Lawyers Guns & Money, Pt. 2: The Twisted Trail of the Frank Vennes Jr. Presidential Pardon

A Ripple in Stillwater Exclusive Report

By Karl Bremer

Convicted money launderer and gun/cocaine trafficker Frank Elroy Vennes Jr. filed his application for executive clemency—a presidential pardon—with the U.S. Department of Justice Office of Pardon Attorney on July 12, 2000.

On that same day, John D. Raffaelli, one of Capitol Hill’s leading lobbyists with The Washington Group, sent a letter to Bruce R. Lindsey, assistant and deputy counsel to President Bill Clinton, in support of Vennes’ petition for a pardon.

Raffaelli had spent four years as counsel to Sen. Lloyd Bentsen (D-TX). He got to know Vennes through Walter Mondale, who as a U.S. Senator was good friends with Bentsen. Mondale had asked Raffaelli to help Vennes with his pardon petition at the request of his son, former State Senator Ted Mondale, who knew Vennes.

Ted Mondale joined Tom Petters’ Petters Group as an executive vice-president in 1998, so it’s likely he met Vennes through his work there. Mondale’s campaign for governor in 1998 received a $2,000 donation from Vennes—Frank’s first political contribution.

Ted Mondale did not respond to phone and email requests for an interview about Frank Vennes Jr. Walter Mondale’s Minneapolis law office, Dorsey & Whitney, said Mondale was too busy for an interview.

‘A PRETTY GOOD TALKER’
“My involvement with Frank Vennes began and ended in 2000,” recalls Raffaelli. Walter Mondale asked Raffaelli to “help (Vennes) figure out how Washington works” as a favor for Ted. “I met (Vennes) several times in the process. He came to D.C., told me his story, gave me his materials.”

Vennes’ story impressed Raffaelli. “I was touched by him and thought it was certainly worth it to look at it.” Vennes told him he needed a pardon because “at that time, he was doing a prison ministry thing. He couldn’t go into any federal prison because of his conviction.”

After examining the record of his conviction, he says, “It really does look like a pretty strong case of entrapment.”

Raffaelli referred Vennes to Margaret Colgate Love, a private practice attorney who served as U.S. Pardon Attorney under the Clinton Administration from 1990-1997. Love now represents pardon applicants, and she ended up representing Vennes in his pardon petition process.

“I didn’t have any idea how the pardon process works,” says Raffaelli. “I had never been asked to recommend one before … I compared it to trying to get the church to approve an annulment.”

Raffaelli wrote his letter of recommendation for Vennes to the White House on July 12, 2000—the same day the OPA received Vennes’ pardon application.

“There are a number of unusual and questionable governmental actions surrounding the original conviction of Mr. Vennes,” Raffaelli wrote. “But more importantly, since his release from prison, he has been a model citizen and humanitarian. His story is very compelling ... I am confident that President Clinton will find him a worthy applicant for a pardon.”

When he met with Vennes, Raffaelli says, “He seemed like a guy who was pretty proud of what he did in business. I talked to him quite a bit. I probed him quite a lot about what he was doing. I guess he was a pretty good talker.”

When informed of the details of Vennes’ most recent indictment on fraud and money laundering charges, Raffaelli replied sorrowfully: “I’m still just shocked … I’m really sick about Frank.”

President Clinton never acted on Vennes’ pardon petition.

Vennes’ pardon petition was referred to the U.S. Attorney’s Office November 6, 2000, returned to the Office of Pardon Attorney November 27 and then referred to the FBI on March 29, 2001. It already had been referred to Vennes' probation officer and the U.S. Attorney's office in North Dakota where he was prosecuted--standard steps in preliminary investigations of pardon petitions.

Vennes made his next political contribution on October 25, 2001—$1,000 to Minnesota Republican Norm Coleman, who was running in his first campaign for the U.S. Senate. He followed up with another $1,000 to Coleman two days later, and his brother Gregory Vennes gave another $1,000.

Vennes made his first donation of $250 to Tim Pawlenty in December 2001($250), and his and his brother’s family dropped another $8,000 into Pawlenty’s campaign in January 2002. Vennes’ personal lawyer, Craig Howse, gave $550 to Pawlenty in February.

