Lawyers, Guns & Money, Pt. 3: Buying Influence or Access?

Frank Vennes Jr. case highlights flaws in

 the presidential pardon process

A Ripple in Stillwater Exclusive Report

By Karl Bremer

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 Stillwater July 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.

Indeed, the House Ethics Manual addresses that issue specifically.

“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.

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

Read Part 2 of "Lawyers, Guns & Money" here.

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.

Frank Vennes Jr., friend and fat-cat donor of Bachmann and Pawlenty, indicted on fraud and money-laundering charges

Did convicted money launderer and alleged Petters Ponzi pal try to buy a presidential pardon from Minnesota pols?

By Karl Bremer

Convicted money launderer and cocaine/gun runner Frank Vennes Jr., a close personal friend and major campaign contributor of Minnesota presidential candidates Michele Bachmann and Tim Pawlenty, has been indicted on federal fraud and money-laundering charges for his alleged role in the $3.5 billion Tom Petters Ponzi scheme.

Vennes became implicated in the Petters Ponzi in 2008. Millions of dollars worth of his assets have been seized and are being liquidated to pay back some of the victims of the multibillion-dollar scam—the largest in Minnesota history. But until now, Vennes had not been charged with a crime for his involvement in the Ponzi scheme, which sent Petters to the U.S. Penitentiary at Leavenworth Federal Prison for 50 years.

If convicted, Vennes could go to federal prison for the second time in his life on such charges—and also be in need of a second presidential pardon.

Besides each taking tens of thousands of dollars in campaign cash from Vennes and his family, Bachmann and Pawlenty—along with former Minnesota Sen. Norm Coleman and former Minnesota GOP Chair Ron Ebensteiner—unsuccessfully sought a presidential pardon from President George W. Bush for Vennes’ federal crimes from the 1980s. Vennes donated heavily to Bachmann’s congressional campaign, Pawlenty’s gubernatorial campaign, Coleman’s senatorial campaign, the state House Republican Campaign Committee, the Minnesota GOP and other GOP candidates, all during the time the four Republicans heartily endorsed his candidacy for a pardon.

The timing of Vennes’ largesse has led many to speculate that it was part of a “pay-for-pardon” plot.

WHO IS FRANK VENNES JR.?

Frank Elroy Vennes Jr. was convicted in 1987 on federal charges of money laundering, cocaine distribution and illegal firearms sales, to which he pleaded guilty and no contest. The charges stemmed from an undercover operation in which Vennes and his co-defendants received $370,000 from federal agents and deposited the money in bank accounts in Switzerland, the Bahamas and the Isle of Man in a series of transactions. In the last transaction, Vennes personally delivered $100,000 to Switzerland, where his associates allegedly either lost or stole it.

Vennes was sentenced to five years in Sandstone (Minn.) Federal Correctional Facility, where he reportedly found God, and was released in 1990. Following his release from prison, Vennes filed a petition for a pardon.

Vennes also sued the federal government for more than $10 million, claiming that he was entrapped by federal agents even though he pleaded guilty and no contest to the charges, and that his attorney rendered him “ineffective assistance” in representing him. Among his claims, Vennes charged that the undercover agent for whom he had delivered and then lost $100,000 had revealed himself to be a member of the Chicago underworld and threatened to kill Vennes and his family if he didn’t come up with the lost 100 grand. Those threats prompted Vennes to begin illegally selling firearms and cocaine to federal agents, Vennes alleged.

Vennes’ claims ultimately were rejected in 1994 following a series of appeals.

THE PETTERS PONZI

It didn’t take long after his appeals were rejected for Vennes to fall into bad company again. Starting around 1995, according to the grand jury indictment filed April 20 against vennes and two hedge fund managers, Vennes began a business association with Tom Petters, the now-convicted mastermind behind a massive Ponzi scheme that Petters had hatched just two years earlier.

Court documents state that Vennes raised money from investors directly and also induced hedge funds to raise money from investors to purchase short-term, trade finance promissory notes in Petters’ company, PCI. In return, Vennes allegedly earned more than $105 million in commissions from 1995-2008.

The PCI notes were represented to investors as being used to finance the purchase of electronics goods and other consumer goods from suppliers for resale by PCI to big-box retailers.

