A fascinating recent Federal indictment tears the lid off money laundering and bribery funneled through PACs -- the Feds caught a lot of the action on tape including some pretty hilarious profanities. (See below the fold but don't say I didn't warn you.)
Alabama state legislators willing to cast a pro-gambling vote (21 votes were needed) raked in campaign dollars, free help with marketing, even a promise of fundraisers with country music stars -- with the help of lobbyists whose multiple PACs let the lawmakers hide the real source of those goodies.
Pleading guilty, one employee of lobbyist Jarrod Massey "admitted that at Massey's direction, she offered Preuitt $2 million for his vote and that Massey authorized her to offer $100,000 to Means for his vote." But it's the PAC action that makes this story worth reading.
What are PACs for, if not to play hide-the-money? From WBRL News, October 13, 2010:
“If they’d said it was gambling money, I wouldn’t have taken it.” That’s how state Sen. Ted Little explained a $105,777 in-kind contribution he received from a Huntsville-based PAC that has ties to electronic bingo.
And the PACs Geddie used to run with partner Joe Fine (Geddie is off the masthead now) are equal-opportunity givers. More from WRBL:
"Little’s Republican challenger, Tom Whatley, received $20,000 in campaign donations on June 21 from political action committees with ties to lobbyist Robert Geddie Jr., who was among the 11 indicted last week on corruption charges involving lobbyists and legislators."
Whatley of course also claims that the money he got had nothing to do with gambling:
“If you look at the client list of their firm, you’ll see a list of clients who are predominantly business and industrial,” Whatley said. “The money I receive (from those PACs) were from their business and industrial clients. I’ve told them, and anyone, I won’t take gambling money.”
The flow of money to people willing to get it does not care what party you claim to belong to. Both Democrats and Republicans are named in this indictment. In 2007, Fine and Geddie's PACs donated nearly $300,000 to the campaigns of 8 Republican Alabama justices who threw out a $3.6 billion jury award against Exxon Mobil.
The CBS version of the indictment backstory: "The owner of Alabama's largest casino, four state senators and several lobbyists face federal charges of conspiring to buy and sell votes for millions of dollars to get electronic bingo legalized, according to an indictment released Monday."
Those indicted claim that the anti-gambling movement in Alabama is itself deeply corrupted by PAC money. Alabama's Republican Governor Bob Riley has been running a task force on illegal gambling that puts pressure on Alabama rivals of Indian-owned casinos, rivals such as Milton McGregor and Ronald Gilley, now under indictment. In 2002, PACs co-owned by the now indicted Robert Geddie gave $100,000 in Abramoff "Indian gambling money" plus another $525,000 from unnamed sources to elect Alabama's current Governor Riley. McGregor claims that Riley's opposition to gambling stems from a desire to choke off rivals to Alabama's three Indian-owned casinos.
But by 2009, the Abramoff money was far in the past, and Bob Geddie had started working for Milton McGregor as a lobbyist, according to the federal indictment naming both McGregor and Geddie, several legislators, Ronald Gilley and lobbyists working for him, etc. etc.
Condensing the indictment somewhat, McGregor and Gilley made huge donations to PACs controlled by lobbyists working for them. It was the job of the lobbyists to launder those donations into smaller campaign contributions (or other goodies) delivered as if they came from the clients of several different PACs, making it clear to the legislators just what the money was intended to buy: a pro-gambling vote on one piece of legislation. Unfortunately for those named in the indictment, some of those legislators were wearing wires.
PAC-to_PAC shuffling of money enables corruption. Back in 2007 Alabama's TimesDaily reported, "Bob Geddie, of Fine, Geddie and Associates, said he's told clients the lobbying firm will no longer allow shifting money through their 11 PACs to disguise the source of funds. Fine and Geddie virtually invented contract lobbying PACs and the transfer of money through them." By 2009, Geddie had changed his mind about PAC-to-PAC transfer, telling the TimesDaily "It protects individuals from retribution, both givers and recipients." Very true, and exactly the reason that it should be banned.
