February 2012 trial could create Michele Bachmann's own 'crony capitalism' problem
Frank Vennes Jr. flees the lens of Ripple in Stillwater.
By Karl Bremer
Pre-trial documents filed last week in the federal government’s 24-count indictment against Frank Vennes Jr. on fraud, money-laundering and false-statement charges suggest that Vennes’ motives in pursuing a presidential pardon to wipe his earlier criminal past clean through friends like Michele Bachmann, Norm Coleman and Tim Pawlenty weren’t quite as altruistic as his supporters claimed.
At an arraignment hearing this morning before Magistrate Judge Jeffrey Keyes in U.S. District Court in St. Paul, Vennes pleaded "emphatically not guilty" to all 24 counts in the indictment.
When Vennes began pursuing a pardon in 2000 for his 1987 convictions on federal money laundering and cocaine and gun running charges, he sought help from powerful Washington, D.C. lobbyist John D. Raffaelli. Raffaelli met Vennes several times and was impressed by his story.
“I was touched by him and thought it was certainly worth it to look at it,” Raffaelli told Ripple in Stillwater. 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.”
When Bachmann lent the weight of her congressional office in 2007 to campaign for a presidential pardon for Vennes, her close friend and major campaign donor, she stated that Vennes was “not asking for a pardon that he may achieve personal success. By the grace of God, that has been done.” Rather, she wrote in a passionate letter to the Office of the Pardon Attorney, “Mr. Vennes is seeking a pardon so that he may be further used to help others.”
Bachmann wrote that she knew from “personal experience” how Vennes had used his success to help others. “Despite his success,” Bachmann continued, “Mr. Vennes still encounters the barriers of the past and especially in the area of finance loan documents. This hinders his ability to expand his business which places limits on his support to the neediest in society.”
But a response from U.S. attorneys to motions filed by lawyers for Vennes and co-defendant James Nathan Fry suggests that Vennes was seeking a pardon because it was causing him problems with banks and potential investors in the Ponzi scheme in which he allegedly was involved with Tom Petters.
Vennes collaborated with Fry, CEO of hedge fund investment advisors Arrowhead Capital Management, LLC, to raise money for Petters and Petters’ company, PCI. From 1999-2008, according to the indictment, Arrowhead arranged the investment of more than $500 million of its investors’ funds in PCI, for which Vennes was paid $60 million in commissions by PCI.
Joseph Friedberg and Robert Richman, lawyers for Fry, argued in a memorandum filed with the court September 1 that all allegations pertaining to Vennes’ prior conviction should be stricken from the indictment because “Vennes was not a principal in any of the transactions involving Fry” and “his 1987 criminal conviction is not material to any of the issues in this case.” Vennes was merely an “intermediary” between Fry and Petters’ company, they stated in a memorandum to the court.
Frank Vennes Jr.
"Mr. Vennes' criminal record is no more material than is the criminal record of the Federal Express courier who delivered packages from PCI to Arrowhead," Friedberg and Richman claimed.
They also argued that Fry “had no duty to disclose” Vennes’ criminal past and that allegations that Fry had “affirmatively concealed” this information from investors in the Arrowhead Funds was “irrelevant, prejudicial and inflammatory.”
“All he (Vennes) was, was an agent for Mr. Petters,” Vennes’ lawyer Jim Volling told Magistrate Judge Keyes at a hearing on the motions following the arraignment hearing this morning. The government bringing Vennes’ criminal history into the case, Volling said, is nothing more than an “attempt by the government to prejudice the jury” and tell them “Mr. Vennes is a crook.”
U.S. Attorney’s Office lawyers Timothy Rank and Joseph Dixon challenged those assertions in their response.
To say that Vennes’ past convictions of federal crimes was irrelevant to his current fraud and money laundering charges “defies common sense,” Rank told the judge. Rank noted that one of Vennes’ crimes for which he served time in prison was a “conviction of money laundering.”
“Fry knew very well that Vennes’s criminal history was material to investors—and he learned this very early in their business relationship,” Rank and Dixon wrote. “The government will present evidence at trial that in 2000, the Bank of N. T. Butterfield & Son (“Butterfield”), the Bermuda bank which, for more than a year, had acted as the administrator and custodian bank for Arrowhead’s offshore fund which was invested in PCI Notes, discovered Vennes’s criminal history and terminated its relationship with Arrowhead.”