“In reality,” the indictment states, “the transactions underlying virtually all PCI notes were fictitious. Documents evidencing the purported transactions were fabricated by Petters’ criminal associates, and the purported suppliers of the electronics goods were shell companies acting in concert with Petters. No retailers participated in the transactions underlying the PCI notes and there were no purchases and resales of consumer electronics or other consumer merchandise. Instead, Petters diverted hundreds of millions of dollars to his own purposes and paid purported profits to investors with money raised from the sale of new notes.

“Petters’ inventory finance operation was a Ponzi scheme,” the indictment charges.

Around 2002, according to the indictment, Vennes introduced Petters to David William Harrold and Bruce Francis Prevost, owners and managers of Palm Beach, FL-based and offshore hedge funds, referred to as the “Palm Beach Funds.” Vennes described himself to Harrold and Prevost as “Petters’ financier” and said that he “knew Petters’ business intimately,” according to the indictment.

Vennes recruited the two to raise money for Petters and PCI and, court documents state, from 2002 through September 2008, the Palm Beach Funds invested approximately $8 billion in PCI notes. The arrangement netted Harrold and Prevost more than $58 million in fees under their agreements with the Palm Beach Funds. Vennes earned more than $60 million in commissions paid by Petters and/or PCI for the Palm Beach Fund investments based on a percentage of the money he attracted.

According to the indictment, Vennes had a similar arrangement with another hedge fund from which he obtained more than $45 million in commissions on money he raised for PCI.

The grand jury indictment also named Harrold and Prevost as defendants and alleges that they, along with Vennes, made false representations to Palm Beach Fund investors about the PCI investments and also failed to notify investors about delayed payments and approaching defaults on the PCI notes.

Instead, beginning in February 2008, the three allegedly engaged in a series of “note swaps” in which they would exchange PCI notes that were on the verge of defaulting with other PCI notes that had later maturity dates. Harrold and Prevost, through Vennes, engaged in over 35 of these “note swap” arrangements involving over 250 PCI notes worth about $1 billion, according to the indictment.

“They created the appearance that the PCI notes had not defaulted, and were intended to conceal (from Palm Beach Fund investors) PCI’s inability too pay,” court documents state.

Later, the indictment charges, “Instead of receiving cash payments and then reinvesting that cash in new PCI notes as they had done in the past, Harrold and Prevost, aided and abetted by Vennes, simply exchanged old PCI notes for new ones in a cashless exchange of paper.”

From February 2008, when the “note swaps” began, through September 2008, when the Petters Ponzi came crashing down, Vennes convinced Harrold and Prevost to raise more than $75 million in new investor money, the indictment states.

Vennes, Harrold and Prevost were charged with four counts of securities fraud on April 20. On April 21, Harrold and Prevost pleaded guilty and indicated they were cooperating with prosecutors in their case against Vennes.

Vennes also was charged with one count of money laundering involving a check he wrote to the law firm of Howse & Thompson, P.A. for $98,814.12. The money was derived from securities fraud, according to the indictment. Craig Howse formerly was Vennes’ personal lawyer.

VENNES AND TEEN CHALLENGE

Howse also was chairman of the Fidelis Foundation, a nonprofit organization “organized to assist Christians in discerning, clarifying and implementing God’s call and direction in their life,” according to the group’s tax filings. Fidelis invested over $27 million in the Petters Ponzi, more than $4 million of it from Minnesota Teen Challenge. Fidelis also donated over $1.4 million to Minnesota Teen Challenge.

In earlier lawsuits, Vennes is alleged to have been used by Petters to lure primarily Christian organizations into investing in Petters’ companies through Metro Gem — one of Vennes’ companies — or through the Fidelis Foundation. Among those investors was Minnesota Teen Challenge, which allegedly lost $5.7 million in investments in Petters companies.

“In true Ponzi scheme fashion,” one lawsuit filed by investors against Petters and his associates alleges, “each time one of Plaintiff’s promissory notes expired, Petters secured a new note via Metro Gem and, again via Metro Gem, paid the interest due on the old note, presumably with funds obtained from other investors.”

The investment connection between the Fidelis Foundation, Petters and Teen Challenge is detailed in a federal affidavit authorizing seizure of Petters’ assets. The affidavit states that Petters implicated Vennes in his alleged fraud scheme in recorded phone conversations.

