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Fund-Raiser for Hillary Clinton Gala Probed

Aaron Tonken, who is facing a charge of mail fraud in connection with his charity work, organized a campaign event for her in 2000.

June 18, 2003|Michael Cieply and James Bates | Times Staff Writers

A federal inquiry into the activities of celebrity fund-raiser Aaron Tonken is examining his involvement with a $1-million Hollywood political event for Hillary Rodham Clinton's 2000 Senate campaign, according to people familiar with the investigation.

The inquiry raises the stakes in a longstanding controversy that has pitted Bill and Hillary Clinton against some of their most dogged critics who have publicly questioned the source of underwriting for the gala. For Tonken, it also opens the prospect of cooperation with authorities in return for a possible plea deal.

It couldn't be determined whether Clinton or her campaign is a target, and a spokesman for the New York senator said her office had no information on any probe.

Tonken has not testified before a grand jury, said sources close to the case, who requested anonymity.

In addition, allegations by California's attorney general that Tonken has engaged in fraudulent fund-raising activities could later be used to challenge his credibility. Still, sources say, investigators are interested in the event he organized in August 2000, on the eve of the Democratic National Convention in Los Angeles.

Last week, U.S. Magistrate Judge Paul Game Jr. postponed proceedings against Tonken on one charge of mail fraud in connection with his charity work. At the time, Game sealed a stipulation related to the 90-day delay, citing sensitive matters discussed in the court papers.

Federal authorities have said they are reviewing a range of possible charges against Tonken, stemming from matters outlined in March in a civil suit filed by California Atty. Gen. Bill Lockyer against the fund-raiser. The lawsuit contended that Tonken and others diverted at least $1.5 million from charity events sponsored by celebrities such as writer-producer David E. Kelley and his wife, actress Michelle Pfeiffer.

On Tuesday, Los Angeles County Superior Court Judge Dzintra Janavs granted a preliminary injunction that barred Tonken from soliciting charitable funds or acting on behalf of any nonprofit group in the state until he has accounted for money from past events. Philip Levy, an attorney who represents Tonken in the civil suit, has asked the state court to delay further action while state and federal officials resolve their plans to prosecute Tonken under criminal statutes. A hearing on the issue is scheduled for June 25.

Levy said he wasn't aware of issues Tonken might be discussing with federal prosecutors. George Bird, Tonken's criminal attorney, declined to comment.

A spokesman for the U.S. attorney's office in Los Angeles also declined to comment.

But people familiar with the case said government officials are interested in obtaining information from Tonken about a number of issues, some of which involve his role in producing the star-studded tribute to outgoing President Clinton in 2000.

The high-profile event was designed to celebrate his presidency while contributing to his wife's successful run for her Senate seat.

Controversy erupted around the gala when Peter F. Paul, a Web entrepreneur now awaiting extradition from Brazil to face trial on U.S. securities fraud charges, claimed to have underwritten it with in-kind contributions totaling nearly $2 million.

Paul is represented by Larry Klayman, whose Judicial Watch organization dogged the Clintons repeatedly with lawsuits during Clinton's eight-year presidency.

Paul alleged in a now-dismissed lawsuit that he was defrauded by the Clintons and Democratic campaign officials, from whom he had hoped to receive perks that ranged from a night in the Lincoln bedroom to a pardon of his two-decade-old conviction on cocaine trafficking and other charges. Paul also filed a complaint with the Federal Election Commission, in which he said the Hillary Clinton campaign failed to report the contribution as required under federal law.

Both actions were tossed out because of Paul's fugitive status. In January, an appeals court upheld the dismissal of the lawsuit.

Klayman and Judicial Watch have sharply criticized the Bush Administration for failing to pursue charges against the Clinton campaign in connection with the fund-raiser and other matters.

In an interview, Klayman said he expects Paul to be returned to the U.S. shortly to stand trial on fraud and other charges in New Jersey and Los Angeles.

The charges are related in part to the collapse of Stan Lee Media, a publicly traded Web firm Paul co-founded with "Spider-Man" creator Stan Lee. Two of Paul's associates in December were convicted in federal court of fraud in connection with the company's demise.

Federal officials last year seized Paul's business records, including those related to the August 2000 fund-raiser, which was held by Lee at the Mandeville Canyon home of radio entrepreneur Ken Roberts and featured entertainment from the likes of singer Diana Ross and the band Sugar Ray.

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