On May 1, 2002, Vennes took the unusual step of making restitution to the federal government on the remainder of the $100,000 he lost in the money-laundering scheme. Restitution had been reduced to $50,000, which Vennes had paid off in 1996.

“Since his release from prison, Mr. Vennes has been very active in the Christian faith and in conveying the teachings of Jesus Christ and the Bible to others,” wrote Leo F.J. Wilking, Vennes lawyer, in an affidavit to U.S. District Court in North Dakota.

“Although Mr. Vennes is under no legal obligation to make any further payment on the Order for restitution,” Wilkings noted, “he has the financial resources to do so and feels he has a moral obligation to make such a payment.”

Copy of a check for $47,822.64 from Frank Vennes Jr. to the U.S. Treasury, which was placed in his pardon petition file.

"The defendant's motion is indeed a pleasant surprise," wrote District of North Dakota U.S. Attorney Drew Wrigley in a May 2, 2002 response to Vennes' payment. "Mr. Vennes had no legaal obligation of any kind to make this offer. His willingness to do so represents genuine rehabilitation."

Vennes cut a check to the U.S. Treasury for $47,822.64. A copy of the affidavit and the check were placed in his pardon petition file.

The Vennes money pipeline continued to flow to Republicans. Vennes gave $10,750 to the Minnesota House Republican Campaign Committee (HRCC) in June 2002, $8,000 to Norm Coleman’s Rally for leadership Fund in July, and $3,000 to the Republican Party of Minnesota in August. Colby Vennes, Frank’s son, chipped in $2,000 to the Pawlenty’s gubernatorial campaign in August.

Vennes’ pardon petition was referred back to the U.S. Attorney’s Office September 4, 2002.

THE KARL ROVE CONNECTION

On December 20, Senator-elect Coleman wrote a letter to “President George W. Bush c/o Karl Rove” on behalf of himself, Governor-elect Tim Pawlenty and Minnesota GOP Chair Ron Eibensteiner supporting Vennes’ petition for a pardon. By then, Vennes and his family and lawyer had contributed more than $35,000 to Coleman, Pawlenty and Republican Party committees.

“Being well-acquainted with Frank and his wife Kim, I want to encourage President Bush to give Frank a pardon,” Coleman wrote. “Frank is a very successful businessman, known for his integrity and fine character. He has shared his success with others by being seriously involved in a number of faith-based outreach organizations and being a more than generous financial contributor to those organizations. His efforts and contributions have had a significant influence for the good of Minnesota. Frank is indeed an example of successful rehabilitation.”

Coleman went on to write that he wanted to join “my friend, (former Minnesota GOP Chairman) Ron Eibensteiner and Governor-Elect Tim Pawlenty in urging President Bush to grant Frank Vennes a Presidential Pardon.”

The roles of Pawlenty and Eibensteiner in seeking a pardon for Vennes are unclear; Freedom of Information Act requests did not turn up pardon letters from either. Pawlenty has refused to respond to repeated requests for explanations of his relationship with Frank Vennes Jr. or his role in Vennes’ pardon request.

This wasn’t the first time that the paths of Pawlenty, Coleman and Rove had crossed. Pawlenty and Coleman each came to their respective races in 2002 as a result of Rove’s and Vice President Dick Cheney’s intervention in 2001. Pawlenty originally had intended to challenge Paul Wellstone for the U.S. Senate, but then on April 18, 2001, according to a Star-Tribune report, Rove called Pawlenty and urged him not to run for Senate. Pawlenty intended to go ahead with his plans, but a second call from the White House—this one from Dick Cheney—changed his mind.

"On behalf of the president and the vice president of the United States, [Cheney] asked that I not go forward. . . . For the good of the party, for the good of the effort (against Wellstone) I agreed not to pursue an exploratory campaign," Pawlenty said at a news conference.

The White House confirmed that Bush, Cheney and Rove had discussed the Minnesota Senate race and that Coleman enjoyed strong support in the White House.

Less than a month later, after Coleman sent his first letter of support for Vennes to Rove, Vennes’ file was referred to the Deputy Attorney General.

Vennes wrote a $10,000 check to the House Republican Campaign Committee in May 2003.

Normally, according to sources familiar with the process, the Deputy Attorney General would sign off the OPA’s recommendation and send it on to the White House. In this case, however, Deputy Attorney General Larry Thompson sat on it for six months and then returned it to the OPA.