“In these recordings, Petters repeatedly admits executing the fraud scheme by providing fraudulent information to investors,” the affidavit states. “Petters also attributes knowledge of, and participation in, the fraud scheme to (Deanna) Coleman, (Robert) White, Vennes (investor broker), and (Larry) Reynolds (vice president of NIR). Petters states that Vennes told Petters that they are “a little paper manufacturing plant.” On one occasion, Petters states that he and Vennes would be jointly implicated in a scheme to defraud investors out of $130 million.”

In the recordings, the affidavit states, “Vennes cautions that if investors send auditors out to visit warehouses where the merchandise is located, that the scheme would implode. Vennes also asks that Coleman prepare purchase orders to be submitted to investors so that the investors will extend the due date on a debt.”

The affidavit states that evidence shows Vennes was the broker for five investors who are owed approximately $1.2 billion by Petters and his companies, and that as a broker he earned at least $28 million in commissions for delivering investors to Petters and PCI.

Coleman, White, Reynolds and Michael Catain (another Petters associate) all pleaded guilty to charges in the fraud investigation and all fingered Petters as the kingpin in the massive Ponzi scheme.

Minnesota Teen Challenge was forced to lay off 22 employees because of losses from its investments in Petters’ businesses. The organization only obliquely referred to its endangered investments in an oddly worded letter posted on its website:

“About seven years ago, one of our major donors recommended that we consider building a strong reserve fund for Teen Challenge — a nest egg — for use in case of emergency or for program expansion. The donor suggested that we work with the Harvest Fund, and later the Fidelis Foundation, organizations that work with many other Christian ministries, and consider investing some of his large charitable gifts in the Petters Companies, a once strong, respected corporate entity in Minnesota.”

The letter goes on to note that “For seven years this investment bore a healthy return and helped us expand our programming and outreach.” But it made no mention of the precarious situation those investments were in, nor did it name the mysterious “major donor” who recommended the investment in Petters’ company.

PAWLENTY AND VENNES

While Vennes raked in tens of millions from his association with Petters, he continued to press for his pardon. By 2001, he also began donating to political candidates and parties in earnest, including Tim Pawlenty, Michele Bachmann, Norm Coleman, Mark Kennedy, Amy Klobuchar, the Minnesota House Republican Campaign Committee and the Republican Party of Minnesota.

Vennes and his family donated a total of $10,000 to Pawlenty’s gubernatorial campaign in 2002.

In late 2002 just weeks after he was elected, Pawlenty, along with Coleman and former Minnesota GOP State Chair Ron Ebensteiner, sought a presidential pardon for Vennes in a December 20 letter Coleman sent to “President George W. Bush c/o Mr. Karl Rove.”

Coleman wrote that he was “well acquainted with Frank” and went on to describe him as “a very successful businessman, known for his integrity and fine character ... 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 or his role in Vennes’ pardon request.

Vennes, his family, and his personal lawyer continued to donate heavily to Pawlenty. Kimberly Vennes (Frank's wife), Gregory Vennes, Stephanie Vennes (Gregory's wife), and Colby and Denley Vennes, who have shared an address with Frank and Kimberly, each donated $2,000 to the Pawlenty for Governor Committee in 2002. Frank, Kimberly, Gregory, Stephanie, Colby and Denley Vennes each contributed $250 to Pawlenty in 2004 and $2,000 apiece in 2006.

Vennes’ lawyer, Craig Howse, and his wife, Lisa, contributed a total of $5,600 to Pawlenty’s gubernatorial campaigns from 2002-2006.

Howse—partner in the law firm through which Vennes allegedly laundered ill-gotten Petters Ponzi money—continues to be associated with Pawlenty. Shortly before leaving office last year, Pawlenty circumvented the Commission on Judicial Selection and appointed Plymouth lawyer Jamie L. Anderson to the 4th Judicial District Court. Anderson was a lawyer in Howse’s firm and also the wife of Pawlenty’s chief of staff, Paul Anderson.

Pawlenty and Vennes have another common interest: Minnesota Teen Challenge. 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.

