delaware in the Senate for decades.

“Given that the king of the Delaware political establishment just so happens to be the vice president of the most liberal presidential administration in U.S. history, it is no surprise that misuse and abuse of the FBI would not be off the table,” she said in the statement.

CREW alleged in a complaint last September that O’Donnell improperly used more than $20,000 in campaign funds to pay her rent and other personal expenses. The group also asked Delaware’s federal prosecutor to investigate.

Federal law prohibits candidates from spending campaign money for personal benefit. FEC rules state that this prohibition applies to the use of campaign money for a candidate’s mortgage or rent “even if part of the residence is being used by the campaign,” although O’Donnell’s campaign maintained that it was told otherwise by someone at the agency.

O’Donnell drew national attention in September when she upset U.S. Rep. Mike Castle for the GOP Senate nomination. She was handily defeated in November by Democrat Chris Coons following a campaign that focused largely on past controversial statements, including that she’d “dabbled into witchcraft” when she was young.

One former O’Donnell staffer, Kristin Murray, recorded an automated phone call for the Delaware Republican Party just before the primary, accusing O’Donnell of “living on campaign donations — using them for rent and personal expenses, while leaving her workers unpaid and piling up thousands in debt.”

O’Donnell told NBC that Murray was fired from her 2008 campaign after less than two weeks because of incompetency.

Another former aide, David Keegan, said he became concerned about O’Donnell’s 2008 campaign finances as she fell behind on bills and had no apparent source of income besides political contributions. He submitted an affidavit to CREW alleging that she used campaign money to cover meals, gas, a bowling outing, and rent to a landlord, Brent Vasher.

Vasher, a nephew of Keegan’s and a one-time boyfriend of O’Donnell, declined comment when asked by The AP if he had been contacted by authorities. Vasher bought O’Donnell’s house in 2008 after she was served with a foreclosure notice, then charged her rent to stay there, according to CREW’s complaint.

In a message sent last week to The AP, Keegan said he had not been questioned as part of a criminal investigation, and that he considers himself only a “catalyst” in a case in which several people must be questioned to scrutinize O’Donnell’s accounting practices and alleged misuse of campaign funds.

After losing two treasurers in 2009, O’Donnell named herself campaign treasurer until this past summer. Another short-term treasurer took over in August and resigned less than two months later, at which point campaign manager Matt Moran added the treasurer’s role to his responsibilities.

Democrat Charles Oberly III, the U.S. attorney for Delaware, and his predecessor, David Weiss, did not immediately return messages Wednesday seeking comment. Oberly was sworn in Tuesday as Weiss’ successor.

O’Donnell, who announced just after Election Day that she had signed a book deal, hasn’t held a full-time job in years and has struggled to explain how she makes a living.

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Feds investigate campaign spending by Christine O’Donnell

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The Associated Press

Federal authorities have opened a criminal investigation of Delaware Republican Christine O’Donnell to determine if the former Senate candidate broke the law by using campaign money to pay personal expenses, according to a person with knowledge of the investigation.

The GOP Senate hopeful from Delaware is under investigation for allegedly living off campaign donations from three failed Senate bids.

The person spoke to The Associated Press on condition of anonymity to protect the identity of a client who has been questioned as part of the probe. The case, which has been assigned to two federal prosecutors and two FBI agents in Delaware, has not been brought before a grand jury.

Matt Moran, O’Donnell’s former campaign manager, did not immediately respond Wednesday to questions from The AP. He said earlier this month that the campaign had not been contacted about any investigation and criticized what he called “lies and false-attack rumors.”

The U.S. Attorney’s office has confirmed it is reviewing a complaint about O’Donnell’s campaign spending filed by a watchdog group, but officials in the office and the FBI declined to say whether a criminal investigation was under way.

O’Donnell, who set a state record by raising more than $7.3 million in a tea party-fueled campaign this year, has long been dogged by questions about her finances.

