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In washington VV and ethics
August 24, 2011
James W. Mcjunkin Assistant Director in Charge FBI Washington Field Office 601 4th Street, N.W. Washington, D.C. 20535 BY HAND Re: Request for Investigation into Conduct of Rep. Vern Buchanan CR-FL) Dear Assistant Director McJunkin: Citizens for Responsibility and Ethics in Washington ("CREW") respectfully requests that the Federal Bureau of Investigation commence an immediate investigation into whether Rep. Vern Buchanan (R-FL) tampered with a witness and obstructed a Federal Election Commission ("FEC") investigation by trying to coerce his former business partner into signing a false affidavit declaring Rep. Buchanan had no involvement in, or knowledge of, an illegal conduit contribution scheme.
Rep. Buchanan owned several car dealerships in Florida and other states when he launched his first campaign for Congress in 2005. I These dealerships included Venice Nissan Dodge, Sarasota Ford, and Hyundai of North Jacksonville ("HNJ,,).2 Rep. Buchanan's Reimbursement Scheme According to Rep. Buchanan's former partner in HNJ, Sam Kazran, as well as several other former employees of Rep. Buchanan's dealerships, partners and employees who made contributions to Rep. Buchanan's congressional campaigns were reimbursed with corporate
I Republican Seeks Seat, Bradenton Herald, June 29, 2005 (attached as Exhibit A); Vernon G. Buchanan, Personal Financial Disclosure Statement for January 1. 2004-ApriI30, 2006, filed May 12,2006 (excerpts attached as Exhibit B).
1400 Eye Street, N.w., Suite 450, Washington, D.C. 20005
James W. McJunkin August 24, 2011 Page 2 funds. Mr. Kazran claimed Rep. Buchanan personally instructed him to engage in the reimbursement scheme at HNJ and another dealership.' In a sworn deposition to the FEC, Mr. Kazran explained that in July 2005 - around the time Rep. Buchanan launched his campaign for Congress - Rep. Buchanan asked him to contribute to the Buchanan campaign," and he contributed the maximum permitted by law.' Subsequently, Rep. Buchanan pressured Mr. Kazran to raise more money for the campaign." When Mr. Kazran said he did not have the money to do so, Rep. Buchanan responded: "Well, don't you have somebody at the dealership you can trust? Just run it through the corporation."? Mr. Kazran believed Rep. Buchanan was instructing him "to have someone write the check personally and then give them back the money through the corporation." Mr. Kazran noted another HNJ executive, Josh Farid, was with him when Rep. Buchanan discussed this
Federal Election Commission, Confidential Investigative Deposition of Sam Kazran, November 6,2009 ("Kazran Deposition") (attached as Exhibit C).
Kazran Deposition, pp. 7-8.
5 Id., pp. 11-12; see also Vern Buchanan for Congress, FEC Form 3, October Quarterly Report, October 14,2005 (listing Mr. Kazran's contributions under the spelling "Sam Khazrwan") (excerpts attached as Exhibit D).
Kazran Deposition, p. 13. Mr. Kazran suggested Rep. Buchanan told Mr. Kazran he would consider taking less money for a buyout ifMr. Kazran raised $25,000 or $50,000 within several days. Id., pp. 13,35.
Id., p. 13. Mr. Kazran recounted Rep. Buchanan's instructions to find people he could trust and run their reimbursements through the corporation several times in his deposition. See id., p. 21 ("I instructed [employees] to write a check and reimburse themselves for [it] - because Mr. Buchanan had asked me to get money. And he specifically told me get someone you trust and run it though the corporation."); id., p. 32 ("And he said to me, he says, Get somebody you trust and get the money out of the corporation."); id. ("He had asked me to get money, I told him, I said, I thought you said I'm maxed out? I've already given you that money. And he said, Well, just get somebody you trust and run it through the corporation."); id., p. 36 ("And when I told him that I don't have it, he says, Well, get somebody you trust and run it through the corporation."); id., p. 37 ("And I said, You already told me I can't give any money. He says, Don't you have somebody, like your brother or someone you trust that you can get to write a check for me? ... Run it through the corporation.").
