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.

Lawyers, Guns & Money: An Inside Look at the Political Pardon of Frank Vennes Jr.

Documents obtained through the Freedom of Information Act shed light on a controversial presidential pardon involving Michele Bachmann, Tim Pawlenty and Norm Coleman

A Ripple in Stillwater Exclusive Report

By Karl Bremer

U.S. Office of Pardon Attorney (OPA) documents obtained by Ripple in Stillwater suggest that the politically charged presidential pardon of Frank Vennes Jr. went through several unusual permutations of approval and denial as it was volleyed back and forth between the Pardon Office, FBI, Deputy Attorney General and the White House over nearly eight years before it was ultimately recommended for approval in 2008.

And, based on the sequence of events outlined in those documents, it appears something happened at the White House regarding Vennes’ pardon petition sometime between April 2006, when the OPA recommended the White House deny the pardon, and Summer 2007, when the White House returned Vennes’ pardon case to the OPA and asked that they “take a second look at” it.

Frank Elroy Vennes Jr. was convicted in North Dakota of money laundering and illegal firearms and cocaine trafficking charges in 1987, served 38 months in federal prison in Sandstone, MN, and a decade or so after his release, began laying the groundwork for a presidential pardon. Vennes and his family were major campaign contributors to presidential candidates Congresswoman Michele Bachmann and former Minnesota Governor Tim Pawlenty, former U.S. Senator Norm Coleman, and state Republican Party entities.

Vennes and his family also contributed to Sen. Amy Klobuchar and former State Sen. Ted Mondale, who now chairs the Metropolitan Sports Facilities Commission.

Bachmann, Coleman, Pawlenty and then-Minnesota GOP Chair Ron Eibensteiner all recommended Vennes for a presidential pardon during the decade Vennes and his family and personal lawyer showered tens of thousands of dollars on Minnesota politicians.

Vennes and his family were among Bachmann’s biggest campaign contributors. Bachmann wrote a letter of support for Vennes’ pardon in 2007, even though Vennes, a resident of Shorewood, MN, and Jupiter, FL, was not and never had been a constituent. Vennes, his wife, brother and sister-in-law already had donated $26,800 to Bachmann’s 2008 congressional campaign when she wrote the letter; Vennes’ personal lawyer, Craig Howse, and his wife had donated another $11,200 to Bachmann’s campaign; and by June 2008, the Vennes and Howse families would pour another $12,200 into Bachmann’s campaign coffers for a total of $50,200.

Coleman, who received a total of $16,000 from Frank Vennes and his brother, wrote a letter of support for Vennes on behalf of himself, Pawlenty and Eibensteiner in 2002 to "President George W. Bush c/o Mr. Karl Rove." Rove was then senior advisor to President Bush. Coleman sent a second letter of recommendation for Vennes to the OPA in 2004.

Pawlenty received a total of $28,550 from Vennes, his family and lawyer during his Minnesota political career, and he has other connections to the convicted money launderer as well.

SO CLOSE

Former federal officials familiar with the pardon process who examined documents obtained by Ripple in Stillwater through the Freedom of Information Act confirmed that Vennes’ pardon was headed for approval after it went to the White House for the final time July 1, 2008.

But then on Sept. 24, 2008—less than six weeks before the election—the Shorewood, MN, home of Vennes was raided by federal agents in connection with the $3.5 billion Tom Petters Ponzi scheme. Two days later, Vennes’ $6 million Jupiter, FL, home was raided in the Petters investigation.

This was not good news for Bachmann, who was in the midst of a tough re-election fight against DFLer Elwyn Tinklenberg. One of her top campaign contributors and personal friends for whom she had solicited a presidential pardon for earlier crimes of money laundering was now implicated in the largest Ponzi scheme fraud in the history of Minnesota.

News of Vennes’ alleged involvement in the Petters Ponzi broke Sept. 26, 2008. Bachmann’s office began to move quickly to put some distance between Bachmann and her good friend and donor. By October 2, Bachmann had written a letter to the Office of Pardon Attorney withdrawing her earlier letter of support for Vennes’ pardon. Curiously, she made no mention of the reasons why she had had a change of heart.

Coleman, while also engaged in a tight re-election race with Al Franken, never withdrew his letters of support for Vennes.

