-Caveat Lector-
NYTimes
February 7, 2001
Federal Inquiry on Fund-Raising Turns to New Jersey Senator
By TIM GOLDEN and DAVID KOCIENIEWSKI
NEWARK, Feb. 6 — A federal investigation that began by looking
into illegal contributions to Robert G. Torricelli's Senate
campaign in 1996 is now focused in large part on Mr. Torricelli
himself, lawyers and others familiar with the case said.
The wide-ranging inquiry, by the Justice Department's Campaign
Financing Task Force, is examining whether Senator Torricelli,
Democrat of New Jersey, and several former campaign aides played
any role in a series of improper donations or conspired to evade
laws governing the use of campaign and public funds, these people
said.
The prosecutors are also investigating whether Mr. Torricelli or
others close to him acted to impede the inquiry by dissuading a
major political contributor who has become a key witness in the
case from cooperating with the government, lawyers and others
said.
In an interview last week, Mr. Torricelli denied any wrongdoing.
He called the inquiry a "frightening" instance of overzealous law
enforcement and "the worst experience of my life."
"This is the ultimate example," he said, "of attempting to find
something — anything — on somebody of significance."
Lawyers for Mr. Torricelli said they were told by the Justice
Department early last month that he was not then a "target" of
the investigation, the formal term it uses to advise a person who
faces the imminent possibility of criminal indictment.
But three former campaign aides were notified two weeks ago that
they were targets of the inquiry, a move that defense lawyers
criticized as a crude attempt to press the subordinates for
information about their boss. A Justice Department spokeswoman,
Chris Watney, said she would not comment on the inquiry.
An examination of the federal case, based on interviews with
lawyers, grand jury witnesses and others, as well as a review of
internal campaign documents, indicates that what began in 1997 as
a relatively modest look at some questionable contributions to
the $12 million Torricelli campaign has expanded over the last
two years into an exhaustive audit of its fund-raising and
finances.
Since last year, dozens of Mr. Torricelli's fund-raisers, former
aides and other associates have been questioned by federal agents
or called before a federal grand jury in Newark that has been
examining the case. In response to broad government subpoenas,
the campaign has handed over 70,000 pages of documents, lawyers
said, and Mr. Torricelli and his former aides have spent nearly
$600,000 on legal bills, much of it raised from wealthy
supporters.
Yet what may be the most significant evidence against the senator
— and the most problematic for the government — has emerged from
the testimony of a single witness: David Chang, a New Jersey
businessman who raised funds for Mr. Torricelli, chartered a
plane for his travels and pleaded guilty last year to making
$53,700 in illegal donations to his 1996 campaign.
Since agreeing to cooperate with the prosecutors for a lighter
sentence, Mr. Chang, 57, has described a close and opportunistic
political friendship, one in which he lavished contributions and
gifts on Mr. Torricelli in return for his promise to help Mr.
Chang recover $71 million that the North Korean government owed
him for grain shipments he had brokered in the early 1990's.
By Mr. Chang's account, several people familiar with his
debriefings said, Mr. Torricelli was not only aware of some of
his illegal donations but also encouraged them. These included
contributions like the plane charters as well as others he made
directly or funneled through third parties.
Lawyers familiar with the inquiry said the prosecutors were also
pursuing claims by Mr. Chang that Mr. Torricelli and a few of
his allies had discouraged Mr. Chang from cooperating with the
government and had even suggested that he flee the country until
the federal investigation ended.
But in the thick file of their earlier effort to prosecute Mr.
Chang on charges of conspiracy and obstruction of justice,
government lawyers left little of Mr. Chang's reputation intact.
There, the man who dined at the White House and was courted in
Washington as a dynamic international businessman is portrayed as
a phony who falsified documents and pressured associates to lie
on his behalf.
The lead lawyer for Mr. Torricelli's campaign, Robert F.
Bauer, dismissed Mr. Chang's reported statements to
investigators as the "fevered imaginings" of a "pathological
liar," and said he would not dignify them with specific denials.
"Almost anything of consequence that passes through David Chang's
lips is wrong, is false," Mr. Bauer said.
Mr. Chang's lawyer, Bradley D. Simon, demurred.
"Obviously, Senator Torricelli and his subordinates feel that
it's now in their interest to try to discredit David Chang at any
cost," he said. "Over the course of several years, Senator
Torricelli never hesitated to use Mr. Chang for his own purposes.
The facts are what they are and will come out in due time."
Whether the Torricelli case is more about political misconduct or
prosecutorial excess is not easily determined, because much of
the government's work has been presented only in secret, in
closed hearings related to Mr. Chang's prosecution or before the
grand jury in Newark.
