Ripple in Stillwater celebrates first anniversary online

By Karl Bremer
It’s been quite a first year for Ripple in Stillwater.

I published my inaugural post here on October 3, 2010, followed by the latest in a series of investigative articles I had written throughout last year on a fraudster known as “Bobby Thompson.”

That series of articles, which appeared here and on DumpBachmann.com, was virtually ignored by the mainstream media, but not by the Minnesota Society of Professional Journalists, which awarded it 2^nd Place in the special category of “Best Use of Public Records” in its 2011 Page One Awards. It also resulted in an investigation by the Minnesota Campaign Finance and Disclosure Board, which found “Thompson” guilty of making fraudulent campaign contributions in Minnesota as my earlier investigations had found. The CFB fined “Thompson,” who is on the lam from other state and federal investigations, $21,000. 

Frank Vennes Jr.

That was far from the only exclusive Ripple in Stillwater has broken in its first year. The malpractice lawsuit filed against GOP gubernatorial candidate Tom Emmer last year in the weeks before the 2010 election was first reported here. The twisted history of Michele Bachmann’s track-suited pastor pal “Bradlee Dean,” lead homobigot at the Annandale hate “ministry” You Can Run But You Cannot Hide International, was exposed on Ripple in Stillwater. The continuing saga of Michele Bachmann’s subsidy-reaping family farm in Wisconsin, first reported by me in 2007 and updated here this year, continues to dog her campaign. Likewise, Ripple in Stillwater has been the go-to source for the story on Bachmann’s Ponzi pal Frank Vennes Jr., the convicted money launderer and campaign contributor for whom she solicited a presidential pardon. The mainstream media is still playing catch-up on that story.

Ripple in Stillwater’s exclusive, in-depth look at the unsolved murder of legendary Stillwater storekeeper Caton Felix prompted widespread media coverage on the 30^th anniversary of his death last year. We've helped bring some sunlight to the shady lobbying shenanigans the City of Stillwater has engaged in regarding the proposed freeway bridge across the St. Croix River. And you’d never have heard about the Stillwater Sasquatch if Ripple in Stillwater hadn’t broken the story.

I’ve been able to indulge my own musical interests by publishing stories of personal heroes Dave Ray, Lil' Band O’ Gold, the Radiators, and James McMurtry, without first having to secure the imprimatur of the gatekeepers at mainstream media outlets. Stay tuned—there’s plenty more where that came from.

Ripple in Stillwater also has served as a repository for old articles deserving of a second life, like my Paul Wellstone interview from The Progressive in 1991. Look for more of those nuggets in the future as well.

The cherry on top is the forthcoming book on Michele Bachmann I and my two compatriots from DumpBachmann.com, Ken Avidor and Eva Young, have coming out in early December. For a decade, the local media slumbered through Bachmann’s rise in politics while we toiled away at documenting it. So when Bachmann’s political star began rising and a major New York publishing house went looking for someone to write the book on her, they tapped us. The book, The Madness of Michele Bachmann: A Broad-Minded Survey of a Small-Minded Candidate, is a compilation of years’ of material we’ve written about Bachmann on our respective websites.

Thanks for stopping by in the past year, whether you’re friend or foe. Your interest is appreciated, as are your links and acknowledgments. With your help, our total visits just rolled over 100,000 tonight on our first anniversary! Thanks, also, to the friends, family and professional colleagues who have encouraged me to keep on keepin’ on. I’m just gettin' warmed up, so stick around.

Bachmann Boondoggle Bridge legislation up for markup in House committee October 5

The markup on Republican Congresswoman Michele Bachmann’s bill to do an end-run around the Wild & Scenic Rivers Act in order to build her Boondoggle Bridge across the St. Croix River is Wednesday, October 5, in the House Natural Resources Committee.

Bachmann’s bill, H.R. 850, is one of about 20 bills the committee is expected to deal with at Wednesday’s meeting, which begins at 9 a.m. CST. It will be streaming live online at the committee’s website.

Minnesota Democratic Sen. Amy Klobuchar has introduced a Senate version of Bachmann's bill, S.1134, that was heard in the Senate Committee on Energy and Natural Resources Subcommittee on National Parks July 28.

