Campaign donations made more than four years ago at a celebrity-studded Hollywood gala have led to a federal criminal trial against a former finance director for Sen. Hillary Rodham Clinton (search) that could hamper her future campaigns.
The trial set to open Tuesday focuses on a lavish August 2000 political party at a tony Brentwood estate that drew dozens of A-list guests and performers, including Brad Pitt (search), Jennifer Aniston, Cher, Diana Ross and Muhammad Ali.
Clinton hasn't been linked to charges that the cost of the event was vastly underreported, but Republicans will be watching for any ammunition they can use against the Democrat, considered an early front-runner for the 2008 presidential nomination.
David Rosen (search), who was Clinton's finance director during her 2000 U.S. Senate run, faces three counts of filing a false statement. An FBI agent speculated in an affidavit that Rosen was trying to duck federal financing rules so the campaign would have more money to spend on other expenses.
Rosen pleaded not guilty in January. He could face up to 15 years in prison and $750,000 in fines if convicted.
The party, called a "Hollywood Gala Salute to President William Jefferson Clinton," included both a dinner and a concert. About 350 people accepted invitations to both, which cost $25,000 a couple. About 1,200 people purchased $1,000 tickets just for the concert.
Many people got complimentary tickets and campaign reports never gave a full accounting of the total money taken in. However, organizers reported raising nearly $1.1 million for a joint committee benefiting Hillary Clinton's Senate campaign and the national and state-level Democratic parties.
Rosen, 40, reported the event was underwritten by about $400,000 worth of "in kind" contributions — goods and services provided for free or below cost — but Peter F. Paul, a three-time convicted felon who pleaded guilty in March to securities fraud charges, has told prosecutors he gave the campaign at least $1.1 million for the affair.
Paul has filed a lawsuit claiming he bankrolled the gala on a promise that former President Clinton would become a "goodwill ambassador" for his Internet media company. He is ready to testify against Rosen, according to his attorney, Joseph Conway.
Another of the event's organizers, the man who corralled the celebrities, said Rosen was a "decent person" who faced a devil's choice: risk getting fired by exposing the gala's skyrocketing tab or cover up its true cost.
"David I don't think deserves to go to jail," co-organizer Aaron Tonken said in a recent interview from prison, where he is serving 63 months for unrelated charges of defrauding charities of hundreds of thousands of dollars.
Tonken believes the Federal Election Commission should fine Hillary Clinton's campaign.
To build its case, the government enlisted Raymond Reggie, a prominent political consultant whose sister is married to U.S. Sen. Edward Kennedy (news, bio, voting record). Prosecutors have not named Reggie, but two sources familiar with the case said he is the "cooperating witness" identified in court documents.
During a secretly recorded conversation with Reggie in September 2002, prosecutors said Rosen made incriminating statements they will introduce at trial. Reggie pleaded guilty last month in Louisiana to unrelated bank fraud charges.
A request for an interview with Hillary Clinton was referred to her lawyer, David Kendall, who would not comment. Last year, Kendall told The Associated Press that Clinton's campaign properly reported all donations in 2000.
Rosen's attorney, Paul Mark Sandler, also declined to comment.
It is not the first time a Clinton campaign has been under scrutiny. President Clinton's 1996 campaign was dogged by allegations of illegal fundraising from overseas donors.
"Things like this have occurred along the way in the Clinton national role and they have handled it," said Lee Miringoff, an independent pollster and director of the Marist Institute for Public Opinion at Poughkeepsie, N.Y.
The key, he said, is whether "fingerprints lead back to her."
Government lawyers won't say publicly why they believe Rosen might have underreported the cost. But one theory suggests it would have allowed Clinton's campaign to spend more money on essentials such as advertising.
Under arcane campaign finance rules of the time, reporting the event's actual cost would have forced the campaign to forfeit coveted "hard money," according to Larry Noble, a former Federal Election Commission lawyer who now leads the campaign-finance watchdog Center for Responsive Politics.