Saturday, June 9, 2012

Whittemore charged with violating federal campaign finance laws

Source: Reno Gazette Journal
Date:   June 6, 2012
Author: Martha Bellisle

Former Nevada lobbyist Harvey Whittemore charged with violating
federal campaign finance laws; lying to FBI

Former lobbyist and political fundraiser Harvey Whittemore was
indicted Wednesday for allegedly making illegal campaign contributions
to U.S. Senate Majority Leader Harry Reid and lying to federal
officials, including the Federal Election Commission and the FBI. If
convicted, he could face up to five years in prison and a $250,000
fine on each of the four counts. U.S. Magistrate William Cobb signed
an arrest warrant Wednesday commanding 'any authorized law enforcement
officer' to arrest Whittemore 'without unnecessary delay.' One of his
lawyers, John Arrascada, said he could not comment on why federal
prosecutors sought an arrest warrant instead of a summons, which is
often used in white-collar cases involving defendants with no criminal
history. But he said late Wednesday that Whittemore would surrender
today to officials to be arraigned. A trial date will then be set.

Whittemore, 55, was charged by the grand jury with one count of making
excessive contributions, one count of making contributions in the name
of another and two counts of making false statements to a federal
agency, according to the indictment. 'Mr. Whittemore allegedly used
his family members and employees as conduits to make illegal
contributions to the campaign committee of an elected member of
Congress,' Assistant Attorney General Lanny Breuer said. 'Furthermore,
according to today's indictment, he attempted to conceal his crimes by
lying to the FBI.'

Natalie Collins, spokeswoman for the Nevada U.S. Attorney's office,
said in a statement that the member of Congress who received the
tainted money 'unknowingly' filed false reports with the Federal
Election Commission. Although the indictment does not name the member
of Congress, a review of campaign finance records done by the Reno
Gazette-Journal showed that the only one to receive that level of
funding from Whittemore in 2007 was Reid, D-Nev.

In a statement, Reid denied knowing that any crimes were allegedly
committed. 'The Whittemore family gave money to local, state and
federal officials over many years,' said Kristen Orthman, a
spokeswoman for Reid. 'At no time did Senator Reid have any knowledge
that Mr. Whittemore was engaging in these alleged unlawful
contributions to Senator Reid or any elected official. Senator Reid
believes that this is a very serious matter, and he has full
confidence in the American justice system.'

Another one of Whittemore's lawyers, Dominic Gentile, said they will
aggressively fight the charges against his client. 'It is clear to us
and it will be clear to a jury that Mr. Whittemore always acted in a
law-abiding manner, well within his constitutional rights and with
complete transparency,' Gentile wrote in an email. 'We respectfully,
but strongly, disagree with the government's interpretation of both
the facts and law applicable to this case as well as the decision to
indict Mr. Whittemore.'

For decades, Whittemore was considered one of Nevada's key political
fundraisers, thanks to his effective lobbying skills and powerful
clients. Sporting his signature goatee, an easy smile and an endless
supply of energy, Whittemore sweet-talked his way through the Nevada
Legislature representing old-guard casino owners, tobacco companies
and other top-dollar clients. Over the years, he built a reputation as
one of the most influential and successful players in Nevada politics,
land development and business. The indictment also could affect
Whittemore, who also was a longtime lawyer with the powerhouse firm of
Lionel, Sawyer & Collins, in other ways. The Nevada Bar Association
said the indictment could cause him to lose his license to practice
law in Nevada.

Phil Pattee, assistant counsel for the state Bar, said they have
monitored the investigation into Whittemore's activities and if he's
convicted, they will gather the court documents and send them to the
Nevada Supreme Court. The court will then decide whether to send the
case to a disciplinary panel that will decide on suspension or

Nevada's state campaign finance laws also prohibit conduct that is
similar to the federal charges against Whittemore, namely using
conduits to make campaign contributions. A recent Reno Gazette-Journal
investigation found that Whittemore, his companies and employees
-including some of the workers who testified before the federal grand
jury that handed down the indictment Wednesday - made contributions to
certain state and local candidates in recent years.