BACHMANN AND VENNES

Bachmann’s political relationship with Vennes began in December 2005, when Vennes and his wife, Kimberly, along with his brother and his brother’s wife, Greg and Stephanie Vennes, made their first donations to Bachmann’s congressional campaign–$4,200 apiece. It’s not clear when her personal relationship with Vennes began. However, Bachmann told WCCO’s Esme Murphy in an Oct. 19 interview that she met Vennes through Minnesota Teen Challenge.

“Frank Vennes is an individual here in the Twin Cities who had a remarkable record of rehabilitation in his own life,” Bachmann told Murphy. “He was a person who put a lot of money in the community, Teen Challenge, for instance, which I believe very strongly in. It does a wonderful job taking people who are alcohol- or drug-addicted and trying to get them clean and sober.

“And 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.”

All this time, Frank Vennes Jr. and his family kept supporting Bachmann with campaign cash. Following the Vennes brothers’ and their spouses’ $4,200 contributions to Bachmann in 2005, Frank — who has never lived in Bachmann’s congressional district — dumped another $10,000 into her campaign coffers in 2006. Vennes’ personal lawyer and his wife, Craig and Lisa Howse, donated $9,200 to Bachmann from 2006-08.

In December 2007, Bachmann used the power of her congressional office to write a recommendation for a presidential pardon of Vennes:

“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 U.S. 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.”

In addition, 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.

On June 30, 2008 — six months after Bachmann wrote her pardon recommendation for Vennes — he and his wife gave another $9,200 to Bachmann’s campaign.

Then, on Sept. 24, 2008, federal agents raided Vennes’ $5 million Shorewood home on Lake Minnetonka in connection with the Petters investigation and seized “boxes and buckets of silver and gold coins, trays of jewelry, five stacks of $100 bills, boxes of gem stones, silver plates and Rolex watches,” along with diamond rings and artwork. His $6 million oceanfront home in Jupiter, Fla., was raided also and among the items seized was a briefcase containing “256 $20 gold pieces dated 1904, and eight uncirculated one-half dollar pieces.”

Eight days later, on Oct. 2, Bachmann withdrew her letter of recommendation for Vennes’ pardon.

“I had known Mr. Vennes for some time and was familiar with his good works with local charity organizations,” Bachmann wrote to the Office of Pardon Attorney. “Like so many others, I was under the impression that he had turned his life around and was seeking to do the right thing by those less fortunate. Regrettably, it now appears that I may have too hastily accepted his claims of redemption and I must withdraw my previous letter.”

Bachmann’s motives in withdrawing her recommendation of a pardon for Vennes without ever having been indicted — other than to distance herself from a convicted felon and heavy campaign contributor in an election year — are unclear. She has never responded to my inquiries about her relationship with Vennes, or why she sought a presidential pardon for a convicted money launder who wasn’t even a constituent.

However, she told WCCO’s Murphy that “when the Tom Petters affair came open and Frank may have had a part in that affair, it wasn’t appropriate for me to recommend a pardon anymore. And so my office issued a letter, and we pulled that pardon back, because we don’t know what the answers are right now about his involvement with Tom Petters.”



Just days later, on Oct. 6, the assets and records of Vennes, Petters, Petters’ companies and other Petters associates were frozen by a federal judge. Most of Vennes’ assets are being liquidated to repay some of the victims of his alleged fraud under a court-ordered “work-out plan” just issued in January. According to that plan, two separate groups of creditors would split $29 million and Vennes would be left with only his personal effects, an automobile, one year’s living expenses of $62,400, and some money to cover legal expenses.

However, it wasn’t until April 20, 2011—more than two-and-a-half years later—that Vennes was formally charged with any crime in the case.

On Oct. 3, the day after Bachmann withdrew her pardon recommendation, she tried to symbolically wash her hands of Vennes’ most recent campaign contributions by donating the sum of $9,200—an amount equal to Frank and Kimberly Vennes’ donations to Bachmann earlier that year—to Minnesota Teen Challenge. That didn’t work out so well for the congresswoman either. Minnesota Teen Challenge returned the donation to Bachmann two weeks later.

“We didn’t want to be involved if it was dirty money,” said Rich Scherber, executive director of Minnesota Teen Challenge. Scherber personally suffered a loss of $423,759 in the Petters Ponzi after investing with Vennes, according to court documents.

Scherber says that when Bachmann’s office made the donation, they explained the connection between the campaign’s charitable contribution to them and Vennes’ campaign contributions to Bachmann. Scherber’s staff brought the matter to the organization’s chairman, and he brought it before the board.