Vennes made an end-of-the-year 2003 campaign contribution of $5,000 to Coleman’s Northstar Leadership PAC, and the spigot kept flowing from various members of the Vennes family to Pawlenty and the GOP. Frank Vennes dumped another $10,000 on the HRCC in August 2004.

On December 3, 2004, Coleman wrote a second letter urging approval of a presidential pardon for Vennes, this time to Samuel Morison and Roger Adams in the Office of Pardon Attorney.

“I personally know Mr. Vennes and find him to be trustworthy, extremely dedicated to his community and compassionate about serving others less fortunate than himself, and a talented successful businessman,” Coleman wrote.

Coleman touted Vennes’ numerous business endeavors and his work with faith-based groups and prison ministries. He stated unequivocally that “Mr. Vennes’ moral and ethical standards more than justify your consideration of his pardon application; the pardon will eliminate the continuing stigma of a conviction which limits Mr. Vennes’ ability to reach out and share with others in similar situations as Mr. Vennes’ past. Mr. Vennes’ faith is very real.”

Four weeks later the Vennes file was referred back to the FBI for a second time, where it stayed for only a week before being returned to the OPA January 6, 2005.

On April 11, 2005, Frank, Gregory and Stephanie (Gregory’s wife) Vennes gave $5,000 each to the HRCC.

On April 29, Frank’s file was sent back to the Deputy Attorney General, and Roger Adams in the OPA sent a memo to Deputy Attorney General James B. Comey with an apparent recommendation to approve it.

Then, on June 30, 2005, four members of the Vennes family, including Frank, made their only donations to a Democrat—$2,000 each to U.S. Senate candidate Amy Klobuchar.

Vennes’ file was referred back to the Office of Pardon Attorney from the Deputy Attorney General in December 2005, apparently one more attempt to get the Pardon Office to recommend a denial.

CAMPAIGN CASH FOR BACHMANN
Within the next two weeks, the Vennes family gave $2,250 to Pawlenty, and then Bachmann got on the Vennes gravy train with a whopping $16,800 from Frank, Kimberly (Frank’s wife), Gregory and Stephanie Vennes before the end of the year.

Six members of the Vennes family, along with Vennes lawyer Craig Howse, jump-started Tim Pawlenty’s 2006 gubernatorial campaign with $2,000 each in January. In March, Vennes’ case was referred to the FBI for a third time. That was followed by a flurry of activity in April between the FBI, Pardon Attorney and Deputy Attorney General.

On April 10, 2006, Roger Adams in the Office of Pardon Attorney sent a memo to Deputy Attorney General Paul J. McNulty with what appears to be a recommendation to deny Vennes’ pardon and asking for “your review and signature.”

On April 18, Adams sent a memo to Harriet Miers, counsel to the President, which appears to recommend denying pardons in two separate cases.

“Attached are two letters of advice signed at the direction of the Deputy Attorney General recommending that the President (redacted) pardon in the following cases,” Adams wrote. Because the Pardon Attorney signed them, it appears the recommendation to the White House was to deny both pardons. Vennes was one of them.

On June 1, 2006, a little over a month after his petition was referred to the White House, Frank Vennes gave $50,000 to the Minnesota House Republican Campaign Committee. On June 28, he dropped another $10,000 into the Bachmann Minnesota Victory Committee. Lisa Howse, Craig Howse’s wife, donated a total of $9,200 to Bachmann’s campaign committee and victory PAC that same day. And on July 26, Frank Vennes threw another $10,000 at the Minnesota GOP. In the midst of all these political contributions, Karl Rove appeared at a July 21 fundraiser for Bachmann in Stillwater, Bachmann’s hometown.

White House Deputy Chief of Staff Karl Rove gets the bum's rush from Stillwater after attending a July 21, 2006 fundraiser for Congresswoman Michele Bachmann.

It appears Vennes’ case was referred back to the Pardon Office by the White House in July 2007 and then to the FBI for a fourth time, according to OPA documents. The White House, according to an Oct. 6, 2008 email sent from Ronald Rodgers in the OPA to Kenneth Lee in the White House, had asked the OPA to “take a second look” at Vennes’ pardon petition sometime prior to July 1, 2008.

