| Subject: Tax records from 2004 examined in Fieger case |
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Chris
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Date Posted: 02/ 7/06 5:40pm
In reply to:
Chris
's message, "Testimony starts in U.S. jury probe of Fieger" on 01/26/06 6:49pm
Tax records from 2004 examined in Fieger case
Attorney says there was no cover-up over campaign ads
February 1, 2006
Email this Print this BY DAWSON BELL and JOE SWICKARD
FREE PRESS STAFF WRITERS
A memo from Doug Baker, special assistant attorney general, also refers to alleged corporate spending.
Who's who in the Fieger investigation
State:
Mike Cox: Michigan attorney general
Doug Baker: Special assistant attorney general
Thomas Cameron: Assistant attorney general
Donovan Motley: Attorney general investigator
Brian Connors: Forensic accountant with Conway, MacKenzie & Dunleavy of Birmingham
Fieger and associates:
Geoffrey Fieger: Southfield attorney who paid for the ads
Paul Evancho: Fieger's accountant with Correll Associates of Southfield
John Barlow: Owner of J.L. Barlow & Associates advertising company that helped with the production of ads for Citizens for Judicial Reform
Robert Miller: Democratic activist whose name appeared on some state documents filed for the Citizens for Judicial Reform
Herb Charbenau, Len Lenkowitz, Len Lenkiwitz: Persons listed as officials of Citizens for Judicial Reform. State investigators were unable to verify their existence.
JOE SWICKARD
Investigators probing Geoffrey Fieger's role in the anonymous attack ads on a Michigan Supreme Court justice in 2004 suspected the brash attorney of violating more than arcane provisions of campaign finance law.
Investigators suspected that Fieger not only used corporate money to fund the ad campaign to defeat Stephen Markman, but that he wrote it off as a business expense on his firm's 2004 income taxes and then amended the return to cover it up, according to internal investigative records obtained by the Free Press under the Freedom of Information Act.
On Tuesday, Fieger angrily denied any wrongdoing.
Fieger said state investigators "came up with a cockamamie theory" that there was wrongdoing with his taxes. "I paid taxes on it. I paid taxes on that money."
Special Prosecutor Patrick Shannon abruptly terminated the investigation last month, leaving many questions unresolved.
How did Fieger account for the nearly $500,000 he spent on the ads? And was the accounting changed with the amended tax return?
That attorneys and investigators from Attorney General Mike Cox's office examined those questions is clear. What is not clear is the conclusions they reached.
The state-level criminal investigation ended when Shannon announced on Jan. 14 that he would not file criminal charges.
He was appointed three weeks earlier by Cox after the case went luridly public in November with Cox's admission that he had been unfaithful to his wife and the accusation that Fieger threatened to blackmail him with it if the campaign finance investigation wasn't dropped.
In the meantime, however, a federal grand jury investigation is under way over possible fund-raising violations when Fieger helped bankroll Democratic presidential candidate John Edwards.
Federal agents seized Fieger's 2004 tax records last year. Those records are available to the grand jury.
Fieger said two weeks ago he expects to be indicted.
The documents obtained by the Free Press include a report from a forensic accountant who reviewed Fieger's financial records and a memo to Shannon from Special Assistant Attorney General Doug Baker.
Portions of both were redacted, apparently because of a court order requiring investigators to return some of Fieger's tax documents. But both refer repeatedly to amendments to the firm's 2004 tax return that were filed in August 2005, after investigators searched the offices of Fieger's media buyer and seized Fieger's bank records.
Fieger's media buyer is John Barlow, owner of J.L. Barlow & Associates advertising company. He helped with production of ads for the group Citizens for Judicial Reform, which was the conduit for the Markman attack ads.
The records obtained in that search showed Fieger had been behind the Markman attack ads.
The bank records also showed that he paid for them with checks written on the law firm's corporate bank account. One of the few potential felonies under Michigan campaign finance law is using corporate money for political purposes.
According to a report from Brian Connors, the forensic accountant retained by the state: "Based on the trail of evidence it is clear the corporate entity, Fieger & Fieger, paid a total of $484,759.65 for media advertising to oppose" Markman.
The accountant went on to discuss the possibility that Fieger would claim the spending was corporate only in "form" but not "substance," and the need to review additional tax and financial records to determine what really happened.
Connors, a Birmingham accountant, declined comment Tuesday.
Baker's memo also refers to the alleged corporate spending and the possibility that the tax records were revised in "an attempt to cover up."
The nature of the possible cover-up was blacked out in the record.
Baker lays out a series of potential criminal violations committed by Fieger and his allies in the anti-Markman campaign.
Shannon, in announcing his decision not to file criminal charges, said he believed the campaign finance law had been violated but that the matter could be better handled as a civil violation.
Cox's spokesman Rusty Hills declined Tuesday to comment on the reports.
"As far as we're concerned, Mr. Shannon was the last word on any potential charges related to this investigation," he said.
Fieger said the Cox investigation is closed and there is no need to rehash it. He said the 2004 income tax returns have "nothing to do with the federal case. That has to do with the Cox case."
He said his law firm is a small corporation and that the accounting of the corporate versus personal spending is balanced out at the end of every year.
"I'm not the Ford Motor Company," he said.
Fieger said the probes are politically motivated "and always about harassing me."
He also said that it is part of a Republican effort to weaken former U.S. Sen. Edwards, a trial attorney like Fieger, as potential Democratic presidential candidate in 2008.
Richard Steinberg, one of Fieger's lawyers, said state and federal investigators have had "at least three bites at the apple" in looking at the 2004 returns.
Steinberg said federal agents seized copies when they raided Fieger's law office, state agents seized copies at his accountant's office and then federal agents seized those records minutes after the state agents returned them to the accountant under court order.
Fieger said the timing of federal agents appearing at the accountants' office shows a close relationship between the state and federal authorities.
Steinberg also said that Fieger's attorneys met with the state investigators to discuss the tax returns "and volunteered evidence that cleared their client. The attorney general decided to continue the investigation anyway. And now the FBI is tromping over the same ground."
"And still there was no evidence of any crime and there will be none, either," Steinberg said.
Contact DAWSON BELL at 313-222-6604 or dbell@freepress.com.
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