According to the government’s response, “Fry also had to persuade Arrowhead’s auditor, KPMG, to continue in that capacity after KPMG indicated its concern about continued dealings with Vennes without disclosure of his criminal history. In October of 2000, Fry represented to KPMG that ‘Vennes’ case is before the Executive Committee of the White House for expungement and complete discharge.’”
It's not clear what the "Executive Committee of the White House" was that Fry allegedly referred to. Vennes applied for his presidential pardon through the U.S. Office of the Pardon Attorney in July 2000.
When asked by Magistrate Judge Keyes whether the government knew Vennes’ claim that he was seeking an expungement of his record through the White House was true, Rank replied “I don’t know.”
The U.S. Attorney's response continues: “Vennes’s convictions were not ‘expunged,’ and so Fry represented to KPMG in March 2001 that 'ACF [Arrowhead Capital Finance, Ltd.] now deals direct with Petters and the previous arrangements involving MetroGem and Frank Vennes no longer apply.' This, of course, was false and designed to conceal Vennes’s involvement in the PCI transactions: while Fry had altered the transactions so that funds flowed directly from PCI to Arrowhead, Vennes remained contractually in place controlling the deals and the communications between Arrowhead and PCI.”
Rank told the judge that “Metro Gem is Frank Vennes” and that “Metro Gem acted as the agent that controlled the deal flow between Arrowhead and PCI.” Rank added: "The only way they could get those transactions was to contact Vennes.” At that point, Vennes laughed out loud.
Volling disagreed.
“Mr. Vennes was a conduit for information. He didn’t control the deal flow,” Volling told the court.
Friedberg, Fry's lawyer, explained that originally, Arrowhead sent investors' money to Metro Gem and then Metro Gem sent it to PCI. But after the investment structure was changed between 2001 and 2003, Arrowhead stopped sending funds through Metro Gem. "That left Frank Vennes as a salesman for PCI," Friedberg told the court.
The government’s attorneys stated in their response that they will "present additional evidence that Fry knew that disclosure of Vennes’s role and criminal convictions was material to investors. Indeed, an Arrowhead internal meeting agenda from early 2003, contains, under the heading “Goals,” the following items:
“1. Eliminate any legal/operational process that puts Metro Gem in the trail of money flow (big investors will do background checks on all parties, thus stopping money flow if felony convictions are discovered)
“2. Keep Metro Gem in the mix to obtain fee income on the amount invested
This Arrowhead memo, Rank told the court, shows that Fry was concerned about Vennes' troubled past "well after the structure had changed" and termed the failure to disclose Vennes' criminal past to investors a "classic fraudulent omission."
The U.S. Attorney noted in its response that “the government will adduce evidence at trial that Vennes began searching for other individuals to form hedge funds … because he himself had difficulty bringing in institutional investors due to his criminal history.”
Thus, it appears from the government’s argument that Vennes’ determination to secure a pardon to wipe his record clean was driven by his need to find new investors to steer to Petters' Ponzi scheme—not, as Raffaelli said Vennes told him, so he could bring his ministry into federal prisons. And certainly not, as Bachmann claimed, to help the “neediest in society.”
A jury trial for Vennes and Fry is currently set for Feb. 6, 2012.
The pardon trail of Frank Elroy Vennes Jr. is littered with more than $217,000 in political campaign contributions and letters of recommendation for presidential clemency from the very same politicians and political officers who benefited from Vennes’ thousands. The timing of many of these contributions is in close proximity to activity on his pardon petition, political letters of support or other events, such as Karl Rove’s fundraiser for Bachmann in StillwaterJuly 21, 2006.
Was Vennes trying to buy political support for a presidential pardon through the disbursement of tens of thousands of dollars in campaign contributions to politicians who might be sympathetic to his plight? While there is no conclusive evidence to prove that Vennes was buying influence with politicians who supported his pardon efforts, it’s hard to ignore the fact that he donated so much money to those whose support he sought and received, particularly those like Congresswoman Michele Bachmann (MN-6) for whom he wasn’t even a constituent. At the very least, money appears to have bought the ear of Minnesota politicians for Vennes.