After receiving a total of $38,000 in campaign contributions from the Vennes family and Frank’s lawyer’s family over the previous 24 months, Bachmann wrote a glowing letter of recommendation for Vennes’ pardon on December 10, 2007. Vennes was not then and never had been a constituent of Bachmann’s. That was the same month that Vennes suspected that Petters was running a fraudulent operation, according to information obtained by federal investigators through secretly recorded conversations in 2008.

“As a U.S. Representative, I am confident of Mr. Vennes’ successful rehabilitation and that a pardon will be good for the neediest of society,” Bachmann wrote to the Office of Pardon Attorney. “Mr. Vennes is seeking a pardon so that he may be further used to help others. As I know from personal experience, Mr. Vennes has used his business position and success to fund hundreds of nonprofit organizations dedicated to helping the neediest in our society.”

Bachmann noted that Vennes needed a pardon because he “still encounters the barriers of his past and especially in the area of finance loan documents.” Bachmann has refused to further explain the nature of her “personal experience” with Vennes or provide clarification of the finance loan documents to which she refers in her letter.

THE HOME STRETCH
According to documents obtained from the Office of Pardon Attorney, on March 7, 2008, Vennes’ pardon petition was returned from the FBI for the fourth and final time.

Three weeks later, Vennes’ lawyer, Craig Howse, donated another $1,000 to Bachmann’s campaign.

Ronald Rodgers, who had taken over as Pardon Attorney after Adams left in December 2007, sent a memo to Deputy Attorney General Mark Filip on June 3 with an apparent recommendation to deny Vennes’ petition.

On June 24, Mark Krickbaum, counsel to the Deputy Attorney General, sent a memo about Vennes’ case to Rodgers that stated "Per the DAG’s instructions (redacted)," an apparent reference to a directive to change the pardon denial to a pardon approval.

Rodgers responded to Krickbaum the next day in a memo that stated: “In response to the DAG’s instructions conveyed via your memorandum of June 24, 2008, the proposed report has been revised to recommend that the President (redacted) executive clemency in the form of a pardon to Frank Elroy Vennes Jr.” The reference to a revision of a “proposed report” appears to be a reference to the OPA’s earlier recommendation to deny Vennes’ pardon.

On June 30, Vennes and his wife sweetened Bachmann’s campaign fund with $9,200 more and Craig and Lisa Howse gave another $2,000 to Bachmann.

July 1, the day after the Vennes’ and Howse’s final donations of $11,200, Rodgers sent a final memo to the Counsel to the President that read: “Attached is a report signed by the Deputy Attorney general (redacted) executive clemency in the form of a pardon for Frank Elroy Vennes Jr.”

Vennes’ pardon petition remained at the White House, apparently awaiting the end-of-term pardon approvals by the president. It was returned to the Office of Pardon Attorney October 24 following the raids on Vennes’ homes in Minnesota and Florida.

Based on secret FBI recordings of conversations of Tom Petters from September 8, 2008, it’s now known that Vennes was expecting his pardon to be granted.

In those recordings, made by Petters associate and cooperating FBI witness Deanna Coleman while she was wearing an FBI wire, Petters discussed Vennes’ fears of going to jail in the Ponzi scheme:

PETTERS: A month ago. He (Vennes) said I think you’re gonna go down. That was when I said what do you mean I’m gonna go down. He goes I just think one of us should be saved. I am going to get a pardon next year and I said,  I said oh, so you should be saved but I shouldn’t. And I said, I said, well, I’ve got news for ya. I don’t think we were both goin’ down and I think I’ve got a plan with Fortress and I have a plan with these guys overseas and that’s when I got them to start believe again.

COLEMAN: Good.

PETTERS: Now I got ‘em believing that we can get him a way out.

Petters couldn’t have been more wrong. Two weeks after that conversation took place, the homes of Tom Petters and Frank Vennes Jr. were raided by federal agents, their assets were seized and the whole Ponzi scheme came tumbling down. Petters was convicted and is now serving 50 years in Leavenworth Federal Prison. Vennes was indicted on charges related to the Petters Ponzi 33 months later on April 20, 2011.

Additional research and artwork by Ken Avidor.

In Part 3 of “Lawyers Guns & Money,” Ripple in Stillwater looks at how the case of Frank Vennes Jr. raises questions about the integrity of the presidential pardon process and how it might be improved.

Read Part 1 of "Lawyers, Guns & Money" here.