Kazran Deposition, p. 14. See also, id., p. 37 ("So my understanding was: Get someone you can trust, have them write a personal check and reimburse them.").
James W. Mcjunkin August 24, 2011 Page 3 reimbursement scheme." Mr. Farid has confirmed Mr. Kazran's account, recounting that Rep. Buchanan was "talking to [Mr. Kazran] about raising money and the campaign contributions," and told him "'You can get that money reimbursed through the dealership. ",10 Another HNJ employee similarly asserted Rep. Buchanan knew about the contribution reimbursements. II Mr. Kazran testified further he was "very confident" Rep. Buchanan also told his other partners to engage in reimbursement schemes, and personally observed one conversation in which Rep. Buchanan did SO.12 According to Mr. Kazran, at one partnership meeting Rep. Buchanan approached his company's chief operating officer, Dennis Slater, and told him "I haven't gotten your check yet.?" When Mr. Slater responded he was "hoping to take a pass," Rep. Buchanan said, "Don't worry. You know you're going to get it back.?" Two former Venice Nissan Dodge employees described the reimbursement scheme at that dealership in sworn affidavits. Carlo A. Bell, Venice Nissan Dodge's former finance director, stated that on September 15,2005, the dealership's general manager, Don Caldwell, told him and two other employees they needed to contribute to Rep. Buchanan's campaign, and explained the dealership would give them $1,000 in cash in exchange for writing $1,000 checks to the campaign." Mr. Bell asked if this was legal, but rather than answering, Mr. Caldwell instead asked if Mr. Bell was on the team or not. 16 Afraid he might lose his job, Mr. Bell agreed to write the check, as did the other two employees in the meeting." Mr. Bell later learned two more
Id., pp. 13, 32.
Chamlee, More Former Buchanan Employees Speak Out About Pressure To Donate, Reimbursement Scheme, Florida Independent, August 5, 2011 (attached as Exhibit E).
Deposition, p. 14.
13Id., pp. 14-15.
Id., p. 15. See also id., pp. 31.
15 FEC Complaint filed by Citizens for Responsibility and Ethics in Washington, Carlo Bell and David Padilla, Affidavit of Carlo A. Bell, filed August 19, 2008 (complaint and exhibits attached as Exhibit F).
James W. Mcjunkin August 24,2011 Page 4 dealership employees also received $1,000 cash reimbursements when they agreed to write checks to the Buchanan campaign." Mr. Bell's account of the reimbursement scheme was confirmed in an affidavit signed by David 1. Padilla, a Venice Nissan Dodge finance manager." In September 2005, Mr. Padilla was approached by Brad Combs, another finance manager, who told him "Mr. Buchanan needed campaign contributions and that anyone who made a contribution would get his money back plus additional compensation.t'" When Mr. Padilla refused to participate in the reimbursement scheme, Mr. Combs told him "that all of the managers were being asked to contribute and that many were planning to accept reimbursements in exchange for contributions.'?' Separately, Joseph Kezer, the former finance director of Sarasota Ford, described the reimbursement scheme at that dealership. Mr. Kezer personally observed campaign finance violations before Rep. Buchanan's 2006 general election and stated some of the $8 million spent by the Buchanan campaign in 2006 was "laundered corporate cash funneled through higher-ups at Buchanan's numerous dealerships.?" Mr. Kezer said he "fielded phone calls from other dealership executives wanting to know whether company reimbursement checks they had cashed put them in legal peril. ,,23 Pressure to Sign False Affidavit Mr. Karzan said he had a "great relationship" with Rep. Buchanan until June 2008, when he discovered Rep. Buchanan "had taken some $800-or-so thousand out of the company without my consent.?" In September 2008, this and related disputes resulted in litigation between Rep.
FEC Complaint filed by Citizens for Responsibility and Ethics in Washington, Carlo Bell and David Padilla, Affidavit of David Padilla.
Matthew Murray, Buchanan Faces Another Lawsuit, Roll Call, June 2, 2008 (attached as Exhibit G).
Id., p. 34.
