Ex-GOP chief denies charges

11/12/2005

BY PATRICK SWEENEY
Pioneer Press
November 12, 2005

Former Minnesota Republican Party Chairman Ron Eibensteiner emphatically denied Thursday that he helped a Florida insurance company make $15,000 in illegal corporate campaign contributions in 2002.

Eibensteiner, who testified for about 75 minutes during the fourth day of his criminal trial in Rochester, Minn., also denied he exerted any control over corporate contributions to a Washington-based campaign committee that would ensure the money would flow back to Minnesota.

Eibensteiner is accused of two gross misdemeanors: aiding and abetting illegal corporate contributions by American Bankers Insurance Co. of Florida, and soliciting and accepting campaign donations from an insurer.

The trial will continue Monday with cross-examination of Eibensteiner by special prosecutor Earl Gray.

Several defense witnesses, including Corey Miltimore, Eibensteiner’s top party aide; Ron Jerich, a Minnesota lobbyist employed by American Bankers; and Tim Commers, the 2002 campaign manager for Gov. Tim Pawlenty, also are scheduled to testify Monday.

A key piece of the prosecution’s evidence against Eibensteiner is a thank-you note he signed for Jerich.

The note, printed on Eibensteiner’s personal stationery and bearing a handwritten salutation, thanked Jerich for obtaining a $10,000 check from American Bankers to the Republican National State Elections Committee, known as RNSEC. The note also referred to the state Republican Party’s effort to raise money to help the campaigns of Pawlenty, Norm Coleman and other Minnesota candidates.

While the thank-you note referred only to the $10,000 contribution, American Bankers sent a second check for $5,000 that also figures in the charges Eibensteiner faces.

Eibensteiner testified that he signed the note but did not know who wrote it for him. He said he would not have signed it if he had realized the American Bankers money went to RNSEC in Washington instead of to the state party.

“Did you read the letter before you signed it?” asked defense attorney Bill Mauzy.

“I did not,” Eibensteiner responded.

“If you had read it, what would you have done?” Mauzy continued.

“I would not have signed it,” Eibensteiner said.

Eibensteiner said he signed hundreds, perhaps thousands, of relatively similar thank-you letters prepared by party employees. He said that the notes were presented to him in batches and that he signed them quickly.

Mauzy led Eibensteiner through a similar dialogue about another major issue in the trial: whether Eibensteiner had an understanding with national Republican Party officials that guaranteed corporate contributions sent to Washington because of Minnesota laws barring such donations would be routed back to the state party.

“I could not, I did not,” Eibensteiner said.

Until federal campaign finance laws were changed after the 2002 election, it was common for businesses, including many big Minnesota firms, to make corporate donations to the two major national political parties. The national parties provided extensive support to state parties, but the national committees were supposed to keep corporate money segregated and not allow it to be spent in states that, like Minnesota, do not allow corporate spending in state campaigns.

On Tuesday, the chief financial officer for the National Republican Committee testified that the committee and RNSEC kept corporate donations in a separate account, and he said there was no corporate money in the $2.6 million that RNSEC sent to the Minnesota party.

Gray, the special prosecutor, several times has argued that he need not prove that any of the specific money donated by American Bankers flowed to Minnesota, only that the $15,000 went to RNSEC and RNSEC then sent money to the state party.

State law bars corporations from donating money either “directly or indirectly” to Minnesota campaigns. But it is not clear whether District Judge Lawrence T. Collins will accept Gray’s arguments when the judge instructs jurors on the law. Another trial judge dismissed the charges against Eibensteiner last year, ruling that prosecutors failed to present any evidence the American Bankers money was spent in Minnesota.

The Minnesota Court of Appeals reinstated the charges but did not rule explicitly on Gray’s issue.

The prosecution’s best evidence that Eibensteiner had an arrangement that allowed the state party access to the American Bankers contributions was testimony Tuesday by Pioneer Press reporter Tim Huber about an article he co-wrote in 2003. The article quoted Eibensteiner saying the state party had assurances that the American Bankers money would be returned to Minnesota.

On Thursday, Mauzy asked Eibensteiner if he said — as Huber’s article quoted him — that he would make sure the national campaign committee would send a check to Minnesota.

“Uh, no,” Eibensteiner said. “I did not. Unequivocally.”

Huber testified Tuesday that Eibensteiner never sought a retraction about the Pioneer Press article.

In support of Eibensteiner’s testimony, Mauzy on Thursday read to jurors a so-called “stipulation” about what Star Tribune reporter Dane Smith would testify, if called as a witness, concerning the interview he conducted with Eibensteiner on March 5, 2003. That was the day Huber’s article was published.

The stipulation quoted parts of two paragraphs from the article Smith wrote. The article quoted Eibensteiner saying of American Bankers that he had “no idea, none, zero, zilch who this company was or what they wanted.”

The Star Tribune article also said state party officials had informed Jerich, the American Bankers lobbyist, that American Bankers could not make a corporate contribution to the Minnesota party but could send its money to the national party.