Wrote Bachmann: “About a year ago, I wrote you to share my thoughts on Mr. Frank Vennes, who was seeking a Presidential pardon. I had known Mr. Vennes for some time and was familiar with his good works with local charity organizations. Like so many others, I was under the impression that he had turned his life around and was seeking to do right 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 … While Mr. Vennes showed public regret, he still clearly needs to reconcile his inner struggles and I am no longer convinced that he would be an appropriate candidate for a Presidential pardon,” Bachmann concluded.

Documents obtained from the OPA indicate that this was the first that office—and the White House—had known of Vennes’ alleged involvement in the Petters Ponzi investigation.

On Oct. 3, Ronald Rodgers in the OPA sent an email to Kenneth K. Lee, associate legal counsel for the White House who handled pardon applications.

“Ken, this is a pardon case that you asked us to take a second look at and we sent it through the wickets anew and then over to you on or about 1 July 2008 (redacted) no action by the President has been taken on the case.

“We just got a call from Congresswoman Michele Bachman’s (sic) office: they wanted to withdraw their letter of support that they submitted on behalf of the guy, though they didn’t specifically disclose the reason for it. It appears he is under investigation for a securities and/or wire fraud matter and they executed a search warrant last week in which he was implicated.”

Rodgers sent Lee a link to a September 26 Star-Tribune report on the Petters raid that named Vennes.

On Oct. 3, 2008, the OPA also sent a two-page fax, the contents of which are unknown, to Bachmann with the subject line “per your request.” However, the fax wasn’t sent to the congresswoman’s office, from which her pardon letters had been sent. It was sent to Bachmann’s campaign office in Minnesota.

That same day, displaying further signs of panic just weeks before the election, Bachmann tried to symbolically wash her hands of the Vennes’ most recent campaign contributions by donating the sum of $9,200—an amount equal to Frank and Kimberly Vennes’ June 30 donations to Bachmann, but only a small portion of Bachmann’s total take from the Vennes and Howse families—to Minnesota Teen Challenge, an organization closely linked with Vennes. 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, which lost millions in the Petters Ponzi scheme after investing with Vennes. Scherber personally suffered a loss of $423,759 in the Petters Ponzi through investments with Vennes, according to court documents, some of which he may recover from Vennes’ seized assets.

(Bachmann ultimately donated the $9,200 to R3, a collaborative of Christian recovery groups that includes Minnesota Teen Challenge, but has kept the remaining $41,000 she got from the Vennes-Howse connection.)

On Oct. 6, Rodgers emailed Lee at the White House with more details on Vennes’ involvement in the unfolding Petters investigation. That afternoon, Lee responded from the White House:

“Ron -- Wow—quite a surprising turn of events. Thanks. Ken”

On October 24, Vennes withdrew his request for executive clemency, the White House returned his case to the Office of Pardon Attorney and the case was “no actioned” and closed.

Bachmann went on to win re-election with the Vennes’ substantial financial support and barely a mention of her close relationship with the convicted money launderer and Ponzi suspect in the local mainstream media. Coleman lost to Al Franken in the closest statewide election in Minnesota history. And Tim Pawlenty now is running for president along with Bachmann.

But now that Bachmann and Pawlenty have entered the presidential arena, they are facing renewed scrutiny of their relationship with Frank Vennes Jr., particularly since things turned for the worse for the convicted money-launderer last spring.

Thirty-three months after his homes were raided and his assets seized by federal agents, Vennes was indicted for his alleged role in the $3.5 billion Tom Petters Ponzi scheme April 20. He pleaded not guilty and was released on $100,000 bond on May 3. His trial on fraud and money laundering charges stemming from the Petters Ponzi is scheduled to begin in February 2012 —right in the thick of presidential primary season.

FRANK VENNES JR.’S RAP SHEET

Frank Vennes Jr.’s legal troubles began in August 1986, according to federal court documents.

“IRS agents investigating suspected money laundering by certain North Dakota car dealers were told that Vennes, a Bismarck pawnshop owner, had made numerous trips to Switzerland and might have experience in transferring funds to a foreign country. An undercover agent, posing as a Chicago investor, contacted Vennes and asked for help in transferring cash abroad. Vennes later admitted that in the next three months he and his codefendants received $370,000 from the undercover agent and transferred it, minus their substantial commissions, to the Bahamas, the Isle of Man, and Switzerland without complying with federal currency transaction laws.”

