HOUSTON (CN) – An associate of former Congressman Steve Stockman pleaded guilty Wednesday to federal charges of bilking charitable foundations of hundreds of thousands of dollars to pay for Stockman’s election campaigns.
Jason T. Posey, 46, faces up to 45 years in federal prison and a fine of more than $4.7 million after pleading guilty to wire fraud, mail fraud and money laundering.
But in the plea agreement, prosecutors agreed to file a motion to reduce Posey’s sentence if he cooperates with them and testifies against Stockman, whose trial is set for Jan. 29, 2018.
A grand jury handed down a 28-count superseding indictment on March 28, charging Stockman and Posey with fraudulently soliciting $1.2 million in charitable donations and diverting more than $500,000 of it to pay their personal expenses and to finance Stockman’s campaigns.
Posey was the special projects director for Stockman’s congressional office from January to November 2013. Stockman, a Republican, represented Texas 9th Congressional District from 1995 to 1997 and its 36th Congressional District from 2013 to 2015. Both are part of Greater Houston.
Stockman was a darling of the National Rifle Association during his time in Congress. He wrote an article for Guns & Ammo magazine in 1995 in which he claimed that President Bill Clinton’s administration had staged the February 1993 raid on the Branch Davidian Christian fundamentalist compound in Waco to justify banning assault weapons.
Posey admitted in his plea agreement that he helped solicit $350,000 from a donor in Chicago to whom Stockman lied that the money would be spent to renovate the “Freedom House,” a townhouse in Washington, D.C. that would be a meeting place and dorm for young Republicans.
Posey and another Stockman aide, Thomas Dodd, illegally funneled $15,000 of that donation into Stockman’s congressional campaign, and falsely reported to the Federal Election Commission that Posey’s father and Dodd’s mother had donated $7,500 each, according to the plea deal.
Dodd pleaded guilty to mail and wire fraud and lying to the Federal Election Commission in March and agreed to testify against Stockman.
Posey told U.S. District Judge Lee Rosenthal at his plea hearing that he was following Stockman’s instructions when he wrote the Chicago donor a letter claiming the $350,000 was used to deliver medical supplies to Third World countries, the Houston Chronicle reported Wednesday.
Stockman, a born-again Christian and former computer salesman, ran unsuccessfully against incumbent John Cornyn in the 2014 Republican primary for Cornyn’s U.S. Senate seat.
Posey says in his plea agreement that to get around federal election laws that limit individual donations to $2,600 per election, he and Stockman came up with a scam to funnel donations through the Center for the American Future, a nonprofit Posey created that supposedly was independent of Stockman’s campaign.
“In reality, as Stockman and (Posey) were well aware at the time, Center for the American Future's activities were never intended to be independent of Stockman or his campaign,” Posey said in his plea agreement.
He said he and Stockman spent more than half of a $450,000 donation to the nonprofit to print and distribute a vote-for-Stockman mailer made to look like a newspaper. They also financed the mailer with leftover funds from the $350,000 donation.
After Stockman lost the primary to Cornyn, the company hired to distribute the mailers refunded $214,000 to the Center for the American Future. Stockman and Posey paid debts from Stockman’s Senate campaign and personal expenses with the money, according to the plea agreement.
Judge Rosenthal let Posey remain free on bond Wednesday. Posey’s attorney told the Houston Chronicle that Posey is going home to Tupelo, Mississippi. He will return to Houston in January or February to testify against his former boss if Stockman’s trial starts as scheduled, on Jan. 29.
Posey’s sentencing hearing is set for March 29, 2018.
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