“On the one hand, it’s not unusual for a member of Congress to write letters on behalf of their constituents, and these letters are sometimes helpful to the process,” says a former government official familiar with the pardon process. “On the other hand, it would obviously be problematic if these were made in exchange for campaign contributions, whether express or implied. It is highly unusual for someone to write a letter on behalf of a nonconstituent,” the official noted.
“If a member has personal knowledge regarding a matter or an individual, he or she may always communicate that knowledge to agency officials,” the manual states. “As a general matter, however, a member should not devote official resources to casework for individuals who live outside the district.”
Bachmann—by far the largest recipient of Vennes/Howse campaign contributions with $50,200 total coming from both families—has yet to explain how much she knew about Vennes’ personal finances, as she indicated she did in her 2007 pardon recommendation letter. Nor has Bachmann ever explained why she abandoned her personal friend just weeks before the 2008 election—but 33 months before he was ever even indicted.
While Bachmann wasted no time in trying to wash her hands of Vennes and a portion of his money when the Petters Ponzi came tumbling down, neither Norm Coleman, Tim Pawlenty nor Ron Eibensteiner ever withdrew their recommendations for Vennes’ pardon nor dispensed with his cash. Did Bachmann know something about Vennes’ involvement with Petters back then that the others did not?
THE TEEN CHALLENGE CONNECTION
Minnesota Republicans who once professed their faith in this supposedly rehabilitated, born-again convicted felon—and took tens of thousands of dollars in campaign contributions from him—now are reluctant to talk much about their relationship with him. Former DFL State Sen. Ted Mondale and his father, former Vice President Walter Mondale, who apparently helped get Vennes started in his pardon process, declined interview requests.
Bachmann and Pawlenty—both of whom are running for president—and Coleman have refused repeatedly to respond to inquiries from myself about Frank Vennes Jr. But one common thread connects them—and former President George W. Bush—to the convicted money launderer: the controversial faith-based drug/alcohol rehab ministry Teen Challenge.
Bachmann responded vaguely to WCCO-TV’s Esme Murphy in October 2008 about her relationship with Vennes, which she said began with Minnesota Teen Challenge:
“I knew Frank Vennes through Teen Challenge and saw that he had made a remarkable transformation in his life, and he told me his goal was to give as much money as he could to charity so that more people could find freedom in their life. And I thought that was great, so I supported him.”
Coleman, responding to an inquiry about Frank Vennes Jr. from MinnPost reporter Eric Black last April, also said he knew Vennes through Teen Challenge but added: “I am not privy to, or aware of, what role he may have played in the Petters saga. My advocacy for Frank nearly a decade ago pre-dated anything I am aware of that had to do with Tom Petters.”
Although he has never been clear about his relationship with Vennes, Pawlenty shares a common interest with Vennes in Minnesota Teen Challenge too. Besides steering Minnesota Teen Challenge investments to Petters’ company, Vennes served on the Minnesota Teen Challenge Board of Directors with Mary Pawlenty, Tim Pawlenty’s wife. And in 2009, Pawlenty donated nearly $86,000 from his defunct gubernatorial campaign fund to Minnesota Teen Challenge.
Teen Challenge was a favorite charity of President Bush’s as well. He spoke highly of the organization in the 2006 video below. He went to bat for them in his first term as governor of Texas when a state agency threatened to take away Teen Challenge’s operating license for failing to follow regulations, according to this Frontline report. Bush was keynote speaker at the 2010 Teen Challenge Wisconsin Banquet in Milwaukee.
‘TAKE A SECOND LOOK’
If Vennes was going to be granted his pardon by President Bush before he left office, as Vennes claimed, that means that it was headed for denial until the White House asked the Office of Pardon Attorney to “take a second look” at it.
Was it President Bush himself who asked for that second look when he saw a kindred soul in Vennes’ deep involvement with Teen Challenge? Or was someone else running interference for Vennes at the White House?
And if Vennes was going to be granted a pardon, how did he pass muster with the FBI only five months before they recorded Tom Petters implicating him in the Ponzi scheme? It’s hard to fathom that Vennes wasn’t on the FBI’s radar until those recordings were made.
One government official familiar with the pardon process concurred that the record doesn’t reflect well on the FBI.
