Charity donations paid for tanning salons and amusement parks, says FBI investigator in Steve Stockman trial
Former U.S. Congressman Steve Stockman spent $450,000 in charitable funds from an East Coast philanthropist on personal expenses including dolphin boat rides, tanning salons, a kennel bill, a new dishwasher and airline tickets to Sudan in North Africa, according to an FBI forensic accountant who testified Wednesday in Stockman’s fraud trial.
In all, the ex-Republican lawmaker from Clear Lake is charged in a federal indictment with syphoning off $1.25 million in donations meant for charitable causes, between 2010 and 2014, through a series of bank transfers, to pay personal and campaign costs.
Stockman’s defense lawyers counter that while Stockman may not have spent his funds wisely, he didn’t break the law. His defense team has grilled a series of prosecution witnesses from the IRS and FBI about why they didn’t investigate the major donors about the intent behind their major transactions.
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Two major conservative donors provided the funds that prosecutors have been probing in two weeks of testimony to prove what they have characterized as a “white collar crimes spree” by Stockman.
Richard Uihlein, a shipping supplies magnate from the Chicago area, earlier testified that he gave Stockman a charitable gift of $350,000 for a project called Freedom House that would establish a training center and housing facility for Capitol Hill interns.
Uihlein’s second contribution, an independent expenditure of $450,000, was meant to cover a political mailing during Stockman’s GOP primary bid to unseat Republican Senator John Cornyn. Prosecutors contend that Stockman was the actual recipient of the funds, in violation of election law, and they have argued he illegally used a sizable surplus from that fund on his own expenses.
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The other major gifts highlighted Wednesday in testimony came from Stanford Z. Rothschild Jr., a Baltimore money manager, who donated $450,000 between 2010 and 2012 to various charities Stockman oversaw, according to testimony. Government prosecutors are attempting to prove that Stockman and two aides transferred Rothschild’s and Uihlein’s donations from bank to bank and the former lawmaker failed to use the money as promised, but rather spent it on his own expenses.
On the stand last week, Uihlein, the Midwestern conservative donor, told jurors he wanted his funds to go toward Freedom House. An FBI witness said the money was transferred and spent on a video surveillance project of a potential political rival of Stockman and other non-charitable expenses.
Rothschild died in February 2017 at the age of 91 before Stockman and two aides were arrested on a 28-count indictment. His foundations in Maryland support education, community well-being, and the arts, according to the Rothschild Capital Partners website.
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Rothschild’s personal secretary, Jean Dellman, testified Wednesday that Thomas Dodd, who solicited $450,000 for Stockman’s charities, was one of the most aggressive fundraisers the foundation encountered.
She said she believed her late boss intended the gift to be spent on policies and philosophies he supported but not for political purposes.
An FBI accountant followed the path Rothschild’s money took in Stockman’s possession, including credit card bills for trips, department store expenses and SkyMall purchases.
Gabrielle Banks covers federal court for the Houston Chronicle. Follow her on Twitter and send her tips at firstname.lastname@example.org.