You can use this form to send the committee your comments on Bachmann’s legislation. For some ideas on where else in Minnesota we could spend $360 million on bridge repair and replacement rather than this Bridge to Nowhere, you can start with this recent report. To discuss the issue of the precedent this bridge would set for other rivers protected under the Wild & Scenic Rivers Act, check out this past article. For background on one no-cost option the city of Stillwater and Minnesota department of transportation have so far ignored--reducing the frequency of the bridge's lift--read this. Jim Erkel of the Minnesota Center for Environmental Advocacy gave an excellent presentation at a recent forum on the proposed Stillwater bridge. You can view it here. For details on a more sensible bridge proposal that costs hundreds of millions of dollars less and significantly less in environmental impact, go here.

Please send your comments to members of the House Natural Resources Committee before Wednesday. Tell them this bridge is an environmental and economic disaster that will result in a horrible precedent for the development of other protected rivers nationwide. Tell them there are far more sensible bridge solutions to crossing a protected scenic riverway than with a $680 million, 65-mph freeway bridge just 6 miles from an existing eight-lane freeway bridge. Tell them this is the wrong bridge at the wrong time.

New historic Gateway Trail bridge over Washington County 15 gets a third lease on life

Not every Stillwater bridge is a boondoggle

By Karl Bremer

An historic Minnesota bridge has begun its third life in 134 years as part of the Gateway Trail between the city of Grant and Stillwater Township. The bridge will now serve bikers, hikers, rollerbladers and horseback riders crossing Washington County 15 (Manning Avenue) on the popular East Metro state trail.

This isn’t your run-of-the-mill span. This bridge has been around the state and has a few stories.

The historic 378-foot Silverdale Bridge was born in Sauk Centre in 1877. It was constructed as a wood-deck, wrought iron truss bridge across Main Street in Sauk Centre. In 1937, it was dismantled and moved up north to serve as a Minnesota Highway 65 crossing over the Little Fork River in southeastern Koochiching County near the town of Silverdale. Traffic loads that included heavy logging trucks eventually became too much for the old bridge and it was replaced and dismantled once more in 2009.

The Silverdale Bridge spanned the Little Fork River in Koochiching County.

Like the historic Stillwater lift bridge, the Silverdale Bridge is on the National Register of Historic Places. It was listed there in 1998, and is one of 24 bridges on the Minnesota Department of Transportation’s (MnDOT) list of historic bridges to preserve. Also, like the more famous lift bridge over the St. Croix River, the Silverdale Bridge is what is known as a “camelback-through-truss” design. Its wrought-iron construction is much less susceptible to rusting than steel, which explains its longevity.

Louie Zeleznikar of Silverdale, MN

Officially called Bridge No. 5721 in MnDOT parlance, the Silverdale Bridge also has been called the Zeleznikar Bridge, named for local Silverdale resident Louis Zeleznikar, who lived on the Little Fork River and died in 2007.

The Silverdale Bridge was scanned using laser survey equipment to measure the geometric properties of each member (check out this cool video) and moved to Maplewood, where it remained in storage until this year.

MnDOT began construction of earthen ramps on either side of Washington County 15 north of MN 96 in August 2009. Old Bridge No. 5721 was rehabilitated, reconstructed on-site and set on concrete abutments built into the berms on May 20. A new concrete deck was poured in June. Washington County paid $100,000 of the approximately $2.8 million cost for relocating the bridge.

Bikers, hikers and horseback riders no longer have to risk life and limb crossing Washington County 15, which some motorists apparently mistake for I-35.

The bridge was opened to nonmotorized, pedestrian and equestrian traffic in September. Its 18-foot width easily accommodates three lanes of “traffic” high above the speeding motorists on County 15 below.

ANOTHER RAIL-TO-TRAIL

That’s not the only good news for Washington County bikers and hikers. Work is beginning on the Brown’s Creek State Trail, which will connect the Gateway Trail at its junction with MN 96 to the St. Croix National Scenic Riverway in Stillwater. The 6.5-mile section will use the old Zephyr dinner train railroad right-of-way. Washington County kicked in $1 million toward the $4.2 million right-of-way purchase price. The state will pay for the remainder, including the cost of removing the old ties and rails, which will begin this fall. Funding for the project was in the 2011 bonding bill.

The trail may be open for walking later this fall. The Department of Natural Resources will pave 2 miles of the trail next summer and the remainder as additional funds are secured. Another bridge over Manning Avenue eventually will be built for the Brown’s Creek Trail.

The DNR will hold a public meeting and open house on the Brown’s Creek trail at the Stillwater Public Library October 19 from 4:30 p.m. to 7:30 p.m.

New bridge photos by Karl Bremer
Historic bridge photo courtesy of gatewaytrailmn.org.