“The board had decided they weren’t going to take the check,” Scherber continues. “They sat on it for two weeks and we just returned the check.”

Bachmann ultimately donated the $9,200 to R3, a collaborative of Christian recovery groups that includes Minnesota Teen Challenge.

QUESTIONS REMAIN

Many questions remain unanswered about the apparently close relationship Frank Vennes Jr. once had—and may still have—with three of Minnesota’s most visible Republican politicians. Two of them—Bachmann and Pawlenty—want to be president. And Coleman just landed a job with one of Washington, DC’s top lobbying law firms.

Bachmann, Pawlenty and Coleman have been contacted multiple times in the past to respond to questions about Frank Vennes Jr. All were contacted with written questions for this story as well. Bachmann, Pawlenty, Coleman or their spokespersons have never responded.

Was there a “pay-for-pardon” scheme at work? At this time, there’s no evidence to prove that. Vennes clearly was trying to curry financial favor with the same politicians who would later write pardon recommendations on his behalf.

It’s also not known whether Vennes solicited Bachmann, Pawlenty and Coleman to write pardon endorsements on his behalf or whether they volunteered the services of their office. All have been asked and none have responded.

Then there is the matter of what to do with Vennes’ campaign contributions, which, like his other assets, almost certainly could be linked to illegal Petters Ponzi money. Bachmann only gave away $9,200 of the $27,600 she took from Vennes and his wife. Pawlenty spent his $23,500 in Vennes family contributions on his campaigns and never claimed to give any of it away. The donations to other politicians and party units goes well into six figures.

When Petters was indicted, most politicians couldn’t dump their contributions from him fast enough. Will they do the same for Vennes, whose contributions allegedly came from the same poisoned well, now that he’s been indicted?

George W. Bush left office without ever pardoning Vennes. So the question remains: Would a President Pawlenty or President Bachmann pardon their close personal friend Frank Elroy Vennes Jr.?

So far, neither one of them seems any too anxious to talk about it.

Pawlenty's pardon problems piling up

"Pardon me" may be two words the presidential wannabe wishes he never heard.

By Karl Bremer

A criminal sex offender recommended for a “pardon extraordinary” by Gov. Tim Pawlenty in 2008 was arrested again in November on multiple criminal sexual conduct and incest charges. But this isn’t the first time Pawlenty’s pardon subjects have run afoul of the law after getting his blessing.

In 2002, Pawlenty sought a presidential pardon for convicted money-launderer/cocaine-and-gun runner Frank Vennes, Jr. That same year, Vennes and his family donated a total of $10,000 to his gubernatorial campaign, and thousands more in 2004 and 2006.

But then on Sept. 24, 2008, federal agents raided Vennes’ $5 million Shorewood home on Lake Minnetonka and his $6 million oceanfront home in Jupiter, Fla., in connection with the Tom Petters Ponzi scheme investigation. According to the federal search warrant, Vennes was alleged to have hauled in more than $28 million in commissions for his role in luring five investors to pony up $1.2 billion in Petters’ giant Ponzi scheme.

On Oct. 6, 2008, the assets and records of Vennes, Petters, Petters’ companies and other Petters associates were frozen by a federal judge, and many seized assets of Vennes’ already have been sold off to compensate victims of the fraud, even though Vennes has never been charged with a crime in the case. Vennes recently proposed a plan to liquidate most of the rest of his assets in exchange for immunity from further lawsuits in the Petters case.

Pawlenty has never responded to requests for an explanation of his apparently close relationship with Vennes. But when the national media begins to scrutinize the struggling presidential candidate’s past a little closer, the subject of Pawlenty's pardon for Vennes is sure to come up.

The Pawlenty-Vennes web

Pawlenty's connections to convicted felon Frank Vennes, Jr. are intertwined in several ways.

Last year, Pawlenty donated nearly $86,000 from his defunct gubernatorial campaign fund to Minnesota Teen Challenge (MnTC), a controversial Christian chemical dependency program that was once closely affiliated with Vennes and allegedly lost millions on account of that affiliation in the Petters Ponzi. Additionally, Pawlenty’s wife, Mary, served on Minnesota Teen Challenge’s Board of Directors with Vennes.