James W. McJunkin August 24, 2011 Page 5 Buchanan, Mr. Kazran, and their companies." According to Mr. Kazran, during the course of this dispute Rep. Buchanan agreed to pay Mr. Kazran $2.9 million for the damage to the company caused by the alleged embezzlement and to buyout Mr. Kazran's share ofa Kia dealership they were in the process of'buying." Rep. Buchanan sent Mr. Kazran a "Confidential Settlement Communication," signed by Rep. Buchanan and his company's chief executive officer, John Tosch, laying out the terms of the settlement." The exact date Rep. Buchanan sent the settlement communication to Mr. Kazran is unclear, but an exhibit attached to it was dated October 2008.28 One term of the agreement was that Mr. Kazran would execute an attached affidavit attesting - under penalty of perjury - that Rep. Buchanan had no involvement in or knowledge of the contribution scheme." The affidavit provides that during "somewhat hostile" negotiations between Mr. Kazran and Rep. Buchanan's representatives, Mr. Kazran told one of Rep. Buchanan's representatives one or more of the dealerships of which Mr. Kazran had operational control reimbursed individuals for contributions to the Buchanan campaign." The affidavit states: 5. Before September, 2008 neither I, nor to my knowledge, any other person who had ever advised Buchanan or any of his representatives had any information that one or both of the dealerships [of which Mr. Kazran was the person in charge] reimbursed certain individuals for contributions made to the Vernon G. Buchanan for Congress campaign.
25 Rep. Buchanan Sues Ex-Partner, Sarasota Herald-Tribune, September 26,2008 (attached as Exhibit H). 26
Kazran Deposition, p. 55.
Id, pp. 55-56.
FEC v. 11-2001 LLC and Sam Kazran, No. 3:10-CV-1155-G-99 TGC-JRK, Affidavit of Sam Kazran alk/a Sam Khazrwan, attached as Exhibit 2 to Defendants Response to Plaintiffs Complaint and Request for Leave to Join the Proper Parties in this Action (M.D. Fla. 2010) ("Unsigned Kazran Affidavit") (attached as Exhibit I).
Unsigned Kazran Affidavit; Kazran Deposition, p. 59 ("This is the affidavit Mr. Buchanan wanted me to sign, and it was going to be a condition of this contract ... ").
Unsigned Kazran Affidavit ~ 4.
James W. Mcjunkin August 24, 2011 Page 6 6. Since my relationship with Buchanan first commenced, I attended various meetings of other general managers or "partners" of Buchanan who were involved in other dealerships in which Buchanan, or companies controlled by him, had a direct or indirect ownership interest. At no time was there any statement or any form of encouragement to make a campaign contribution based upon a threat of job discrimination, financial reprisal, or other detriment for failure to make a contribution discussed, disseminated or suggested by Buchanan, a Buchanan representative or anyone under his or their direction. Furthermore, there never was a discussion, statement or other action which would have implied that a person who made a contribution to the Vernon G. Buchanan for Congress campaign would be reimbursed by someone or would receive a special benefit. No one has advised me that Buchanan or any representative of his knew of any intention, plan or arrangement by anyone to make a reimbursement, directly or indirectly, to a person in exchange for making a contribution to the Buchanan for Congress campaign."
Finally, the affidavit provides that Mr. Kazran "consent[s] to Buchanan filing this Affidavit with the Federal Election Commission and using information contained herein in connection with campaign for re-election matters.t'" In his sworn deposition testimony, Mr. Kazran said the affidavit was "absolutely incorrect" in stating Rep. Buchanan "had no idea about [the campaign contributions] and that I'm the one who did all ofit.,,33 Mr. Kazran explained that paragraph 5, asserting none of Rep. Buchanan's advisors or representatives had any knowledge of the reimbursement scheme before
Id. ~~ 5-7. Id. ~ 8.
33Kazran Deposition, p. 60. See also id., p. 67 ("And he tried to make it sound like he had nothing to do with this. This is far from the truth.").
