Group Urges Ethics Probe of Sen. Clinton

A self-described "public interest group that fights government corruption" has filed an ethics complaint with a Senate panel, asking it to investigate Sen. Hillary Rodham Clinton (search) for her role in an alleged attempt to defraud the Federal Election Commission (search) and the U.S. Senate.

Judicial Watch (search) has a history of monitoring the New York senator and her husband, former President Bill Clinton, and its latest allegation is that Clinton is responsible for omitting from her fund-raising report to the FEC a $1.9 million contribution that funded an August 2000 fund-raiser for her Senate campaign called "Hollywood Tribute to William Jefferson Clinton."

The fund-raiser has landed Clinton's campaign finance director, David Rosen (search), in criminal trouble. Rosen goes on trial Tuesday in a California federal court on charges that he deliberately filed the false report with the FEC that undervalued the cost of the star-studded event. Judicial Watch alleges that Clinton knew of the contribution as well as Rosen and failed to report the true value of the expenditures, despite repeated demands.

Judicial Watch President Tom Fitton (search) argued that Clinton closely monitored the Hollywood fund-raiser and knew its actual cost was much greater than the $400,000 tab reported in campaign financial filings.

"They're false and she knows them to be false," Fitton said.

Under campaign finance laws then in effect, underreporting the cost of the event would have given the Clinton campaign more money to spend on the race.

The senator has not been charged in the case, but Judicial Watch is demanding that the U.S. Senate Select Committee on Ethics "take all appropriate disciplinary action" based on alleged and knowing misreporting.

The man behind the allegations against the senator and Rosen is Peter Paul (search). In June 2001, Paul filed a lawsuit against Hillary and others, claiming he bankrolled the gala on the promise that former President Clinton would become a "goodwill ambassador'' for his Internet company.

Paul, however, does have his own legal tangles. In March, Paul, co-founder of Stan Lee Media Inc. (search), pleaded guilty to securities fraud. The charges arose from Paul's leading role in a scheme to manipulate the price of Stan Lee Media common stock; prosecutors said the scheme resulted in approximately $25 million in losses.

Paul was originally indicted in June 2001, but fled to Brazil, where he was arrested by Brazilian authorities in August 2001 and extradited to the United States in July 2003. He could face up to 10 years imprisonment, a maximum fine of $5 million and restitution to be determined by the court.

Judicial Watch took the unusual step of providing legal defense work in his criminal case, but Paul later broke with the group, complaining they were using him to raise money from conservatives opposed to the Clintons.

Fitton said the group had a "good working relationship" with Paul and provided him valuable legal work, but denied the group had used him in any way.

Clinton's campaign has maintained that all contributions were properly reported. Clinton adviser Howard Wolfson called Judicial Watch's complaint "a meritless publicity stunt by a thoroughly discredited right-wing attack group."

Robert Walker, a senior staffer on the ethics panel, declined to comment.

FOX News' Megyn Kendall and Liza Porteus and The Associated Press contributed to this report.