Spokeswomen from the Nevada Secretary of State's office and the Nevada
Attorney General's office both wrote in emails that they can't
'confirm nor deny whether we have an ongoing criminal investigation.'
The jurors and First Assistant U.S. Attorney Steven Myhre returned the
indictment to the magistrate in U.S. District Court in Reno on
Wednesday afternoon. The charges resulted from an FBI investigation
and secret grand jury hearings that took place over the past four
months. No information was immediately available on whether any of the
people who testified before the grand jury or any elected officials
who received tainted money would also be charged.

The FBI served subpoenas to about 30 Whittemore associates, family
members and former employees on Feb. 9 as part of an investigation
into whether Whittemore used others to funnel campaign contributions
to candidates. They had contributed more than $150,000 to Reid's
campaign on a single day in 2007. Under federal law, it is illegal to
contribute to a federal political campaign using a conduit to hide the
identity of the true contributor. Federal law also sets limits on the
amount that an individual can contribute to a campaign. In 2007, the
maximum individual contribution was $2,300 for a primary election and
$2,300 for a general election; making the maximum for one candidate to
be $4,600.

The prosecutor said Whittemore met with a member of Congress on Feb.
21, 2007, and agreed to try to collect $150,000 in contributions by
March 31, 2007. At the time, Whittemore was owner of the Wingfield
Nevada Group, called 'Company A' in the indictment. 'Aware of the
strict limits on individual federal campaign contributions, Whittemore
allegedly devised a scheme and plan whereby he used family members,
employees of Company A, and their respective spouses, as prohibited
conduits through which to funnel his own money to the federal elected
official's campaign committee under the guise of lawful campaign
contributions,' said Collins, the Nevada U.S. Attorney's office
spokeswoman. 'This scheme allowed Whittemore to make an individual
campaign donation to the federal elected official in excess of the
limits established by federal law. Whittemore allegedly concealed the
scheme from the FEC, the elected official and the elected official's
campaign committee.'

Collins said that Whittemore solicited employees, family members and
their spouses to make the maximum campaign donations to the federal
official. He then reimbursed them with personal checks and wire
transfer, she said. 'In numerous cases, he provided money to the
contributors before the contributions were made,' she said. 'The
indictment alleges that Whittemore attempted to conceal some of the
reimbursements he made to the contributors by telling the employees
that they were bonuses. Whittemore also allegedly paid the
contributors additional money on top of the reimbursements. If a
conduit contributed $4,600, Whittemore reimbursed them $5,000;
likewise if a couple contributed $9,200, he paid the couple $10,000.'
On March 28, 2007, Whittemore had his company transmit $138,000 in
contributions to the congressman's campaign committee, Collins said.
And on April 15, 2007, the campaign committee 'unknowingly filed false
reports with the FEC stating that the conduits had made the
contributions, when, in fact, Whittemore had made them,' Collins said.

After making a name for himself as a lobbyist in the 1990s, Whittemore
teamed up with the founder of the Wingfield Springs community in
Sparks and became part-owner of the Resort at Red Hawk and the
Wingfield company in the early 2000s. They also formed and became
owners of the Coyote Springs development northeast of Las Vegas.
Whittemore formed the Wingfield Nevada Group in 2004 and teamed up
with Bay Area homebuilders Thomas and Albert Seeno Jr. in 2005. The
Wingfield company absorbed Coyote Springs, Red Hawk and a list of
other entities. But that partnership fell apart in January. From 2007
to 2009, Whittemore controlled the books for the Wingfield companies.
But in 2010, the Seenos allegedly found discrepancies that led to
Whittemore's resignation in 2011, according to court documents. The
Seenos filed a lawsuit in Clark County District Court in January
claiming Whittemore embezzled and misappropriated Wingfield funds for
his own personal use. Whittemore responded by filing a lawsuit in U.S.
District Court in Reno accusing the Seenos of racketeering and
claiming they threatened him with bodily harm or death if he didn't
turn over his assets to the company.

(c) 2012 Reno Gazette Journal

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