As the inquiry has intensified, allies of Mr. Torricelli have
also been quick to cast it as a chilling example of the sort of
unchecked powers sometimes granted to special prosecutors and
independent counsels. And they have pointedly recalled Mr.
Torricelli's sharp words with the head of the campaign finance
task force, Robert J. Conrad Jr., during a Senate oversight
hearing last year, suggesting that bad blood plays a part in the
prosecution as well.
Ms. Watney, the Justice Department spokeswoman, said that the
hearing was hardly acrimonious and that such arguments were
absurd. Other department officials said the Torricelli
investigation had been closely monitored by the Clinton
administration's deputy attorney general, Eric H. Holder, and by
the director of the Federal Bureau of Investigation, Louis J.
Freeh, who is remaining in his post in the Bush administration.
The officials also noted that significant resources have been
afforded to the case: at times, the investigation has involved
more than two dozen federal agents, the officials said, as well
as a team of three prosecutors in New Jersey and others in
Washington.
According to Mr. Torricelli and his lawyers, the sweeping
inquiry has left only three possible violations outstanding: the
campaign's failure to fully reimburse Mr. Chang for seven plane
flights he chartered for the campaign; an unpaid bill of $6,325
for catering at a fund-raiser held in a Fort Lee, N.J., hotel
that Mr. Chang owned; and another debt of $5,000 owed for the
cost of a fund-raising event at the Four Seasons hotel in
Manhattan for which the campaign did pay $15,000.
Campaign officials said those issues were culled from among
dozens that have been raised by the prosecutors in various
proceedings and later resolved. None of the violations were
intentional, they asserted, and none merit more than
administrative action by federal election authorities. The
senator also emphasized that his campaign was never seriously
short of money and had strong safeguards in place to ensure
compliance with election laws.
But lawyers and others familiar with the federal investigation
said the prosecutors were still examining a much broader range of
possible wrongdoing, not all of it related to campaign finances.
They have also continued to scrutinize other donors to the
campaign besides Mr. Chang and the five others who have pleaded
guilty to making illegal contributions.
The issue of what Mr. Torricelli and his aides knew and what
they intended is likely to be crucial.
For example, Mr. Chang chartered 19 airplane flights for the
campaign that under federal law should have been reimbursed in
full. But lawyers for the campaign asserted that Mr.
Torricelli and his aides believed that one of Mr. Chang's
companies owned or leased the planes, entitling them to pay back
a substantially lower amount.
Similarly, Mr. Chang's claims to the prosecutors that Mr.
Torricelli was aware of his improper contributions would carry
little weight in court if they are not corroborated by other
witnesses or evidence.
Mr. Chang has stated that he arranged some of his illegal
contributions, surreptitiously reimbursing employees and
associates for checks they wrote to the Torricelli campaign,
because he thought he had to meet a fund-raising goal set for him
by Mr. Torricelli.
Campaign officials denied any such arrangement. Although they
acknowledged that targets were set for particular fund-raising
events, Mr. Bauer, the campaign lawyer, said that he knew of no
other fund-raising goal assigned to Mr. Chang but that there
would be nothing improper if one was.
According to internal campaign documents obtained by The New York
Times, however, Mr. Chang's name was at the very top of the
campaign's January 1996 list of money expected from fund-raising
events, with a goal of $100,000 — $25,000 more than any other
fund- raiser.
On another 1996 list, Mr. Chang was assigned a separate goal of
$50,000 for "nonevent fund-raising expected by March 31." That
list includes the notation that Mr. Torricelli was to meet with
Mr. Chang on Jan. 5 to discuss the matter. A third campaign
memorandum, from June 1996, again lists Mr. Chang as a top
"nonevent" fund-raiser with a goal of $60,000.
Another focus of the investigation involves Mr. Chang's
assertions that he was discouraged from cooperating with the
government after it became clear in 1999 that he was under
federal scrutiny.
Federal agents have already looked extensively into claims by Mr.
Chang that while being held in December 1999 at the Hudson County
Correctional Center, he was visited by men he had never seen
before, two of whom threatened him to keep quiet about his case.
People familiar with Mr. Chang's statements said he also told
prosecutors that he later received a similar visit at his offices
in Englewood Cliffs, N.J., from one of Mr. Torricelli's friends
and supporters, James D. Demetrakis, a prominent New Jersey real
estate developer. (Mr. Demetrakis did not respond to several
telephone calls to his office asking for comment over the last
five days.)
Mr. Chang further told investigators that Mr. Torricelli, Mr.