Michele Bachmann owes her 6th District constituents a refund

Campaigning congresswoman has missed nearly 60% of House roll call votes since July 2011

By Karl Bremer

Michele Bachmann has failed to show up for work in Congress 58.7 percent of the time since July 1, missing 145 out of 247 roll call votes. The last time Bachmann even cast a vote was August 1. If we were to pay our goldbricking congresswoman on a pro rata basis for the time she was actually working for us in the past three months, we would dock her $174,000 annual paycheck $25,534.50.

Unfortunately, Congressional pay isn’t performance-based, and there are no penalties for not showing up. I don’t foresee Bachmann voluntarily forfeiting any of her ill-gained government salary either.

Recall for nonfeasance isn’t an option. Since 1996, Minnesota state legislators, the governor and other executive officers, and judges can be recalled for “malfeasance or nonfeasance” or conviction of a serious crime. But shiftless, no-show members of Congress like Bachmann are free to come and go to work—or not come at all—as they please.

The votes Bachmann has missed aren’t inconsequential little matters. As noted here earlier, Bachmann skipped voting on the 2012 Intelligence Authorization Act, even though she is assigned to the House Intelligence Committee, and partied with Iowa football fans at 9 a.m. the next morning instead. That same day, Bachmann also missed the House’s solemn remembrance of 9/11 and passage of a resolution commemorating the terrorist attacks that day.

Bachmann gets a lot of campaign mileage out of bashing the Environmental Protection Agency (EPA), one of her favorite whipping boys. Last month, Bachmann pledged to lock the doors and turn out the lights at the “job-killing EPA.”

So last week, one would think she’d be the “tip of the spear,” as she likes to call herself, to pass H.R. 2401, which calls for analyses of “the cumulative and incremental impacts of covered rules and actions of the EPA concerning air, waste, water, and climate change for each of calendar years 2016, 2020, and 2030.” Such analyses, the bill states, would include “estimates of the impacts of such rules and actions on the global economic competitiveness of the United States, electricity prices, fuel prices, employment, and the reliability and adequacy of bulk power supply in the United States; and (2) a discussion and an assessment of the cumulative impact on consumers, small businesses, regional economies, state, local, and tribal governments, local and industry-specific labor markets, and agriculture.”

But when it came time to hold the EPA accountable for its “job-killing” policies, Bachmann was nowhere near the voting button in the House chambers. Instead, she was in Nashville on September 23 being introduced at a campaign rally by her high-flying pal Pastor Mac Hammond.

Bachmann never fails to remind her audiences that she is a small-business owner with her husband. But H.R. 2608, a bill to extend most Small Business Act programs through FY2012 and repeal authority for a number of others, escaped Bachmann’s attention—and vote—while she was in Nashville with Pastor Mac as well.

Bachmann is nothing if she is not about children (you know, five biological and 23 foster). So you would think that H.R. 2883 to extend through FY 2016 such Social Security programs as the Stephanie Tubbs Jones Child Welfare Services Program and the Safe and Stable Families Program, and enhance a court improvement program “to serve the purpose of increasing and improving engagement of the entire family in court processes relating to child welfare, family preservation, family reunification, and adoption” would be right up her alley. But her “titanium spine” evidently turned to jelly. On September 21, when the House was voting to support children, Bachmann was probably cramming misinformation and lies for the next night’s debate, because she didn’t cast a vote on that bill.

The day before, Bachmann chose an Iowa meatpacking plant photo op over voting for the "Veterans Health Care Facilities Capital Improvements Act of 2011," which authorizes major medical projects and leases for the Department of Veterans Affairs. But what's supporting medical care for our veterans when you can stand amidst a few thousand pounds of hanging beef in a slaughterhouse for the cameras?

On September 15, Bachmann failed to show for votes to reauthorize the International Religious Freedom Act of 1998, and on the “Protecting Jobs from Government Interference Act.”

And on September 13, Bachmann, who helped start a charter school in her hometown of Stillwater, walked on a vote on H.R. 2218, the “Empowering Parents Through Quality Charter Schools Act.” The Act replaces “the current charter school grant program with a program awarding grants to states and, through them, subgrants to charter school developers to open new charter schools and expand and replicate high-quality charter schools.”

But Michele couldn’t be bothered with improving charter schools—not when she had a date on the Today show to defend her outrageous and dangerous comments on the HPV vaccine in the previous night’s debate.

