Daily Report for Executives provides in-depth coverage of unfolding legislative, regulatory, and judicial news from the nation’s capital, the states, and around the world. This daily news service...
A former staffer for ex-Rep. Steve Stockman (R-Texas) has pleaded guilty for his role in a scheme to steal hundreds of thousands of dollars to pay personal expenses and fund Stockman’s election campaigns, the Justice Department announced ( U.S. v. Dodd, S.D. Tex., 4:17-cr-00116, plea entered 10/11/17).
The guilty plea by Jason Posey, who served on Stockman’s congressional staff and was treasurer of his committee, signaled Posey is likely to cooperate in the prosecution of the former congressman. Stockman is awaiting trial on charges that he launched long-running schemes to divert money using fraudulent charities and defrauding wealthy donors of nearly $1 million.
Posey admitted that, at Stockman’s direction, he and another congressional staffer, Thomas Dodd, illegally funneled $15,000 of charitable proceeds into Stockman’s campaign bank account and caused the campaign to file reports with the Federal Election Commission (FEC) that falsely stated that the money was a contribution from their parents and from the staffers themselves. Dodd had previously pleaded guilty in the case.
Posey also said Stockman directed him to send a letter to a charitable donor that falsely stated that the donor’s $350,000 donation had been used to support a charitable endeavor, when in fact the funds were actually used for other purposes, including Stockman’s campaigns for public office.
In connection with his plea, the DOJ said, Posey admitted that he and Stockman raised $450,000 to support Stockman’s 2014 Senate campaign by falsely representing to a donor that the funds would be used to support a legitimate independent expenditure by an independent advocacy group Posey created. In fact, Posey admitted, Stockman personally directed and supervised the activities of the purportedly independent group, including the printing and mailing of hundreds of thousands of copies of a pro-Stockman publication to Texas voters. Posey also admitted that he submitted a false affidavit to the FEC in order to conceal the scheme, the DOJ said.
Stockman lost the 2014 Republican Senate primary in Texas to Sen. John Cornyn.
Posey pleaded guilty to one count of mail fraud, one count of wire fraud and one count of money laundering before Judge Lee H. Rosenthal of the U.S. District Court for the Southern District of Texas, the DOJ said. He is scheduled to be sentenced on March 29, 2018.
Stockman’s trial is set to begin in January of next year. The former congressman has denied wrongdoing and pleaded not guilty in a court appearance last April.
Court filings have indicated that the former congressman, who held a House seat from 2013-2014 and previously served in the chamber in 1995-1997, has been under investigation by the Justice Department for years. The DOJ collected more than 140,000 pages of documents in the probe that led to Stockman’s indictment earlier this year on corruption charges, according to Stockman’s lawyer Richard Kuniansky.
“Although it’s not clear from the indictment or criminal complaint when the government’s investigation commenced, it appears it may have been conducted over the past 3½ years,” Kuniasky said in a court motion asking for a delay in Stockman’s trial.
Stockman’s alleged schemes date back to 2010 and involved soliciting donors “to fund legitimate voter education activities in specific jurisdictions in advance of the November 2010 federal elections,” according to Dodd’s plea agreement. The plea said the money actually was used for personal expenses, including credit card debt.
The donors involved were not named in the plea, but the Houston Chronicle said money came from the Baltimore-based Rothschild Art Foundation and Rothschild Family Foundation, funded by Stanford Z. Rothschild Jr., and from the Illinois-based Ed Uihlein Family Foundation.
The criminal charges filed by Justice Department prosecutors against Stockman followed and expanded upon charges in a 2014 report by the Office of Congressional Ethics (OCE) and released by the House Ethics Committee. Stockman left Congress at the beginning of 2015 before the Ethics Committee took any disciplinary action against him.
To contact the reporter on this story: Kenneth P. Doyle in Washington at email@example.com
To contact the editor responsible for this story: Paul Hendrie at pHendrie@bna.com
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)