Rosen Charges Called ‘Politically Motivated’

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The New York Sun

LOS ANGELES – Testifying in the federal trial of a top fund-raiser for Senator Clinton, a Chicago business consultant who said he is a close friend of President Clinton yesterday denounced the charges against the defendant, David Rosen, as “politically motivated.”


Mr. Rosen, 40, is facing three felony counts alleging he underreported costs and in-kind donations in connection with a celebrity gala and concert that took place in Los Angeles on August 12, 2000, just before the Democratic National Convention. The fund-raiser was billed as “A Hollywood Tribute to President Clinton” and was intended to benefit Mrs. Clinton’s Senate campaign.


“I thought, and I still think, that [the charges] were politically motivated and that they were b–s–,” the businessman, James Levin, said under questioning by Mr. Rosen’s lawyers.


Mr. Rosen, a Chicago-based political consultant who served as the national finance director for Mrs. Clinton’s Senate bid, has pleaded not guilty.


During the first day of witness testimony yesterday, the government called Mr. Levin, who had a key role in setting up the 2000 gala. While he indicated he would like to see Mr. Rosen acquitted, Mr. Levin’s testimony supported the government’s claims that Mr. Rosen knew the event was way over budget and that he intentionally omitted costs from reports sent to campaign officials in Washington.


The first campaign finance report filed with the Federal Election Commission put the costs for the event at about $366,000. A later report said the event cost about $400,000. Prosecutors allege the true cost was $1.1 million or more, and that Mr. Rosen misreported the costs to give Mrs. Clinton more to spend on her campaign. However, prosecutors also conceded yesterday that, in this instance, there was no benefit to her campaign.


Mr. Levin testified that in a conversation the night before the concert, which took place at a 112-acre estate in Brentwood, Mr. Rosen said “the costs of this event will never be the costs of this event…meaning that we will never admit how much we spent on this event.”


Mr. Levin said that in the weeks before the concert, Mr. Rosen was well aware of the rapidly escalating costs, including expenses for private jet travel for celebrity entertainers such as Cher. According to Mr. Levin, Mr. Rosen tried to wash his hands of the problem by saying “everything from ‘shut up’ and ‘leave me alone,’ to throwing arms up in disgust to ‘I don’t want to hear it anymore’ and ‘just figure it out.'”


Mr. Levin said President Clinton personally requested his participation on the team planning the gala.


“I flew to Washington and had a direct conversation with the former president,” Mr. Levin said. “He asked me to see if this was all for real.”


Mr. Levin said he was impressed after meeting with Paul, who was then an Internet entrepreneur with a company called Stan Lee Media. “I reported back to the former president that this was very much for real and I recommended doing it,” Mr. Levin said.


Mr. Levin, whose family owned a Chicago company, Tru-Link Fence and Products, said he and Mr. Clinton became fast friends after meeting at a birthday party in 1997. “I consider him a dear friend, and I would hope he considers me a dear friend,” Mr. Levin said.


Mr. Levin’s testimony began yesterday with an admission that could undermine his account and prove embarrassing to President and Mrs. Clinton. In response to questions from the prosecution, he told the jury he agreed earlier this week to plead guilty in a separate federal case involving minority contracting fraud and bribery in the Chicago area. His plea agreement was first reported yesterday in The New York Sun.


Mr. Levin said he is facing the possibility of 5 to 20 years in prison. “I’m hoping that my cooperation is seen favorably…by the U.S. Attorney’s office and ultimately by the judge,” Mr. Levin said.


An attorney for Mr. Rosen, Paul Sandler, opened his cross-examination of Mr. Levin by reminding him that they met just a few months ago at Mr. Rosen’s wedding. Mr. Sandler suggested that on that occasion, Mr. Levin said the charges against Mr. Rosen were false.


“I said they were b-s-,” Mr. Levin replied.


“To me, that means false,” Mr. Sandler said.


“No, I meant that they were b–s-,” Mr. Levin said.


A Justice Department spokesman denied that politics played any role in the prosecution.


When Mr. Sandler asked Mr. Levin whether he was hoping to get a lighter sentence because of his testimony against Mr. Rosen, Mr. Levin replied, “If I do not tell the truth, there is no deal. I’m here to tell the truth.”


Mr. Levin also acknowledged that two decades ago, he briefly owned what he called a “bikini bar.” The disclosure of that fact during the 2000 Senate race caused some headaches for Mrs. Clinton’s campaign.


A lawyer for the Clintons, David Kendall, declined to comment on the courtroom developments.


Much of the testimony yesterday from Mr. Levin and two other witnesses centered on the government’s claim that Mr. Rosen wanted and needed to hold down reported expenses, even though they were being paid for by a wealthy donor, Paul. The alleged motive stems from a campaign finance law that designated some funds as “hard money” and other gifts as “soft money.”


The legal name of the committee that staged the August 2000 gala was New York Senate 2000. Its treasurer, Andrew Grossman, testified that hard money is strongly preferred by campaign because it can be used for ads that mention the candidate or her opponent by name.


Mr. Grossman also said that because of allocation formulas, a large “in-kind” gift, such as the one given by Paul, could have cost Mrs. Clinton campaign money, if properly reported.


“An in-kind contribution can be beneficial. It can also hurt the campaign,” Mr. Grossman said. “If the contribution is too high, it changes the ratio of your hard and soft money.”


Mr. Levin said that was precisely Mr. Rosen’s fear. “If we spent too much there, we were going to wash out the hard money, which would make it an unsuccessful event,” Mr. Levin said.


However, defense attorneys said they had been advised by the government that the Federal Election Commission analyzed the August 2000 gala and determined that, in that instance, even a in-kind gift of $1 million or more would not have forced the campaign to relinquish any hard money.


The government appeared to concede that the alleged errors on the campaign finance reports made no difference to Mrs. Clinton’s campaign coffers. “The government has never argued and will never argue that Hillary Clinton’s campaign benefited from the underreporting,” prosecutor Daniel Schwager said.


The session began yesterday with Mr. Sandler offering his opening statement. “This case, I will prove to you, is not just a travesty, but a bizarre travesty of justice,” he declared. Mr. Sandler accused Paul and the main organizer of the concert, Aaron Tonken, of keeping Mr. Rosen in the dark about the true costs of the event. “He did not know. It was concealed from him,” the defense attorney said.


Mr. Levin also testified that a top aide to Mrs. Clinton, Kelly Craighead, was present at a June 2000 meeting where Tonken discussed paying hotel and air charter bills for a singer, Olivia Newton-John, who performed at a Chicago fund-raiser. Mr. Levin said Mr. Rosen replied, “We didn’t hear that. You didn’t tell me that.”


Ms. Craighead did not return a message seeking comment for this story.


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