Here are some interesting parts of the recent Federal indictment (Warning: profanity is included):
Para 6 of the indictment: "
- It was a further part of the conspiracy that MCGREGOR, GILLEY, and lobbyists and other individuals working for them, including GEDDIE, COKER, MASSEY, WALKER, and Lobbyist A, would and did disguise payments made to legislators from whom they sought support by concealing illicit payments through political action committees (“PACs”) and using conduit contributors."
Paras 72 and 73:
- Sometime after on or about February 16, 2010, GEDDIE instructed an employee to record the two checks he delivered to Legislator 3 as attributable to MCGREGOR in a contribution ledger maintained by GEDDIE’s lobbying business. Then, at a later date, GEDDIE told the same employee that the contributions to Legislator 3, in fact, should not be attributed to MCGREGOR. GEDDIE further instructed the employee to alter the contribution ledger to reflect that two other clients were the source of the contributions to Legislator 3, when in fact GEDDIE knew that the contributions were made on behalf of and at the direction of MCGREGOR and that the other two clients had no knowledge of and did not authorize such contributions.
- Between in or about May 2010 and in or about August 2010, in response to grand jury subpoenas, GEDDIE caused to be produced to law enforcement officials the altered contribution ledgers.
Paras 77 and 78
- On or about March 24, 2010, MASSEY told GILLEY that “I need to get your okay on something . . . we’re getting a shakedown going on us up here to some degree . . . with regards to MEANS. . . . He’s asking for $100,000 if he votes for this bill.” In response, GILLEY stated, “Let me, let me call you from another phone, please.”
- One minute later, on or about March 24, 2010, when GILLEY called MASSEY from a different phone, MASSEY stated, “Hey, sorry, I forgot.” Returning to the subject of MEANS’s request for $100,000, GILLEY told MASSEY that “he can one-hundred percent count on our support.” GILLEY continued, “We’re gonna support who supports democracy. And the motherfucker who doesn’t support democracy get ready to get their fucking ass busted.”
Para 104:
- On that same day, on or about March 24, 2010, MASSEY, after discussing whether he should spend $20,000 of GILLEY’s money to pay for a poll for PREUITT, told Lobbyist A: “’Course at this point the way we’re spending money, I don’t, I, I say just go ahead and do it, and if he damn don’t vote for us, we’ll kill his ass, we’ll, we’ll, or we’ll fuck up the results in the poll and put him out to press.”
Para 118:
- On or about March 3, April 20, and September 17, 2009, MCGREGOR caused to be issued from a personal account three checks, each in the amount of $50,000, totaling $150,000, to a PAC controlled by GEDDIE. On or about December 23, 2009, MCGREGOR caused to be issued two corporate checks totaling $37,000 to the same GEDDIE-controlled PAC. On or about December 29, 2009, and March 1, 2010, ROSS received $2,500 campaign contributions from the same GEDDIE-controlled PAC.
Para 121:
- On or about December 30, 2009, MCGREGOR caused to be issued corporate checks totaling nearly $2 million, which were deposited into dozens of PACs. Over the next several months, working closely with COKER, GEDDIE, and others, MCGREGOR doled out this money, as campaign contributions, to legislators, including ROSS, whose votes on the pro-gambling legislation MCGREGOR sought to influence.
From counts 23 through 33 of the indictment: Various defendants "knowingly devised and intended to devise a scheme and artifice to defraud and deprive the State of Alabama, the Legislature, the Legislative Reference Service, and the citizens of Alabama of their right to the honest services of elected members and employees of the Legislature through bribery and concealment of material information."
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Editorial comment: "Concealment of material information" -- isn't that what PACs are in fact created to do? Of course all defendants are innocent until proven guilty, but this indictment casts a bright light into some dark corners.