At least two former campaign workers have alleged that she routinely used political contributions to pay her personal expenses in recent years as she ran for the Senate three consecutive times, starting in 2006. The Washington-based watchdog group Citizens for Responsibility and Ethics (CREW) filed a complaint with the Federal Election Commission making similar allegations and is the group that asked Delaware’s federal prosecutor to investigate.

O’Donnell’s campaign has denied wrongdoing, but acknowledged she had paid part of her rent at times with campaign money, arguing that her house doubled as a campaign headquarters.

Federal law prohibits candidates from spending campaign money for personal benefit. FEC rules say this prohibition applies to the use of campaign money for a candidate’s mortgage or rent “even if part of the residence is being used by the campaign,” although O’Donnell’s campaign maintained that it was told otherwise by someone at the agency.

O’Donnell drew national attention in September when she pulled off one of the primary election season’s biggest upsets by beating moderate Republican Rep. Mike Castle for the GOP Senate nomination. She was handily defeated in November by Democrat Chris Coons following a campaign that focused largely on past controversial statements, including that she’d “dabbled into witchcraft” when she was young.

One former O’Donnell staffer, Kristin Murray, recorded an automated phone call for the Delaware Republican Party just before the primary, accusing O’Donnell of “living on campaign donations — using them for rent and personal expenses, while leaving her workers unpaid and piling up thousands in debt.”

Another former aide, David Keegan, said he became concerned about O’Donnell’s 2008 campaign finances as she fell behind on bills and had no apparent source of income besides political contributions. He submitted an affidavit to CREW alleging that she used campaign money to cover meals, gas, a bowling outing, and rent to a landlord, Brent Vasher.

Vasher, a nephew of Keegan’s and a one-time boyfriend of O’Donnell, declined comment when asked by The AP if he had been contacted by authorities. Vasher bought O’Donnell’s house in 2008 after she was served with a foreclosure notice, then charged her rent to stay there, according to CREW’s complaint.

In a message sent last week to The AP, Keegan said he had not been questioned as part of a criminal investigation, and that he considers himself only a “catalyst” in a case in which several people must be questioned to scrutinize O’Donnell’s accounting practices and alleged misuse of campaign funds.

During her three failed Senate bids, O’Donnell had numerous campaign treasurers, many of who left after serving brief stints. After losing two treasurers in 2009, she named herself treasurer until this past summer. Another short-term treasurer took over in August and resigned less than two months later, at which point Moran added the treasurer’s role to his campaign manager responsibilities.

Democrat Charles Oberly III, the U.S. attorney for Delaware, and his predecessor, David Weiss, did not immediately return messages Wednesday seeking comment. Oberly was sworn in Tuesday as Weiss’ successor.

Kim Reeves, a spokeswoman for the office, reiterated Wednesday that the office was reviewing the CREW complaint. She would not confirm the existence of a criminal probe.

Rich Wolf, a spokesman for the Baltimore office of the FBI, said he could neither confirm nor deny the existence of any investigation.

Murray, the former aide who recorded the automated message, also said she had not been contacted about the investigation.

O’Donnell, who announced just after Election Day that she had signed a book deal, hasn’t held a full-time job in years and has struggled to explain how she makes a living.

She reported in July that she earned only $5,800 in income for the previous 18 months through freelance public relations work. She said she lived mostly on a savings account that she reported in an amended Senate disclosure report as being worth between $1,000 and $15,000.

Her financial past includes a tax lien from the IRS, a lawsuit from the university she attended over unpaid bills and a foreclosure action that she avoided by selling her house to Vasher just before a sheriff’s auction. Her campaign maintained the tax lien was an IRS mistake and she attributed some of her other financial problems to mix-ups.

Her campaign reported spending some $6.1 million in the 2010 campaign. Moran said earlier this month that campaign attorney Cleta Mitchell advised reserving several hundred thousand dollars for legal fees to defend against the campaign spending allegations.

Mitchell could not be reached for comment Wednesday.

The Associated Press

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