Bachmann’s supporters and many in the kid-glove media have always loved to talk about her boundless energy and dedication to issues. What they fail to acknowledge is that her energy and dedication are rarely, if ever, expended on anything but promoting herself. As the numbers prove, that has worsened exponentially since she officially started running for president, to the point where her constituents should be demanding  a refund.

Now, about that $25,534.50, Michele. You can send it here:

Gifts to the United States
U.S. Department of the Treasury
Credit Accounting Branch
3700 East-West Highway, Room 622D
Hyattsville, MD 20782

The Madness of Michele Bachmann coming soon

New book by Ripple in Stillwater and Dump Bachmann authors due out in early December

While some in the mainstream media want to write off Michele Bachmann already in the loopy 2012 GOP presidential race, the co-authors of Ripple in Stillwater and DumpBachmann.com have just written her up.

The Madness of Michele Bachmann: A Broad-Minded Survey of a Small-Minded Candidate, is the new book on our absentee congresswoman by me, Ken Avidor and Eva Young. It's due out in early December from John Wiley & Sons Publishing--just in time for your holiday shopping--but you can pre-order it on Amazon.com now.

Bachmann's own book, Core of Conviction, is scheduled for release about a week earlier. Given Bachmann's penchant for burying the ol' Truth-o-Meter needle deep in the Pants-on-Fire zone, we're fairly certain that our assessment of her unseemly political career will be far more accurate and revealing than her own. We're also pretty sure that most of the main characters in our book won't find a place in Michele's, even though they are central to understanding her "core of conviction."

Another big difference between our book and hers: we didn't need a ghost writer.

The Madness of Michele Bachmann fills nearly 300 pages.

Former supporter's malpractice lawsuit against Tom Emmer dismissed in Wright County

By Karl Bremer

The remaining claims in a malpractice lawsuit filed against 2010 GOP gubernatorial candidate Tom Emmer by a former friend and supporter were dismissed by Wright County District Judge Stephan Halsey September 14.

The lawsuit was filed on Sept. 21, 2010, in the heat of last year’s gubernatorial campaign, by Steven R. Hackbarth and his roofing contracting company, Hackbarth Enterprises Corporation, both of Silver Lake, MN. Ripple in Stillwater broke the story two weeks later, and it created a firestorm among Emmer’s supporters, who accused Hackbarth of trying to extort money from Emmer to avoid a messy pre-election lawsuit.

“The timing of the filing,” Emmer’s lawyer Michael Schwartz told Ripple in Stillwater today, “speaks for itself.”

Emmer represented Hackbarth in a 2009 legal proceeding that resulted in a judgment against Hackbarth and cost him his state contractor’s license. According to Hackbarth, one of his roofing materials suppliers sued him in 2009 over money the supplier claimed Hackbarth owed him.

“People charged my account with the supplier and they weren’t supposed to,” Hackbarth told Ripple in Stillwater last year. “I was disputing that with my supplier, so I asked Emmer to represent me. But he didn’t file the documents he was supposed to file with the court. He showed up the day of the hearing,” but beyond that, Hackbarth said, “he didn’t do nothing.”

According to Hackbarth, Emmer botched his case. He said Emmer only filed discovery papers in the lawsuit a week before the hearing, and failed to properly file other court documents. Hackbarth said he couldn’t reach an agreement with his supplier to pay back the money the supplier claimed he was owed since “our money was all tied up because of our house burning down” in March 2009.

He lost the case with his supplier, and as a result of the judgment against him, the state Department of Labor and Industry revoked his contractors license in May of this year and levied a $10,000 fine against him, $8,000 of which was stayed.

At one point, Emmer tried to link Hackberth’s 2009 house fire to his innocence in the malpractice lawsuit.

“The circumstances surrounding the fire have been called into question by the fire inspection report,” Emmer wrote in asking a judge to dismiss the case. “Additionally, other circumstances regarding the fire at Hackbarth's home will be divulged if this litigation survives ... as the facts of the fire are necessary to establish the absence of fault in (Emmer’s) defense of this baseless action.”

Emmer campaign spokesman Carl Kuhl charged that “While Mr. Hackbarth denies political motivation, he made outrageous financial demands prior to filing his suit in the hope of leveraging Tom Emmer's candidacy to advantage himself. Tom Emmer does not negotiate with extortionists.”

Schwartz claimed Hackbarth sought more than $200,000 to settle the case.

The personal claims of Stephen Hackbarth were dismissed by Halsey on January 4, 2011. The claims dismissed last week were those of Hackbarth’s roofing business.

