Harris Got Illegal Donations


The Tampa Tribune

TAMPA - A defense contractor who pleaded guilty Friday to bribing a California congressman told federal authorities he also funneled illegal campaign contributions to U.S. Rep. Katherine Harris of Longboat Key, who's running for the U.S. Senate.

The contractor, Mitchell Wade, former chief executive of MZM Inc. in California, pleaded guilty to paying hundreds of thousands of dollars in bribes to Republican Randy "Duke" Cunningham of California and receiving more than $150 million in Defense Department contracts in return.

He also pleaded guilty to making about $80,000 in illegal campaign contributions to two other Congress members - identifiable from court papers and election records as Harris and Rep. Virgil Goode of Virginia, both Republicans - in hopes of receiving federal appropriations.

The Harris contributions were made to her 2004 campaign for re-election to the House. At the time, MZM, its officers and its political action committee were Harris' largest single source of campaign funds.

Wade also told prosecutors he met with Harris in early 2005 for dinner at an expensive Washington restaurant, where they discussed two possibilities: Wade holding a fundraiser for Harris, who was then considering a run for Senate, and U.S. Navy funding for an MZM center in Harris' district.

The program was never funded, according to the U.S. attorney prosecuting Wade.

It is illegal for Congress members to discuss or accept money in return for performing specific governmental acts.

A Harris spokeswoman confirmed Friday that Harris did have dinner with Wade and discussed both subjects, but denied there was any connection between them.

Harris has acknowledged accepting the MZM contributions but said she did not know they were illegal and never performed any service for MZM in return. She has since donated the contributions to charity.

Wade did not tell Harris and Goode the contributions were illegal, according to the prosecutor.

"Today's announcement is an unfortunate reality," Harris said in a written statement. "I am disappointed by the disrespect shown by a few individuals to the rule of law."

Harris' statement said she and Wade had "discussed opening a defense plant in Sarasota that would create numerous high-skilled, high-wage jobs in my district."

She did not respond to a request for an interview.

Investigation Continues
Under Wade's plea agreement, he faces up to 11 years and three months of incarceration. A sentencing date has not been set.

The prosecutor, U.S. Attorney Kenneth Wainstein of the Washington district, said the investigation continues and that Wade is cooperating.

According to a news release by Wainstein, Wade hoped to curry favor with Harris and Goode because he thought they could request appropriations that would benefit MZM.

Wade, however, "needed a way around the campaign contribution laws," which limit contributions to $2,000 per person, Wainstein said.

"His solution was to have his employees and their spouses make contributions ... under their own names, then reimburse them - a technique known as 'straw contributions' that is a felony under federal election law."

In a news conference announcing Wade's plea, Wainstein added, "Wade personally handed a number of those checks to each representative, followed by the inevitable request that that representative seek appropriations funding that would benefit MZM."

When news reports first surfaced last year suggesting that Wade had coerced employees to make contributions, Harris offered to return the money to any MZM employee who desired it. She got no response, she said.

After Cunningham pleaded guilty in December, Harris promised to give the money away. Two weeks ago, she donated more than $50,000 to Habitat for Humanity - the MZM contributions plus others from Indian tribes linked to indicted lobbyist Jack Abramoff.

Treasurer Recently Replaced
The Wade plea comes 10 days after Harris' campaign hired a new treasurer to replace Nancy Watkins of Tampa's Robert Watkins and Co., one of the state's leading experts on campaign finance accounting.

Neither side would talk about Watkins' departure, but asked whether it had anything to do with the MZM contributions, Watkins said, "Absolutely not."

"Never, ever would a contribution get into one of my client's bank accounts if I knew there was something improper about it," Watkins said.

Harris' Senate campaign spokeswoman Morgan Dobbs said the campaign "just decided to switch accounting firms," but added later, "The campaign did not fire Nancy Watkins."

Harris said in her statement: "This case demonstrates the perils of a process in which candidates are sometimes asked to determine the intent of a contributor. I am fully committed to addressing any weaknesses in the law with regard to the exercise of our government and the spirit of democracy."

Harris ran into trouble with illegal contributions before.

During her 1994 campaign for state Senate, she received $20,293 from Riscorp, a Sarasota insurance company at the heart of one of the state's biggest political fundraising scandals.

In 1998, five of the Sarasota insurance company's top executives, including founder William Griffin, were sentenced for scheming to conceal $380,000 in illegal contributions between 1990 and 1996.

Harris got more than any other politician except Tom Gallagher, then state insurance commissioner and now chief financial officer and a candidate for governor. Gallagher received $109,000.

One Riscorp memo in the court file contended that Harris' former campaign manager asked that the contributions be made under separate addresses so that the checks could not be easily be traced back to the company.

Harris, like Gallagher, denied knowing the contributions were illegal. She eventually donated the proceeds to charity.

Harris also sought to repair the damage by proposing legislation limiting bundles of contributions by corporations and their subsidiaries.

The legislation didn't pass.

Larry Noble of the Center for Responsive Politics, a nonpartisan government watchdog group, said it's legal for a Congress member such as Harris to discuss legislation with a donor, but not legal to link donations to specific government actions.

There is a "fine line between bribery and a contribution," he said. "The line is where there's a quid pro quo."

"There's nothing illegal about him handing over contributions and saying, 'By the way, I have an issue I'd like you think about.' ... But if he's saying we expect you to get us these contracts, you might have a bribe."

Harris is the only widely known Republican seeking the nomination to run against U.S. Sen. Bill Nelson, a Democrat seeking re-election in November.

"I would hope that ethics matters to the voters," said Nelson spokesman Dan McLaughlin. "In this case, the congressman who got the most amount of bribes from MZM is on his way to prison. The congressman who got second-most illegal money wants to be a U.S. senator."