James W. McJunkin August 24, 2011 Page 7 September 2008, was "an absolute lie.'?" Mr. Kazran added he was surprised Rep. Buchanan included this statement in the affidavit because Mr. Farid and another HNJ employee heard Rep. Buchanan discuss it the scheme with Mr. Kazran, and "[a]ll these partners know.?" Reminded that he was under oath, Mr. Kazran confirmed Rep. Buchanan was aware of the reimbursed contributions." Mr. Kazran testified further that after he received the settlement communication, Rep. Buchanan asked him to come to Sarasota, Florida for a meeting." Rep. Buchanan told Mr. Kazran in the meeting he wanted Mr. Kazran to sign the affidavit, and said it was a condition of the agreement." Mr. Kazran refused, telling Rep. Buchanan he "couldn't be lying.?" According to Mr. Kazran, Rep. Buchanan initially said "okay, no problem," but then asserted Mr. Kazran did not want Rep. Buchanan to be against him because he was going to be governor." In addition, Mr. Tosch called Mr. Kazran the following day and told Mr. Kazran he had "five minutes to sign this document or the deal is off"'" Mr. Kazran said he was "desperate" to sign the agreement because he was "very, very much in the need of the money" and it "would have saved my company.?" Nevertheless, unwilling to lie, Mr. Kazran refused to sign the affidavit." Federal Election Commission Proceedings CREW, Mr. Bell, and Mr. Padilla filed an FEC complaint against Rep. Buchanan on August 19,2008 - one to two months before Rep. Buchanan sent Mr. Kazran the settlement
Id., p. 70.
35Id. 36Id., p. 71.
Kazran Deposition, pp. 60, 62.
Id., p. 62.
40 Id.; see also id., p. 65 ("He doesn't come out and say, I'm going to get you, but he makes comments., Look I'm going to be governor some day, You want me to be on your side.").
Kazran Deposition, pp. 60, 62.
Id., pp. 57, 60. Id., pp. 60-62.
James W. Mcjunkin August 24, 2011 Page 8 communication - based on the allegations regarding Venice Nissan Dodge and Sarasota Ford.44 The FEC began an investigation, which expanded to include at least the reimbursement scheme at HNJ.45 On April 16, 2010, the FEC found reason to believe Rep. Buchanan violated campaign finance laws banning contributions in the name of another and accepting prohibited contributions as a result of the reimbursement scheme at HNJ.46 Despite the evidence Rep. Buchanan was involved directly in the scheme, the FEC decided on February 1,2011 to take no further action against him." The FEC, however, sued Mr. Kazran on December 17, 2010 for his role in the reimbursement scheme." Violations Witness Tampering As you know, 18 U.S.C. § 1512 prohibits tampering with a witness in any official proceeding. Specifically, anyone who "knowingly uses intimidation, threatens, or corruptly persuades another person, or attempts to do so, or engages in misleading conduct toward another person, with in intent to ... influence, delay, or prevent the testimony of any person in an official proceeding," violates the statute." In addition, anyone who "corruptly ... otherwise obstructs, influences, or impedes any official proceeding, or attempts to do so," violates the statute." An "official proceeding" includes a proceeding before a federal government agency that is
44 FEC Complaint filed by Citizens for Responsibility and Ethics in Washington, Carlo Bell and David Padilla, Affidavit of Carlo A. Bell, filed August 19,2008.
Federal Election Commission v. Kazran, No. 3:10-cv-1155-J-RBD-JRK, Declaration of Mark R. Allen in Support of Partial Motion for Summary Judgment (M.D. Fla.) (attached as Exhibit J).
46 Federal Election Commission, MUR No. 6054, Letter from FEC to Christoper DeLacy, counsel to Rep. Buchanan, February 7, 2011 (attached as Exhibit K).
47 Id. The FEC also decided to take no further action regarding the other allegations in the complaint, presumably the allegations of a reimbursement scheme at Venice Nissan Dodge and Sarasota Ford. Federal Election Commission, MUR No. 6054, Letter from FEC to Christoper DeLacy, counsel to Rep. Buchanan, March 1,2011 (attached as Exhibit L). The FEC has not released a statement of reasons explaining its actions.
Federal Election Commission v. Kazran, No. 3:10-cv-1155-J-RBD-JRK 18 U.S.C. § 1512(b)(1). 18 U.S.C. § 1512(c)(2).
