SAN FRANCISCO (CN) – A panel of the 9th Circuit Court of Appeals upheld the 2013 conviction of disgraced real estate mogul-turned lobbyist F. Harvey Whittemore, finding that he broke campaign-finance laws by writing $5,000 checks to family, staff and acquaintances with the expectation that they would give the money to Sen. Harry Reid’s campaign.
A federal jury convicted Whittemore of making excessive campaign contributions, making contributions in the name of another and making a false statement to the Federal Election Commission.
At issue are $5,000 checks that Whittemore gave as “gifts” and “bonuses” to family members, 29 employees and the employees’ spouses. Nearly everyone who received Whittemore’s good tidings turned around and wrote $4,600 checks to Reid’s 2008 re-election campaign.
Prosecutors said Whittemore resorted to the “straw-donor” scheme after his promises of a $150,000 fundraising effort for Democratic senator from Nevada fizzled. The Senate Majority Leader was unaware of Whittemore’s actions and was not accused of any wrongdoing.
Whittemore challenged the conviction, telling a 9 th Circuit panel this past October that while he may have hoped the money he gave to family and employees would be donated to Reid, he relinquished control of the money when he gave it away. He argued the jury should have been instructed on this theory of unconditional gift-giving.
But in a 19-page opinion issued Monday, the judges found that the trial court rightly refused to instruct the jury that Whittemore’s gifts can’t be considered straw-donor contributions in Nevada.
“The key issue under federal campaign-finance law is the source of the funds, regardless of the status of the funds under state property law at the time of the donation,” Circuit Judge William Fletcher wrote for the panel. “In this case, the jury instructions required the jury to find that Whittemore knew the named contributors were not in fact the ‘true source’ of the money used for the contributions, and that Whittemore caused those contributions to be made. In light of these findings, each of Whittemore’s transfers constitutes a ‘contribution under federal law. The jury’s conclusions that Whittemore made excessive campaign contributions and caused a false report to be made to the Federal Election Commission follow accordingly.”
The panel also rejected Whittemore’s claim that the jury couldn’t fully consider whether he intended to make a straw-donor contribution by handing out the gifts.
“The court instructed the jury that the defendant must have acted ‘knowingly and willfully,’ meaning that ‘the defendant is aware of the act and does not act through
ignorance, mistake, or accident,’ and that ‘the defendant acted with knowledge that some part of his course of conduct was unlawful and with the intent to do something the law forbids,'” Fletcher wrote, citing the trial court’s instructions.
As to Whittemore’s argument that individual campaign donation limits and the prohibition on straw-donor contributions violate his free-speech rights, the panel noted that the Supreme Court ruled nearly 40 years ago that campaign contribution limits were constitutional – and necessary – to curb abuse and corruption.
And despite Whittemore’s contention of insufficient evidence, the judges said prosecutors only had to find six $4,600 conduit contributions to show that the lobbyist had gone over the $25,000 limit proscribed by federal law.
“The government presented evidence that Whittemore had promised to raise $150,000 for Senator Reid’s campaign by March 31, 2007; evidence that the campaign contacted him to check on his progress on March 21 and on March 27; testimony from 13 relatives and employees describing the transfer of funds on March 27 and March 28; copies of checks from Whittemore to the transferees and from the transferees to the campaign written within days of each other; and a new spreadsheet list of campaign donors that obscured the employment relationships between Whittemore’s company and the donors,” Fletcher wrote. “This evidence was more than sufficient to support Whittemore’s conviction.”
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