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Tuesday, January 12, 2010

Alabama Governor's Son Has Connections to Money Laundering

In explaining Alabama Governor Bob Riley's opposition to electronic bingo, press secretary Todd Stacy recently stated: "Governor Riley will not tolerate criminal activity from anyone--no matter how powerful or politically connected they may be."

If we'd read that with a mouthful of coffee, we would have spewed java clear across our kitchen. That's because Riley's own son, Homewood-based attorney Rob Riley, reportedly has ties to money laundering. Last time we checked, money laundering is a crime.

For good measure, our sources indicate that Daddy Riley, then a U.S. Congressman, helped steer sonny boy clear of federal investigators.

Bob Riley won't tolerate criminal activity? Hah!

How do we know about Rob Riley's ties to money laundering? They came to our attention last fall as we prepared a post about activities leading up to 60 Minutes' report on the Don Siegelman prosecution.

As the air date for the 60 Minutes piece drew near, it became clear that Alabama attorney and whistleblower Jill Simpson would play a major role in the story. Rob Riley apparently wanted to do an on-camera interview for 60 Minutes too, in an effort to counter Simpson's story that the Siegelman prosecution was orchestrated for political reasons by GOP operatives.

Riley, however, forgot a minor detail--Jill Simpson knows him, and his business dealings, all too well.

What happened next? Here's how we reported it:

Simpson worked up a list of questions that could be asked of Riley about two organizations: an Alabama-based company called Crimsonica and a Virginia-based company called Triad Management Services. The list of questions made their way to a key person at 60 Minutes, and when Riley learned about some of the questions that might be put to him, he suddenly decided that an on-camera interview wasn't such a good idea after all.

We already know about Rob Riley's ties to gambling, through Crimsonica. But what about Triad Management Services? That's where money laundering enters the picture.

A March 1998 article by James Youngclaus at opensecrets.org provides some intriguing information about Rob Riley. The title of the article is "All Politics is Legal: Soft Money, Issue Ads, Non-Profits May Nationalize '98 Local Elections."

What was Triad Management Services up to? Reports Open Secrets:

Triad Management Services--a conservative "consulting" group that was virtually unheard of until it surfaced last year in congressional investigations of the 1996 campaign--offers a vivid example of the new lawless campaign-spending era. Triad does not embody such headline-grabbing topics as foreign money, Buddhist temple fund-raising, and White House telephone solicitations, but it demonstrates how money in politics skates right to the edge of the law--and perhaps beyond.

The self-styled political financial management firm is headed by Oliver North's former campaign fund-raiser Carolyn Malenick. Funded primarily by secretive donors, Triad offers campaign analysis and spending advice to candidates and donors alike. In the last election cycle, Triad recommended social and fiscal conservative candidates to like-minded contributors, who then gave directly to the candidates or through PACs or provided support through "independent" advertising.

Individuals legally can contribute $2,000 to a candidate in an election cycle, but PACs can give $10,000. So Triad matched conservative donors with conservative PACs. A donor would contribute directly to a candidate, then give to a Triad recommended PAC which, in turn, would contribute to the same candidate. This "laundering" arrangement allows a donor to skirt campaign finance limits.

Who was in the middle of this cozy arrangement? Why, none other than Rob Riley. Reports Open Secrets:

Here's one example The Wall Street Journal highlighted: Robert Riley Jr. contributed $5,000 via five different PACs to his father, Robert Riley Sr., who was elected to Congress from Alabama's 3rd District. In each case, the PAC gave to Riley Sr. within a few days or weeks of receiving money from Riley, Jr. Triad claimed that the practice doesn't constitute money laundering because the PACs could not guarantee that money from donors would be used to support specific candidates.

Jill Simpson provided 60 Minutes with several questions that could be asked of Rob Riley about Triad Management Services. Riley apparently wanted no part of answering them. Here are a few of the questions:

3. You were accused in 1996 after the 1996 election of violating the FEC laws in that you donated over $2,000.00 to a candidate in an election cycle. Is that correct sir?

4. The Wall Street Journal accused you and proved that you contributed over $5,000.00 via five different PACs to your father's campaign during one election cycle and violated the FEC law. Is that correct Mr. Riley?

5. You tried to claim at the time to The Wall Street Journal, Mr. Riley, that that practice did not constitute money laundering, did you not? In fact, you knew that was money laundering didn't you, Mr. Riley, and was a direct violation of the FEC laws?

6. You tried to claim that the PAC would not guarantee that the money would be used for a specific candidate but in fact all the money you donated was given to your father within a couple of days of you donating and you knew all along where the money was going didn't you Mr. Riley?

Then came a couple of questions that might have caused Rob Riley to soil himself. We'll have to leave that to readers' imaginations:

7. In fact, this laundering arrangement allowed you to violate campaign financial limits, did it not?

8. Further you would have been prosecuted if it had not been for your father and his GOP friend, Fred Thompson, stopping the investigation of this money laundering investigation, is that true?

Fred Thompson? Isn't that the guy who ran a desultory campaign for the GOP presidential nomination in 2008? Wasn't his campaign so bad that some folks said it seemed Old Fred really didn't want the job? Maybe that's because Old Fred didn't want anyone asking questions about his history of helping to cover up money laundering.

Bob Riley won't tolerate criminal activity? Don't make us laugh.

While we're at it, let's examine the full list of questions about Triad Management Services that Jill Simpson supplied to 60 Minutes. This also includes the full opensecrets.gov article:

Simpson Triad

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