James W. Mcjunkin August 24, 2011 Page 9 authorized by law, such as the FEC.5) The proceeding does not need to be pending or about to be instituted at the time of the offense." Violations are subject to up to 20 years imprisonment and
Rep. Buchanan appears to have attempted to corruptly persuade Mr. Kazran to sign a false affidavit with the intent to influence Mr. Kazran's testimony in the FEC investigation of the reimbursement scheme. First, there is substantial evidence the affidavit was false. Foremost, Mr. Kazran's testimony directly contradicts the affidavit's statement that neither Rep. Buchanan nor any of his representatives knew of any intention, plan, or arrangement to reimburse anyone in exchange for making a contribution to the Buchanan campaign. 54 Mr. Kazran testified repeatedly Rep. Buchanan instructed Mr. Kazran to find someone he could trust and run their contributions through the dealership corporation, and Mr. Farid and another HNJ employee confirmed Mr. Kazran's account. Mr. Kazran further testified he was very confident Rep. Buchanan told other partners to engage in similar reimbursement schemes, and personally witnessed Rep. Buchanan telling an executive not to worry about a contribution because he was going to get it back. Similarly, Mr. Kazran testified the affidavit's claim that none of Rep. Buchanan's advisors or representatives "had any information" that the dealerships for which Mr. Kazran was in charge reimbursed individuals for contributions before September 2008 was an "absolute lie." Again, Mr. Kazran testified he, Mr. Farid, and other partners knew about the reimbursement scheme long before September 2008. Mr. Kazran's testimony is corroborated strongly by the affidavits of Mr. Bell and Mr. Padilla, as well as the statements of other former dealership employees, such as Mr. Kezer. All of these employees alleged managers at several other dealerships were aware of, and participated in, the reimbursement scheme.
18 U.S.C. § 1515(a)(I)(C). 18 U.S.C. § 1512(f)(1). 18 U.S.C. § 1512(b).
Paragraph 7 of the unsigned affidavit would have had Mr. Kazran state "[n]o one has ever advised me" Rep. Buchanan or any of his representatives knew of the reimbursement scheme. This, however, is the fundamental equivalent of stating Rep. Buchanan and his representatives did not know about it. Mr. Kazran testified Rep. Buchanan himself discussed reimbursements with Mr. Kazran, in effect advising Mr. Kazran that Rep. Buchanan knew.
James W. McJunkin August 24, 2011 Page 10 Second, Rep. Buchanan corruptly tried to persuade Mr. Kazran to sign the false affidavit. Rep. Buchanan and the settlement communication made clear settlement of the dispute between them - a settlement in which Rep. Buchanan would have paid Mr. Kazran $2.9 million - was contingent on Mr. Kazran signing the affidavit. As Mr. Kazran testified, the settlement was essential to his business and he was desperate to sign it. Rep. Buchanan also told Mr. Kazran he did not want Rep. Buchanan against him because Rep. Buchanan was going to be governor some day, strongly suggesting Rep. Buchanan would have the power to harm Mr. Kazran. It appears, therefore, Rep. Buchanan tried to use the leverage of a prospective multi-million dollar settlement and future retaliation to corruptly persuade Mr. Kazran to sign a false affidavit. Finally, it is clear Rep. Buchanan attempted to influence Mr. Kazran's testimony in the FEC investigation, thereby obstructing it. CREW, Mr. Bell, and Mr. Padilla filed the FEC complaint alleging the reimbursement scheme on August 19, 2008, a month or two before Rep. Buchanan sent Mr. Kazran the settlement communication and tried to coerce him into signing the affidavit. Moreover, the affidavit drafted by Rep. Buchanan's attorney explicitly would have consented to Rep. Buchanan filing it with the FEC. The obvious purpose of Rep. Buchanan's efforts were to influence Mr. Kazran's testimony before the FEC, and lead investigators to believe Rep. Buchanan had no knowledge of, or involvement in, the reimbursement scheme. Obstruction of Agency Proceedings 18 U.S.C. § 1505 prohibits obstruction of agency proceedings. Specifically, anyone who "corruptly, or by threats or force, or by any threatening letter or communication influences, obstructs, or impedes or endeavors to influence, obstruct, or impede the due and proper administration of the law under which any pending proceeding is being had before any department or agency of the United States," violates the law. 55 "Corruptly" under this statute means, among other things, "acting with an improper purpose, personally or by influencing another. ,,56 Endeavoring to suborn perjury and tamper with a witness is an obstruction under the statute and the parallel omnibus clause of the obstruction of justice statute." A proceeding is pending under the statute in a wide range of circumstances, including preliminary agency