Vennes and his family have contributed thousands of dollars to Pawlenty's gubernatorial campaigns. Kimberly Vennes (Frank's wife), Gregory Vennes, Stephanie Vennes (Gregory's wife), and Colby and Denley Vennes, who have shared an address with Frank and Kimberly, each donated $2,000 to the Pawlenty for Governor Committee in 2002. Frank, Kimberly, Gregory, Stephanie, Colby and Denley Vennes each contributed $250 to Pawlenty in 2004 and $2,000 apiece in 2006.

Was it a coincidence that the same year the Vennes money started to flow into Pawlenty's campaign coffers, Pawlenty's name appeared in a request for a presidential pardon for Vennes sent by Senator-elect Norm Coleman?

In a letter dated Dec. 20, 2002, and sent to President George W. Bush c/o Karl Rove, then-Senator-Elect Coleman said he was “well acquainted with Frank (redacted portion) and that I want 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. A Freedom of Information Act request with the Office of Presidential Pardons did not turn up pardon letters from either one, and Pawlenty's office has refused to respond to requests for an explanation as to why he added his name to Coleman’s list of pardon supporters.

The pardon Coleman, Pawlenty and Eibensteiner sought was for Vennes' conviction in 1987 on federal charges of money laundering, cocaine distribution and illegal firearms sale, to which he pleaded guilty and no contest.

Vennes was sentenced to five years in the Sandstone Federal Correctional Facility, where he reportedly “found God” and was released in 1990. Following his release from prison, Vennes filed a petition for a pardon, which has never been granted.

Meanwhile, Vennes was a board member of MnTC as recently as 2008. Pawlenty's wife, Mary, also sat on MnTC's board of directors during at least a portion of the time that Vennes served on the board.

But that organization may have lost millions of dollars as a result of MnTC's investments that Vennes allegedly steered to his associate, Tom Petters, in Petters’ multibillion-dollar Ponzi scheme.

Vennes is alleged to have been a facilitator, or conduit, used by Petters to lure primarily Christian organizations into investing in Petters' companies through Metro Gem - one of Vennes' companies - or through the Fidelis Foundation, which served as a fiscal agent for Minnesota Teen Challenge. Among those investors was Minnesota Teen Challenge, which allegedly lost $5.7 million in investments in Petters companies.

Still, Vennes has not yet been charged with any crimes in connection with the Petters case. Nor has he been named as a defendant in any of the lawsuits filed against Petters and his associates by alleged victims of the fraud.

However, one final question remains: Would a President Tim Pawlenty grant convicted money launderer and alleged Petters Ponzi man Frank Vennes Jr. the pardon he believes he deserves?

Ponzi Politics: Why aren’t political contributions being clawed back to compensate victims of Minnesota’s Ponzimen and fraudsters?

By Karl Bremer

Minnesota is starting to look like the “Land of 10,000 Ponzi Schemes.” Hardly a month goes by before another Ponzi scheme unravels or another fraudster is exposed around here.

As bankruptcy trustees initiate “clawbacks” to try to recover ill-gotten gains from Ponzi profiteers and return them to their victims, one group seems to have escaped their attention: politicians. Many Minnesota politicians have benefited mightily from the largesse of the state’s Ponzimen, yet not one has been asked to give back their political contributions that were derived from illegal activity.

Some pols have donated to charity a portion of their contributions from these Ponzimen and alleged fraudsters. But while that may help cleanse the taint from a politicians’ image, it does little for the victims from which this money was stolen in the first place.

One reason no one is anxious to go after political Ponzi money could be because everyone seems to have some blood, er, grease on their hands. But if these bankruptcy trustees are looking for victims’ money that’s relatively painless to recover, political contributions would appear to be pretty low-hanging fruit.

The public shame of hanging onto it should be enough to get these politicians to return that dirty money to its rightful owners without a lot of legal wrangling. There always seems to be more where that came from anyway.

In the grand scheme of multibillion-dollar fraud cases, a few hundred thousand dollars in political contributions might not seem like much. But it could provide relief for at least a few of the innocent victims of these con artists.

