December 30, 2010 in Nation/World

Feds investigating O’Donnell campaign

Candidate accused of misusing funds
Ben Evans Associated Press
 

O’Donnell
(Full-size photo)

BALTIMORE – Federal authorities have launched a criminal investigation to determine whether failed U.S. Senate candidate Christine O’Donnell broke the law by using campaign money to pay personal expenses, according to a person familiar with the investigation.

O’Donnell, the Delaware Republican and tea party favorite who scored a surprise primary victory this year only to lose badly in the November general election, denied the charges and suggested they were being driven by her political opponents on the right and left, including Vice President Joe Biden.

The person spoke to the Associated Press on condition of anonymity to protect the identity of a client who has been questioned as part of the probe. The case, which has been assigned to two federal prosecutors and two FBI agents in Delaware, has not been brought before a grand jury.

O’Donnell, who set a state record by raising more than $7.3 million in a tea party-fueled campaign this year, has been dogged by questions about her personal and campaign finances.

At least two former campaign workers have alleged that O’Donnell routinely used political contributions to pay personal expenses including her rent as she ran for the Senate three consecutive times, starting in 2006. She acknowledged in a newspaper interview in March that she paid part of her rent with campaign money, arguing that her house doubled as a campaign headquarters.

The U.S. Attorney’s office in Delaware has confirmed it is reviewing a complaint about O’Donnell’s campaign spending made this year by a nonpartisan watchdog group, Citizens for Responsibility and Ethics in Washington. But officials in the office and the FBI declined to say whether a criminal investigation was under way.

O’Donnell’s campaign issued a statement Wednesday denying that she misspent campaign money and saying it has heard nothing from authorities.

“If anything does materialize from this rumor, we will continue to fully cooperate as we have made every attempt to ensure we are in compliance with all rules and regulations,” the statement said.

O’Donnell called the allegations politically motivated and singled out Biden, who represented Delaware in the Senate for decades.

“Given that the king of the Delaware political establishment just so happens to be the vice president of the most liberal presidential administration in U.S. history, it is no surprise that misuse and abuse of the FBI would not be off the table,” she said in the statement.

CREW alleged in a complaint last September that O’Donnell improperly used more than $20,000 in campaign funds to pay her rent and other personal expenses.

Federal law prohibits candidates from spending campaign money for personal benefit. FEC rules state that this prohibition applies to the use of campaign money for a candidate’s mortgage or rent “even if part of the residence is being used by the campaign,” although O’Donnell’s campaign maintained that it was told otherwise by someone at the agency.

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