Aide testifies he lacked character to challenge ex-congressman Steve Stockman about fraud scheme

April 4, 2018

Federal prosecutors concluded their case Tuesday against former Republican U.S. Congressman Steve Stockman, following nine days of testimony from dozens of witnesses in a campaign fraud trial including regret expressed by a co-defendant and longtime aide for not questioning widespread misconduct.

“I’m sorry I had the lack of character to stand up to him and ask why,” testified Jason Posey, one of two former aides who plead guilty and testified against their ex-boss.

The prosecution called as its final witness one of the two FBI special agents who investigated the case to detail some of Stockman’s final monetary transactions via crypto currency and cash withdrawals in Switzerland and Egypt while his aide was overseas, laying low to avoid the attention of investigators, according to the aide’s testimony.

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Stockman, 61, of Clear Lake, a firebrand for right wing causes, maintains his innocence in a 28-count criminal indictment, to which his two aides Posey and Thomas Dodd have pleaded guilty. Prosecutors allege the two-time congressman led a “a white collar crime spree,” diverting $1.25 million in donations from two leading conservative backers to pay off personal and campaign costs.

Stockman’s legal team has argued his finances were messy, but his heart was always in the right place. If funds were not spent as donors intended it does not mean he committed fraud, they say.

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Posey, a former campaign treasurer who is employed while on bond as a short order cook in his native Mississippi, told the jury Wednesday he knew his boss was directing him to make unlawful transactions, setting up several sham nonprofit organizations and telling a donor they were legitimate.

Defense attorney Charles Flood questioned Posey about his false statements he agreed to make on federal election filings and misrepresentations he made to major donors about what would happen with their funds. He asked Posey whether he was up front in his communications with Richard Uihlein, a midwestern shipping supplies magnate, who gave Stockman’s organizations hundreds of thousands of dollars.

Did Uihlein know that giving money to these organizations or to Steve Stockman was one in the same?

“Is that the gist of your testimony?” Flood asked, that he worked without questioning Stockman.

Posey said yes, adding, “I’m sorry I had the the lack of character to stand up to him and ask why.”

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“Well, you can start with the truth,” Flood said, pressing the witness to probe deeper.

“That was the truth,” Posey said.

The prosecution ended its case by calling back to the stand FBI Special Agent Leanna Saler, to explain to the jury how Stockman used Bitcoin to forward funds to Posey while he was staying in Egypt and the purchases of so-called “burner phones” which were used to discuss an improper campaign donation, according to Posey’s testimony. Both were difficult for law enforecment to trace, Saler testified.

Defense lawyer Sean Buckley asked whether the Bitcoin transactions were charged in Stockman’s indictment. Saler said no. Nor were ATM withdrawals Stockman made in Switzerland and Cairo, she testified.

Under further questioning from Buckley, the agent stated that the FBI never investigated the two mega-donors who gave Stockman the chartitable contributions that were later diverted to pay personal and campaign editors.

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Stockman’s lawyers are expected to call their first witness after the lunch recess.

Gabrielle Banks covers federal court at the Houston Chronicle. Follow her on Twitter and send her tips at gabrielle.banks@chron.com.