In his dismissal of the remaining claims last week, Judge Halsey cited Hackbarth’s failure to provide sufficient expert testimony in his malpractice lawsuit as required by law, along with other deficiencies in his claims.

After he filed the lawsuit, Hackbarth told Ripple in Stillwater that Emmer had represented him in previous legal matters, and that he’d been a longtime supporter of Emmer’s past political campaigns.

“If he would have just apologized, it probably never would have come to this,” said Hackbarth. “I pulled floats for him in parades for years. I have a John Deere tractor. My daughter has a goat, and we’d put a sandwich board on the goat with Emmer signs. And now all I got was kicked in the head. I thought he was my friend.”

Emmer’s lawyer Schwartz said today that “Tom is an outstanding attorney who had, and now again, has an unblemished record of providing zealous and ethical representation on behalf of his clients … It’s good that you’ve got a lawyer who’s both zealous and ethical. Some lawyers lack in either or both.”

Judge Halsey did not grant Emmer an award for attorney’s fees and costs associated with defending the matter. Schwartz said "We are not going to be pursuing costs aginst him."

Emmer took his Tea Party politics to the airwaves following his defeat by DFLer Mark Dayton in the 2010 election. He's been mentioned as a possible candidate for Minnesota's 6th Congressional District depending on what the district's current placeholder Michele Bachmann decides to do.

Feds: Vennes' criminal past was problematic for bringing new investors to Petters Ponzi scheme

February 2012 trial could create Michele
Bachmann's own 'crony capitalism' problem

Frank Vennes Jr. flees the lens of Ripple in Stillwater.

By Karl Bremer

Pre-trial documents filed last week in the federal government’s 24-count indictment against Frank Vennes Jr. on fraud, money-laundering and false-statement charges suggest that Vennes’ motives in pursuing a presidential pardon to wipe his earlier criminal past clean through friends like Michele Bachmann, Norm Coleman and Tim Pawlenty weren’t quite as altruistic as his supporters claimed.

At an arraignment hearing this morning before Magistrate Judge Jeffrey Keyes in U.S. District Court in St. Paul, Vennes pleaded "emphatically not guilty" to all 24 counts in the indictment.

When Vennes began pursuing a pardon in 2000 for his 1987 convictions on federal money laundering and cocaine and gun running charges, he sought help from powerful Washington, D.C. lobbyist John D. Raffaelli. Raffaelli met Vennes several times and was impressed by his story.

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

When Bachmann lent the weight of her congressional office in 2007 to campaign for a presidential pardon for Vennes, her close friend and major campaign donor, she stated that Vennes was “not asking for a pardon that he may achieve personal success. By the grace of God, that has been done.” Rather, she wrote in a passionate letter to the Office of the Pardon Attorney, “Mr. Vennes is seeking a pardon so that he may be further used to help others.”

Bachmann wrote that she knew from “personal experience” how Vennes had used his success to help others. “Despite his success,” Bachmann continued, “Mr. Vennes still encounters the barriers of the past and especially in the area of finance loan documents. This hinders his ability to expand his business which places limits on his support to the neediest in society.”

But a response from U.S. attorneys to motions filed by lawyers for Vennes and co-defendant James Nathan Fry suggests that Vennes was seeking a pardon because it was causing him problems with banks and potential investors in the Ponzi scheme in which he allegedly was involved with Tom Petters.

Vennes collaborated with Fry, CEO of hedge fund investment advisors Arrowhead Capital Management, LLC, to raise money for Petters and Petters’ company, PCI. From 1999-2008, according to the indictment, Arrowhead arranged the investment of more than $500 million of its investors’ funds in PCI, for which Vennes was paid $60 million in commissions by PCI.

Joseph Friedberg and Robert Richman, lawyers for Fry, argued in a memorandum filed with the court September 1 that all allegations pertaining to Vennes’ prior conviction should be stricken from the indictment because “Vennes was not a principal in any of the transactions involving Fry” and “his 1987 criminal conviction is not material to any of the issues in this case.” Vennes was merely an “intermediary” between Fry and Petters’ company, they stated in a memorandum to the court.

Frank Vennes Jr.

"Mr. Vennes' criminal record is no more material than is the criminal record of the Federal Express courier who delivered packages from PCI to Arrowhead," Friedberg and Richman claimed.

They also argued that Fry “had no duty to disclose” Vennes’ criminal past and that allegations that Fry had “affirmatively concealed” this information from investors in the Arrowhead Funds was “irrelevant, prejudicial and inflammatory.”

