DOJ set for decision on Barbour case
Thursday, 7 September 2000 14:27 (ET)
DOJ set for decision on Barbour case
By MICHAEL KIRKLAND
WASHINGTON, Sept. 7 (UPI) -- The Justice Department could decide
by next week whether it will try to revive a criminal case
against the Republican National Committee and former RNC chairman
Haley Barbour on alleged campaign-finance conspiracy, United
Press International has learned.
A federal appeals court ruled in July that a $2 million
Chinese-backed loan in 1994 to a Barbour-founded organization,
which used the money to repay a debt to an RNC subsidiary, was
not a "political contribution." The unanimous ruling by the
three-judge appeals court panel essentially gutted the
government's campaign-finance case.
The department had asked the appeals court for a delay in
deciding whether it wants to pursue the matter.
Now the case has reached the desk of U.S. Solicitor General Seth
Waxman, who must decide whether to ask the full U.S. Court of
Appeals in Washington to rehear the case, ask the Supreme Court
directly for review or kill the investigation by the Justice
Department's Campaign Finance Task Force.
Waxman is scheduled to make his recommendation to Attorney
General Janet Reno next week.
Though Justice Department officials steadfastly refuse to
comment, there appears to be little likelihood that the case will
be pursued in the last weeks before the November elections.
In August, the three-judge panel reversed a U.S. District judge
who had ordered that RNC internal documents on the 1994 loan be
turned over on the orders of a grand jury subpoena in September
1997. A former RNC counsel was resisting the subpoena, contending
that the documents were "privileged" attorney work-product.
The judge examined the documents out of the grand jury's
presence and concluded that they could contain evidence of a
crime. The judge then ordered the attorney to produce the
documents for the grand jury.
In reversing the judge, the appeals panel said the former RNC
counsel could not be compelled to turn over the documents because
there was no political contribution involved in the case, and
therefore no crime had been committed. In plain language, the
panel was saying, "No harm, no foul."
Barbour and two other RNC officials founded the National Policy
Forum in May 1993 as a "think-tank" separate from the RNC. By
September 1994, the NPF had received more than $2.3 million in
loans from the Republican National State Elections Committee. The
latter organization was technically not a federal committee,
though it was under the aegis of the RNC.
"Barbour and other NPF and RNC officials arrived at an agreement
with Ambrous Young, a foreign national" that same September,
according to court records, under which Young Brothers
Development of Hong Kong would provide $2.1 million in collateral
through its U.S. subsidiary to secure a loan of that amount from
Signet Bank to NPF.
Signet disbursed the money to NPF in October 1994, and the
organization used $1.6 million of the proceeds to repay part of
the loan from the GOP state elections committee.
Barbour later told a Senate committee that he had asked Young's
representative to forgive the loan entirely, but ended up
repaying some of it.
After the initial loan activity became known, the Federal
Election Commission's general counsel recommended that the FEC
find the RNC and its officials in violation of the federal ban on
receiving money from foreign nationals.
The commission vote split 3-3, largely along political lines.
However, the loan repayment "also drew the attention of the
Department of Justice," the appeals court said in its August
ruling. The department then began a grand jury investigation into
whether "the repayment transaction amounted to solicitation and
receipt of foreign contributions by the RNC" in violation of
federal law, "and conspiracy by various RNC officials to defraud
the United States for failing to disclose the transaction."
In July, the appeals court panel said "the government has failed
to allege any conduct that is criminal under" the federal
election law when it sought to enforce the grand jury's subpoena
for documents. The department's argument "strikes out on the
failure of its basic claim that a loan repayment is a
contribution," the panel ruled. "On its face this is improbable."
The panel said "unless NPF can somehow be telescoped together
with either (the GOP state committee) or RNC, YBD-Hong Kong's
contribution to NPF is no violation. One possible device would
be a notion that NPF was really part of RNC, but the government
has not seriously voiced such a claim.
Although (the Justice Department) brief contains occasional
language such as the assertion that 'NPF was operated as a de
facto division or subsidiary of the RNC,' nowhere does it
coherently argue that NPF is not legally distinct from RNC, that
the rules applicable to political committees apply to NPF, or
that the relevant 'contribution' was the loan guarantee directly
from YBD-Hong Kong to NPF." --
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Shalom, A Salaam Aleikum, and to all, A Good Day.
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