5518 U.S.C. § 1505. 5618 U.S.C. § 1515(b).
57 United States v. Atlantic States Cast Iron Pipe Co., 2007 U.S. Dist. LEXIS 56562, at **251-292 (D.N.J. Aug. 2,2007) (convictions under the obstruction of agency proceedings statute, 18 U.S.C. § 1505, for instructing employees to lie to OSHA); United States v. Moody, 977 F.2d 1420, 1424 (l1th Cir. 1992) (conviction under the omnibus clause of the obstruction of justice statute, 18 U.S.C. § 1503, for endeavoring to induce witness to make false declarations and give perjured testimony by offering money and threatening witness's mother).
James W. Mcjunkin August 24, 2011 Page 11 investigations.
Violations of this statute are subject to up to five years imprisonment and a
Rep. Buchanan appears to have corruptly endeavored to suborn perjury by Mr. Kazran in the FEC investigation of the reimbursement scheme, thereby obstructing that investigation. Rep. Buchanan tried to induce Mr. Kazran to sign a false affidavit to which the penalties of perjury attached. By making the $2.9 million settlement contingent on Mr. Kazran signing the affidavit, Rep. Buchanan acted corruptly under the statute because he had the improper purpose of suborning perjury. The FEC proceeding clearly was pending: CREW, Mr. Bell, and Mr. Padilla had filed the complaint at least thirty days before Rep. Buchanan attempted to coerce Mr. Kazran into signing the false affidavit. Accordingly, Rep. Buchanan appears to have obstructed an agency proceeding. Bribery ora Witness Rep. Buchanan also may have violated the bribery statute, 18 U.S.C. § 201. The law prohibits, directly or indirectly, corruptly giving, offering, or promising anything of value to any witness at a "trial, hearing, or other proceeding, before any court, any committee of either House of Congress, or any agency, commission or officer authorized by the laws of the United States" with the intent to influence the witness's testimony." Rep. Buchanan appears to have attempted to bribe Mr. Kazran to provide a false affidavit, and therefore false testimony, to be used in an FEC proceeding. By making the $2.9 million settlement contingent on Mr. Kazran signing the affidavit, Rep. Buchanan acted corruptly with the intent to influence Mr. Kazran's sworn testimony. As noted above, the FEC proceeding clearly was pending: CREW, Mr. Bell, and Mr. Padilla had filed the complaint at least thirty days before Rep. Buchanan attempted to coerce Mr. Kazran into signing the false affidavit. Accordingly, Rep. Buchanan appears to have attempted to bribe a witness. Conclusion Faced with an investigation of a widespread illegal reimbursement scheme at his dealerships, Rep. Buchanan tried to insulate himself from the allegations by coercing one of his former partners into committing perjury. Rep. Buchanan's apparent conduct would establish a
See, e.g., United States v. Perraud, 672 F. Supp. 2d 1328, 1336-44 (S.D. Fla. 2009); United States v. Stickle, 355 F. Supp. 2d 1317, 1328 (S.D. Fla. 2004).
58 59 60
18 U.S.C. § 1505.
18 U.S.C. § 201 (b)(3).
James W. McJunkin August 24, 2011 Page 12 prima facie case that Rep. Buchanan attempted to tamper with a witness and obstruct an agency proceeding. As a result, CREW respectfully requests that the FBI immediately commence an investigation into this matter. SinCerel.~
Melanie Sloan Executive Director
EncIs. cc w/out attachments: Jack Smith, Chief, Public Integrity Section Omar Ashmawy, Staff Director and Chief Counsel, Office of Congressional Ethics Honorable Jo Bonner, Chairman, House Committee on Ethics Honorable Linda Sanchez, Ranking Member, House Committee on Ethics
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