“I think it’s quite strange that the FBI didn't give the Pardon Attorney a head’s up, at a time when the FBI had to know that Vennes was the target of an ongoing investigation,” the former official noted. “Instead, the Pardon Attorney had to learn about it from the press, like everyone else. I have no reason to think that it was anything other than the left hand not knowing what the right hand was doing, that the Pardon Attorney asked the background unit to address a narrow issue and the FBI didn't think to check any further.
“But even so, that's hardly an excuse. The FBI's failure to connect the dots nearly resulted in a pardon that would surely have been a great embarrassment to the President, which is one of the reasons that supposedly justifies the Justice Department's advisory function in the first place.”
OPA MEDDLING?
The pardon process of Frank Vennes Jr. points up other long-standing concerns about undue influence on the way the Office of Pardon Attorney operates.
After looking at the documents produced under FOIA, a former federal official familiar with the pardon process said that “it appears that someone with influence must have contacted the White House about the case between the time DOJ sent its denial report in April of 2006 and the time the White House told the Pardon Attorney to 'take another look' at the case (code for 'we want a different recommendation') in July of 2007. But that sort of lobbying happens all the time, and there really isn't anything wrong with it. In fact, I think the White House showed quite a lot of respect for the Justice Department's process by sending the case back for reconsideration.
“What is more interesting is what the documents reveal about the extensive and inefficient meddling with the Pardon Attorney by the Deputy Attorney General's office, which delayed the processing of Vennes' application for years and showed no respect for the official whose job it is to make recommendations to the president. The DAG sent the case back to OPA at least three times between 2002 and 2006, and finally had to direct the Pardon Attorney to change what had been a favorable recommendation to a denial. In 2008, after the White House indicated that it wanted to grant the pardon, the DAG again interfered, this time directing a new Pardon Attorney to make a favorable recommendation.
"Honestly, it is a real shame that the Pardon Attorney can't command more respect in his own agency -- which is precisely what has made the Justice Department so unhelpful to the President in clemency matters over the past 20 years.”
FOLLOW THE MONEY
The role of political money in Vennes’ pardon story also is troubling.
Over the course of a decade, from 1998 to 2008, Vennes, members of his family, his personal lawyer, Craig Howse, and his wife donated a total of $217,800 to Michele Bachmann, Tim Pawlenty, Norm Coleman, Amy Klobuchar, Ted Mondale, the Minnesota House Republican Campaign Committee and the Republican Party of Minnesota. During eight of those 10 years, Vennes was pursuing a presidential pardon through the same politicians and political entities who were benefiting from his largess.
“In part, the failure lies with the Justice Department for failing, as a matter of routine policy, to not look at this issue,” says one former federal official. “They deliberately don’t look at it because they don’t want to know.”
Checking Federal Election Commission records for donations made to politicians by pardon applicants for whom those politicians have written letters of recommendation should simply be a part of the pardon investigation process, the official suggests.
“How can you judge the credibility of one of these letters if they don’t know that important information?”
Some in the academic and legal community who follow presidential pardons closely fear that cases such as Vennes’ could taint the process so that less-politically-connected pardon candidates won’t get a fair shake. Or, that politicians will fear recommending a pardon for anyone, regardless of the merits of their case.
FROM PARDON TRAIL TO FRAUD TRIAL
Frank Elroy Vennes Jr., now of Cocoa Beach, FL, was indicted on April 20, 2011, on four counts of securities fraud and one count of money-laundering. He entered a not-guilty plea on May 3. Two other defendants charged with securities fraud along with Vennes—David William Harrold and Bruce Francis Prevost—already have pleaded guilty and reportedly are cooperating with federal authorities.
Once headed for a pardon by President Bush for his earlier crimes, Frank Vennes Jr. could be headed for prison again instead. It’s a strange twist of fate for a former North Dakota pawnbroker-turned-multimillionaire and felon who once counted among his friends two current candidates for the White House and some of Minnesota’s leading political figures.
Vennes’ fraud and money-laundering trial is scheduled to begin in U.S. District Court in Minneapolis February 6, 2012—right in the middle of presidential primary season. That might focus enough attention on Vennes’ pardon to get some politicians to explain their cozy relationship with him. It might also spur others to address the concerns expressed above about flaws in the pardon process itself.
Stay tuned--things could get very interesting before this is all over.
UPDATE: Vennes indicted July 19 on 24 counts of fraud, money laundering and making false statements.
Additional research and graphic artwork by Ken Avidor.
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.
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.
