Political Hazard: Candidates Bilked By Their Treasurers

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The Wall Street Journal

Political Hazard: Candidates Bilked By Their Treasurers
Trusted Friend Embezzles Cash From Campaign Till; Ms. Detert's Hard Lesson
By JEANNE CUMMINGS
February 8, 2007; Page A1

WASHINGTON -- Florida Republican Nancy Detert had two days to register her candidacy for Congress last April when she got a disturbing email from her secretary: Ms. Detert's campaign treasurer was missing. Ms. Detert grabbed her cellphone: "Is my money there?" she recalls asking. Most of it wasn't. Court records show that Randolph Maddox, the treasurer, had transferred $94,000 from the Detert campaign's Wachovia Bank account in Venice, Fla., to a Bank of America account he controlled in another county. Then he withdrew the money in cash, stuffed it into two carry-on bags and flew to Buenos Aires.

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Some prominent politicians have been victims. House Republican Leader John Boehner, of Ohio, discovered in 2004 that his treasurer had gambled away more than $600,000 in campaign funds at Indiana riverboat casinos over a period of nearly 10 years. A year earlier, Delaware Sen. Joe Biden, a 2008 Democratic presidential hopeful, saw his Senate re-election coffers nearly emptied when an assistant treasurer swiped more than $400,000. Both of those treasurers went to prison. But sometimes politicians let aides repay money without facing charges, thus avoiding unwanted publicity in the midst of a campaign.

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The FBI traced Mr. Maddox's trail to the Miami airport. When he checked in for his April 5 flight, he had declared to customs officials that he was carrying $94,616 in cash... On April 13, Mr. Maddox arrived at the Miami airport, where Mr. Reinhold met him and took him straight to Manatee Glens Hospital stabilization unit. He was diagnosed, according to his attorney, with bipolar disorder, characterized by a repeating cycle of depressive and manic episodes. Mr. Maddox offered to return the stolen cash he had brought back with him from Argentina. But $27,166 of it was missing. Mr. Maddox's parents told Ms. Detert they would make up the difference by taking out a loan on their house. But that posed another problem. Under federal campaign finance law, no donor could give a candidate more than $2,100 per election, the 2006 maximum. Would reimbursing the money violate the law?

Ms. Detert sent an SOS to the FEC, seeking a waiver. Time was of the essence because the campaign was under way. On May 10, the commission issued an advisory opinion that found a way around the donation limit. Because Mr. Maddox's family was trying to mitigate potential criminal liability for their son, the Maddox check wasn't intended to influence "a federal election and would not constitute a contribution by his parents to the Detert Committee." The FEC told Ms. Detert to list the missing money under the "Other Disbursement" column on disclosure reports.

Ms. Detert's campaign opponents used the Maddox episode to attack her competence. On Sept. 5, she lost the primary race. She came in second, less than 10 percentage points behind the multimillionaire winner. Mr. Maddox became the first person to plead guilty and be convicted under the "wrongful conversion of campaign funds" provision in the 2002 McCain-Feingold campaign-finance reform law. He was sentenced in November to five years' probation, with a requirement to get mental-health treatment. Mr. Reinhold said Mr. Maddox is staying in his parents' home.

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