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Prosecutors Say Clinton Aide Hid Funds

Associated Press | May 12, 2005
By PAUL CHAVEZ

LOS ANGELES - A former aide to Sen. Hillary Clinton's campaign panicked when costs for a star-studded Hollywood fundraiser soared past $1 million, then lied to the government to conceal it, prosecutors said.

It was David Rosen's job to raise money for Clinton's 2000 election campaign and to keep track of how much was spent, prosecutor Peter Zeidenberg said in opening statements Wednesday.

But ``you will hear no evidence that Hillary Clinton was involved in any way shape or form,'' Zeidenberg told jurors. ``In fact, it's just the opposite. The evidence will show that David Rosen was trying to keep this evidence from the campaign.''

Clinton, elected to the Senate from New York in 2000, has not been charged in the case against her former finance director, and she was not expected to testify. Rosen's defense attorney, Paul Sandler, was to deliver his opening statements Thursday.

Rosen pleaded not guilty to three counts of making false statements to the Federal Election Commission. If convicted, he faces up to 15 years in prison and a $750,000 fine.

Zeidenberg, of the Justice Department's public integrity division, said Rosen deliberately caused campaign finance reports to be filed with the FEC that claimed there were ``in-kind'' contributions of $400,000 to put on the gala, when he knew that those contributions exceeded $1.1 million.

``How are you going to react when you see that you have OK'd $5,000 for Patti LaBelle's hairdresser, or $10,000 worth of Paul Anka CDs given away on a single night?'' Zeidenberg said. ``David Rosen knew that people would be extremely alarmed and upset at those kinds of expenses.''

The fundraiser, held at a 112-acre estate, attracted such stars as Cher, Diana Ross, John Travolta, Brad Pitt and Jennifer Aniston. The gala was catered by celebrity chef Wolfgang Puck, Zeidenberg said.

Prosecutors told jurors that Clinton faced a wealthy challenger and needed money for advertising at the time. Under federal election rules, her campaign would have benefited by underreporting the event's cost. The more money spent on a gala, even if funded through in-kind contributions, the less money a campaign can spend on the election itself.

Zeidenberg said Rosen also knew the campaign had been told to hold down fundraising costs.

The gala was underwritten by Peter Paul, who pleaded guilty in March to unrelated charges of securities fraud. Paul has told the FBI he gave hundreds of thousands of dollars to Clinton's campaign that were not reported.

The event was co-organized by Aaron Tonken, now serving a 63-month prison sentence for unrelated charges of defrauding charities of hundreds of thousands of dollars.

In documents filed before the trial, Rosen's lawyers said their defense would be that Tonken and Paul concealed information from him about the event's costs. But the prosecutor said Rosen was in charge.

``This event was his responsibility from start to finish,'' said Zeidenberg. ``He was involved in every key decision that was made, everything from the design of the invitations to the selection of the venue, to who was sitting next to whom.''

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