“All he (Vennes) was, was an agent for Mr. Petters,” Vennes’ lawyer Jim Volling told Magistrate Judge Keyes at a hearing on the motions following the arraignment hearing this morning. The government bringing Vennes’ criminal history into the case, Volling said, is nothing more than an “attempt by the government to prejudice the jury” and tell them “Mr. Vennes is a crook.” 

U.S. Attorney’s Office lawyers Timothy Rank and Joseph Dixon challenged those assertions in their response.

To say that Vennes’ past convictions of federal crimes was irrelevant to his current fraud and money laundering charges “defies common sense,” Rank told the judge. Rank noted that one of Vennes’ crimes for which he served time in prison was a “conviction of money laundering.”

“Fry knew very well that Vennes’s criminal history was material to investors—and he learned this very early in their business relationship,” Rank and Dixon wrote. “The government will present evidence at trial that in 2000, the Bank of N. T. Butterfield & Son (“Butterfield”), the Bermuda bank which, for more than a year, had acted as the administrator and custodian bank for Arrowhead’s offshore fund which was invested in PCI Notes, discovered Vennes’s criminal history and terminated its relationship with Arrowhead.”

According to the government’s response, “Fry also had to persuade Arrowhead’s auditor, KPMG, to continue in that capacity after KPMG indicated its concern about continued dealings with Vennes without disclosure of his criminal history. In October of 2000, Fry represented to KPMG that ‘Vennes’ case is before the Executive Committee of the White House for expungement and complete discharge.’”

It's not clear what the "Executive Committee of the White House" was that Fry allegedly referred to. Vennes applied for his presidential pardon through the U.S. Office of the Pardon Attorney in July 2000.

When asked by Magistrate Judge Keyes whether the government knew Vennes’ claim that he was seeking an expungement of his record through the White House was true, Rank replied “I don’t know.”

The U.S. Attorney's response continues: “Vennes’s convictions were not ‘expunged,’ and so Fry represented to KPMG in March 2001 that 'ACF [Arrowhead Capital Finance, Ltd.] now deals direct with Petters and the previous arrangements involving MetroGem and Frank Vennes no longer apply.' This, of course, was false and designed to conceal Vennes’s involvement in the PCI transactions: while Fry had altered the transactions so that funds flowed directly from PCI to Arrowhead, Vennes remained contractually in place controlling the deals and the communications between Arrowhead and PCI.”

Rank told the judge that “Metro Gem is Frank Vennes” and that “Metro Gem acted as the agent that controlled the deal flow between Arrowhead and PCI.” Rank added: "The only way they could get those transactions was to contact Vennes.” At that point, Vennes laughed out loud.

Volling disagreed.

“Mr. Vennes was a conduit for information. He didn’t control the deal flow,” Volling told the court.

Friedberg, Fry's lawyer, explained that originally, Arrowhead sent investors' money to Metro Gem and then Metro Gem sent it to PCI. But after the investment structure was changed between 2001 and 2003, Arrowhead stopped sending funds through Metro Gem. "That left Frank Vennes as a salesman for PCI," Friedberg told the court.

The government’s attorneys stated in their response that they will "present additional evidence that Fry knew that disclosure of Vennes’s role and criminal convictions was material to investors. Indeed, an Arrowhead internal meeting agenda from early 2003, contains, under the heading “Goals,” the following items:

“1. Eliminate any legal/operational process that puts Metro Gem in the trail of money flow (big investors will do background checks on all parties, thus stopping money flow if felony convictions are discovered)

“2. Keep Metro Gem in the mix to obtain fee income on the amount invested

This Arrowhead memo, Rank told the court, shows that Fry was concerned about Vennes' troubled past "well after the structure had changed" and termed the failure to disclose Vennes' criminal past to investors a "classic fraudulent omission."

The U.S. Attorney noted in its response that “the government will adduce evidence at trial that Vennes began searching for other individuals to form hedge funds … because he himself had difficulty bringing in institutional investors due to his criminal history.”

Thus, it appears from the government’s argument that Vennes’ determination to secure a pardon to wipe his record clean was driven by his need to find new investors to steer to Petters' Ponzi scheme—not, as Raffaelli said Vennes told him, so he could bring his ministry into federal prisons. And certainly not, as Bachmann claimed, to help the “neediest in society.”

A jury trial for Vennes and Fry is currently set for Feb. 6, 2012.

Photos by Karl Bremer.