Demetrakis and one of Mr. Chang's former defense lawyers,
Michael Critchley, all urged him at different times to consider
leaving the country until after the federal inquiry ran its
course, people familiar with his statements said.
Mr. Critchley, Mr. Chang asserted, told him to consider going
to Japan, the homeland of his wife at the time, Sugae Higa.
Several months after his arrest by the F.B.I. in December 1999,
Mr. Chang said, Mr. Demetrakis assured him that he could surely
beat the charges against him but might have to flee the country
as a last resort. Mr. Chang claimed that Mr. Torricelli told
him around the same time that if he left the country temporarily,
his problem would be solved.
If Mr. Chang's claims could be corroborated, such advice might
be viewed by the prosecutors as trying to obstruct justice. But
it is far from clear that investigators could produce any
witnesses to the conversations he alleged. Mr. Critchley and
lawyers for Mr. Torricelli strongly denied ever saying anything
of the sort, and they noted that Mr. Chang has made a series of
far-fetched statements in the past.
Several such remarks are included in a confidential F.B.I.
report made after Mr. Chang's arrest on Dec. 10, 1999. "Chang
said he spoke to Janet Reno several times last year and she
assured him that the campaign finance case would soon be
dropped," the report states, according to a copy reviewed by a
reporter. Mr. Simon, Mr. Chang's lawyer, would not comment on
whether his client has ever met Ms. Reno, the former attorney
general.
Nonetheless, lawyers familiar with the case said the prosecutors
had repeatedly raised the possibility of a conflict of interest
in the fact that Mr. Critchley, the trial lawyer who represented
Mr. Chang until he agreed to cooperate with the government, has
been a supporter of and fund-raiser for Mr. Torricelli.
Last April, as Mr. Chang prepared to go to trial, the
prosecutors sought publicly to disqualify Mr. Critchley on
procedural grounds. At another closed hearing around the same
time, lawyers said, the prosecutors persuaded a federal judge in
the case to have Mr. Chang note for the record that he was aware
of his lawyer's relationship with Mr. Torricelli and to renounce
his right to claim later that he had been ineffectively
represented.
Mr. Critchley subsequently negotiated a joint-defense agreement
with the Torricelli campaign that called for the two parties to
share information about the case. In the months thereafter, Mr.
Torricelli also spoke repeatedly to Mr. Critchley about Mr.
Chang's legal status, Mr. Bauer acknowledged.
Mr. Critchley dismissed the notion that he had ever discouraged
Mr. Chang from cooperating with the authorities. He said he took
the case with a strong belief that he could win at trial, and
would not have taken it at all if he had perceived any conflict.
In addition to the queries about Mr. Chang, current and former
aides to Mr. Torricelli have been asked a wide range of
questions before the grand jury about Mr. Torricelli's role in
the financial operations of his campaign and whether government
resources available to him were used to pay campaign costs,
people familiar with their testimony said.
Several former staff members, for instance, have been asked by
the prosecutors whether Mr. Torricelli, a member of the House at
the time, improperly used his Congressional car to drive between
campaign events. Others were asked whether he used a government
cellular telephone to make calls for the campaign, given a steep
increase in his bills late in the race.
Lawyers for the campaign described such questions — which they
said had since been put to rest — as evidence of the prosecutors'
apparent inexperience with campaign-financing issues. "He's on
the road at that point, so of course his cell phone bills go up,"
Mr. Bauer said. "He's in the car, and he has to communicate
with his office." He also said the campaign spent thousands of
dollars on a separate set of cellular telephones that Mr.
Torricelli and his aides used.
Investigators have also asked witnesses whether four
Congressional aides were paid from the government payroll when
they were actually working primarily for the campaign. Mr.
Bauer said all of the staff members who worked on campaign
matters did so voluntarily and while fully meeting their
government obligations, but internal campaign documents obtained
by The Times indicate that such split responsibilities were a
significant concern within the campaign.
On Nov. 3, 1995, the campaign's assistant treasurer, Gioia
Lucente, also warned Mr. Torricelli's strategists in a
memorandum to be careful about making campaign finances an issue
in his race against Representative Richard A. Zimmer, a
Republican.
"Before we attack Zimmer's finances," she wrote, "check with me
about both the regulations you believe Zimmer is in violation of,
and our own records in regard to those regulations."
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Kadosh, Kadosh, Kadosh, YHVH, TZEVAOT
FROM THE DESK OF:
*Michael Spitzer* <[EMAIL PROTECTED]>
~~~~~~~~~~~~~~~
The Best Way To Destroy Enemies Is To Change Them To Friends
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