An examination of political contributions by Minnesota’s three most well-known Ponzimen or alleged fraudsters and their wives reveals that Republicans are the favored—but by no means the only—politicians they give to. Convicted Ponziman Tom Petters, Petters associate and convicted felon Frank Vennes, Jr. (who has not yet been charged with a crime in the Petters case) and auto-magnate-gone-wrong Denny Hecker all gave to Republicans and Democrats, although Petters was somewhat more evenhanded. Republican Governor and presidential wannabe Tim Pawlenty, DFL Senator Amy Klobuchar, and former Republican Senator Norm Coleman are the only Minnesota politicians who have received money from all three.

Below are totals over the past decade of the political generosity shown to Minnesota politicians and presidential candidates by Denny and Tamitha Hecker, Tom Petters and Tracy Mixon, and Frank Jr. and Kimberly Vennes. Republican candidates, parties and funds are shown in bold. Draw your own conclusions about why who gave to whom.

In the case of Vennes, it’s clear that the convicted money launderer/cocaine-and-gun runner was after a presidential pardon—and he got letters from Michele Bachmann, Tim Pawlenty, Norm Coleman and state GOP chair Ron Ebensteiner seeking just that.

If churches, schools and employees are being asked to return money stolen from victims of Ponzi schemes and other frauds, isn’t it time that Minnesota politicians be subjected to the same clawback of their dirty money as well?

Photo above: Governor Tim Pawlenty and Ponzi Pal Tom Petters

DIRTY MONEY: PONZI CONTRIBUTIONS TO
MINNESOTA POLITICIANS AND PRESIDENTIAL CANDIDATES FROM 2000-2010

(Republican recipients shown in bold)


DENNY HECKER AND WIFE TAMITHA HECKER

Republican Party of Minnesota $60,465
Norm Coleman: $25,600
McCain-Palin: $24,600
Republican National Committee $15,400
Mark Kennedy $12,400
Lac Qui Parle County DFL $5,500
Minnesota DFL State Central Comm $5,000
James H. Gilbert (Supreme Ct Judge) $5,000
Minnesotans for a Republican Cong $5,000
Amy Klobuchar $2,350
Al Franken $2,300
Barack Obama $2,300
Rudy Giuliani $2,300
John Kerry $2,000
Jeff Johnson (Attorney General) $2,000
Keith Ellison $1,200
John T. Finley (District Ct Judge) $1,000
Erik Paulsen $1,000
George W. Bush $1,000
Tim Pawlenty (Governor) $750
Alan Fine $500


TOM PETTERS AND WIFE TRACY MIXON

Republican National Committee $50,000
MN House Republican Campaign Comm $50,000
Republican Party of Minnesota $50,000
Minnesota DFL State Central Comm $45,000
Norm Coleman $42,300
Republican Party of Minnesota $16,265
Minnesota DFL $21,900
Amy Klobuchar $15,300
Minnesota Democrats $15,000
Patty Wetterling $5,100
Follow the North Star Fund $5,000
Tim Pawlenty (Governor) $3,500
Jim Oberstar $3,800
David Lillehaug (Senate) $3,000
Mark Dayton (Senate) $3,000
John Kerry $2,500
Terri Bonoff $2,300
George W. Bush $2,000
Ted Mondale (Governor) $2,000
Mike Hatch (Governor) $2,000
Minnesota DFL Senate Caucus $2,000
Jim Ramstad $1,750
Betty McCollum $1,500
Minnesota House DFL Caucus $1,500
Bill Luther $1,000
Walter Mondale (Senate) $1,000
Jerry Janezich (Senate) $1,000
Mike Hatch (Attorney General) $1,000
Roger Moe (Governor) $500
Judi Dutcher (Governor) $500
Alan Fine $500
Elwyn Tinklenberg $500
Steve Novak $300
Patricia Anderson (Auditor) $250
Tim Penny (Governor) $200


FRANK VENNES JR. AND WIFE KIMBERLY VENNES

MN House Rep Campaign Comm $85,750
Michele Bachmann $27,600
Mark Kennedy $11,300
Republican Party of Minnesota $10,000
John Kline $8,000
Tim Pawlenty (Governor) $7,500
Norm Coleman $6,000
Minnesotans for a Republican Cong $5,000
Erik Paulsen $4,600
Patrice Bataglia $4,000
Amy Klobuchar $2,000
George W. Bush $2,000
Ted Mondale (Governor) $2,000
Tim Tinglestad (District Cty Judge) $2,000
Republican National Committee $200