Vennes was charged in May 1987 with multiple counts of money-laundering charges, and illegal firearms and drug offenses that were allegedly related to the missing $100,000. The first firearms offense alleged that Vennes arranged to illegally transfer an automatic weapon from an acquaintance to a federal agent; the second involved the illegal sale of a firearm to a Mexican national who subsequently took the weapon out of the country.  The cocaine trafficking charge was related to the use of interstate telephone to facilitate the sale of cocaine.

Vennes pleaded guilty to one count of money laundering  and no contest to the firearms and cocaine charges. The remainder of the money-laundering charges were dismissed. He was sentenced to five years in prison—three years for money laundering and one year each for the firearms and drug convictions—and restitution of $100,000, which later was reduced to $50,000.

Vennes served 38 months in the Federal Correctional Facility in Sandstone, MN, was released in Dec. 12, 1990, on parole, and completed his sentence Sept. 25, 1992.

Following his release from prison, Vennes did not appeal his sentence or conviction. But he commenced a “Bivens action” against the federal government seeking $10 million in damages from “unnamed federal agents for entrapment, outrageous conduct, and willful violation of the tax laws.”

According to a judicial opinion from the 8^th Circuit Court of Appeals, Vennes testified that at the prompting of undercover agents posing as Chicago businessmen in North Dakota, “he made two trips to Switzerland to launder money provided by the agents. Vennes successfully laundered $100,000 on the first trip, but on the second trip, associates of Vennes made off with the other $100,000.

“When Vennes returned without the money,” the opinion states, “the Chicago businessmen revealed themselves to be members of the Mafia and threatened … to dismember his children if he failed to recoup this money (perhaps suspecting that their superiors would be none too pleased at the loss of $100,000 of government money). These newly-revealed mobsters then suggested that Vennes engage in illegal drug and firearms transactions in an effort to recoup the money and thereby avoid serious bodily harm to him and his family. Vennes did so, the efforts to recoup the money were unsuccessful, and Vennes was eventually charged with a panoply of crimes.”

Vennes told the court that “I did get involved with some drug deals, but I lost money on those too, or got ripped off, so that there was never any money to repay the agent.”

The District Court acknowledged that “the underlying factual situation … is wondrously bizarre. Especially fascinating is speculating about the scene which occurred when the undercover agents tried to explain the loss of $100,000.”

However, Vennes failed to convince the court that he was entrapped, most notably since he pleaded either guilty or no contest to the charges. In dismissing Vennes’ claims, North Dakota U.S. District Judge Patrick Conmy wrote that “The record reveals that at one point, Vennes purchased cocaine from his own source in Florida after haggling with an undercover agent supplier about price and speed of delivery. This is not the conduct of one coerced or entrapped into crime.”

Additionally, at sentencing, according to the appeals court record, “Vennes’s attorney stated that the presentence report was complete, fair and thoroughly professional. He further stated that he was not ‘in any way indicating that these government agents acted in an improper fashion.’”

Vennes argued that he pleaded guilty and no contest on the advice of his attorney, whom he accused of “ineffective assistance.”

Vennes appealed the District Court’s decision to the 8^th Circuit Court of Appeals and lost, and he was denied appeal to the U.S. Supreme Court.

PARDON ME

Vennes claimed to have found God in prison, and played that card on many occasions. When he was released in December 1990, he moved to Minneapolis, started Metro Gem, and built a successful business dealing in precious stones and rare coins. Along the way, he became involved in prison ministries.

In May 1995, Vennes began doing business with Tom Petters, through whom he eventually would make tens of millions of dollars in commissions for steering investors—many of them evangelical Christian groups and investors—to Petters’ Ponzi scheme. Three years later, Vennes began to lay the groundwork for his presidential pardon: cultivating Washington, D.C. power brokers, currying favor with Minnesota politicians by making hefty campaign contributions and eventually, soliciting them for letters of recommendation.

Vennes’ first foray into politics was a $2,000 contribution to Ted Mondale’s gubernatorial campaign on August 28, 1998. Mondale joined the Petters Group as an executive vice-president in 1998 also. And, according to a top Washington lobbyist who wrote Vennes’ first letter of recommendation for a pardon in 2000, it was through Ted Mondale, who worked with Vennes, and the connections of his father, former Vice President Walter Mondale, that Vennes first sought assistance for his presidential pardon.

In Part II of "Lawyers, Guns & Money," Ripple in Stillwater lays out the political and money timeline of the Frank Vennes Jr. pardon.

Research and graphics assistance by Ken Avidor