Tuesday, August 31, 2010

Corporate Executive Charged in Illegal Campaign Contribution Scheme

United States Attorney's Office

District of Massachusetts

BOSTON—A Boston based real estate executive was charged today in federal court with engaging in a scheme to conceal illegal campaign contributions made to federal campaign committees. He is also charged with witness tampering.

Assistant Attorney General Lanny A. Breuer of the Criminal Division, United States Attorney Carmen M. Ortiz, and Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation - Boston Field Office, announced today that MARTIN RAFFOL, 54, of Natick, was charged with one count of engaging in a scheme to conceal material information from the Federal Election Commission.

RAFFOL served as executive vice-president for a Boston company that provided management services to a portfolio of real estate holdings, including several publicallysubsidized housing communities in Dorchester and Roxbury. The Information alleges that as part of its business, executives from the company actively solicited campaign contributions from individuals for elected candidates for federal, state, and local office throughout the years. These executives did so primarily to advance the business interests of the company, including to obtain support for public financing of a large-scale, mixed-use development project within the City of Boston. The Federal Election Campaign Act limits the amounts individuals can contribute to election campaigns and political campaign committees, prohibits corporations from making direct contributions to federal candidates, and requires the true identity of each contributor to be disclosed.

It is alleged that, as part of an effort to increase the amount of campaign contributions to candidates who supported the company’s projects or who might support these projects in the future, executives and senior management directed RAFFOL to solicit campaign contributions from vendors who regularly did work for the company.

RAFFOL in turn allegedly engaged in an ongoing scheme whereby he reimbursed the vendors for thousands of dollars of campaign contributions he solicited from them. This included vendors who provided general contracting services, energy services, and security services. According to the Information, as a result of RAFFOL’s scheme, the true source of these vendor’s campaign contributions were disguised from the FEC, similar state authorities, campaign committees and ultimately, the public.

U.S. Attorney Ortiz said, “Transparency is the cornerstone of federal campaign financing. The public has a right to know the true source of financial support for its elected officials.”

In total, RAFFOL allegedly caused over $12,000 in illegal campaign contributions to candidates running for federal office, specifically candidates for the U.S. House of Representatives. It is further alleged that he also caused over $30,000 in illegal contributions to candidates running for state and local office, including candidates for Governor, Lieutenant Governor, Secretary of State, State Senate, House of Representatives, District Attorney, Mayor of the City of Boston and Boston City Council. This scheme caused numerous reports, which falsely indicated the source of these contributions to be unwittingly filed by the relevant political committees with the FEC and similar authorities. There is no evidence that the federal campaign committees listed in the Information had knowledge of RAFFOL’s reimbursement scheme.

The Information further alleges that RAFFOL engaged in witness tampering to conceal the illegal campaign contribution scheme and to prevent law enforcement from learning of the scheme. In particular, RAFFOL instructed a cooperating witness to lie to authorities if authorities questioned him about the campaign contribution scheme.

If convicted on these charges, RAFFOL faces up to five years’ imprisonment, to be followed by three years of supervised release and a $250,000 fine for the false statement charge, and 20 years’ imprisonment, to be followed by three years of supervised release and a $250,000 fine for the witness tampering charge.

The case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney James Dowden of Ortiz’s Economic Crimes Unit and Senior Litigation Counsel William M. Welch II of the Criminal Division.

The details contained in the Information are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

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