MR. ZEIDENBERG: LADIES AND GENTLEMEN, IN AUGUST OF 2000 HILLARY CLINTON'S CAMPAIGN FOR THE UNITED STATES SENATE IN NEW YORK WAS ENTERING THE STRETCH RUN. SHE WAS UP AGAINST A WELL-FINANCED CHALLENGER. THE POLES WERE TIGHT. MONEY WAS TIGHT. RUNNING FOR THE UNITED STATES SENATE IN THE UNITED STATES IS A VERY EXPENSIVE PROPOSITION. CAMPAIGNING IN A LARGE, EXPENSIVE MEDIA STATE LIKE NEW YORK IS PARTICULARLY EXPENSIVE. THE RESPONSIBILITY FOR RAISING MONEY FOR HILLARY CLINTON'S CAMPAIGN FELL TO THIS MAN SEATED AT COUNSEL TABLE. HIS NAME IS DAVID ROSEN.
DAVID ROSEN WAS NATIONAL FINANCE DIRECTOR FOR HILLARY CLINTON'S SENATE CAMPAIGN. HE ALSO WORKED FOR AN ORGANIZATION CALLED NEW YORK SENATE 2000. NEW YORK SENATE 2000 WAS A JOINT FUNDRAISING COMMITTEE MADE UP OF THE HILLARY CLINTON CAMPAIGN, THE NEW YORK DEMOCRATIC PARTY COMMITTEE, AND A NATIONAL COMMITTEE OF DEMOCRATIC SENATORIAL CANDIDATES.
IT WAS DAVID ROSEN'S JOB TO RAISE THE MONEY FOR HILLARY CLINTON. BUT HIS JOB WAS MORE THAN JUST RAISING MONEY, BECAUSE AS NATIONAL FINANCE DIRECTOR, IT WAS HIS JOB TO NOT ONLY RAISE MONEY BUT TO KEEP TRACK OF THE MONEY THAT HE RAISED AND TO KEEP TRACK OF THE MONEY THAT WAS SPENT IN RAISING MONEY. AND TO TAKE THAT INFORMATION, THE AMOUNT OF MONEY RAISED, THE EXPENSES INCURRED IN RAISING THAT MONEY, AND TO CONVEY THAT INFORMATION TRUTHFULLY AND ACCURATELY TO THE COMPLIANCE OFFICER WHO WORKED FOR THE CAMPAIGN.
THAT COMPLIANCE OFFICER, THE EVIDENCE WILL SHOW, AND DAVID ROSEN KNEW, WOULD THEN CONVEY THE INFORMATION THAT DAVID ROSEN GAVE HER TO THE FEDERAL ELECTION COMMISSION. ONCE THE FEDERAL ELECTION COMMISSION RECEIVED THAT INFORMATION, THEY WOULD POST IT, MAKE IT PUBLIC, SO THAT EVERYBODY COULD SEE WHO WAS DONATING AND HOW MUCH THEY WERE DONATING.
EARLY IN THE SUMMER OF 2000 DAVID ROSEN MET UP WITH AN EAGER AND WEALTHY CAMPAIGN -- WOULD-BE CAMPAIGN DONOR BY THE NAME OF PETER PAUL. PETER PAUL APPROACHED DAVID ROSEN AND TOLD HIM -- TOLD DAVID ROSEN THAT HE WOULD LIKE TO UNDERWRITE A HUGE CAMPAIGN EVENT FOR HILLARY CLINTON. HE PROPOSED THAT HE, PETER PAUL, WOULD UNDERWRITE THE EVENT.
NOW, YOU ARE GOING TO HEAR, LADIES AND GENTLEMEN, THAT THERE ARE TWO KINDS OF DONATIONS THAT CAN BE MADE TO CAMPAIGNS: CASH DONATIONS AND IN KIND DONATIONS. CASH DONATIONS ARE PRETTY SELF EXPLANATORY. IT'S WHEN SOMEONE WRITES A CHECK AND GIVES IT TO THE CAMPAIGN. IT HAS TO BE REPORTED TO THE FEDERAL ELECTION COMMISSION.
IN KIND DONATIONS ARE, AS YOU MIGHT IMAGINE BY THE NAME, ARE DONATIONS MADE IN LIEU OF MONEY, TYPICALLY BY A VENDOR, SO THAT IF A VENDOR WOULD LIKE TO DONATE TO THE CAMPAIGN -- A FLORIST, FOR EXAMPLE, RATHER THAN GIVING CASH, THE FLORIST MAY DECIDE THAT THEY'D LIKE TO GIVE A THOUSAND DOLLARS IN FLOWERS TO A PARTICULAR EVENT. PERFECTLY LEGAL, PERFECTLY APPROPRIATE. BUT THAT IN-KIND DONATION NEEDS TO BE REPORTED TO THE FEC, FEDERAL ELECTION COMMISSION, AS A DONATION.
WHAT PETER PAUL WAS SUGGESTING IS THAT HE WOULD MAKE A MASSIVE IN-KIND DONATION. RATHER THAN GIVE THE MONEY DIRECTLY TO HILLARY CLINTON'S CAMPAIGN, HE WOULD UNDERWRITE THE EVENT.
DAVID ROSEN AND PETER PAUL DECIDED THAT THIS EVENT WOULD TAKE PLACE IN LOS ANGELES ON AUGUST 12TH, 2000. IT WOULD COINCIDE WITH THE START OF THE DEMOCRATIC NATIONAL CONVENTION WHICH WAS HELD IN LOS ANGELES IN 2000. NOW, THEY WERE TALKING ABOUT THIS EVENT FOR ITS MAIN STAGES – STAGES IN JULY. THAT LEFT A LITTLE OVER FIVE WEEKS TO PLAN THIS ENTIRE EVENT. NOT MUCH TIME.
DAVID ROSEN LEFT HIS OFFICES IN NEW YORK AND MOVED TO LOS ANGELES FOR THE FOUR WEEKS PRECEDING THE EVENT SO THAT HE COULD SUPERVISE EVERY FACET OF THIS EVENT.
YOU WILL HEAR, LADIES AND GENTLEMEN, THAT THIS EVENT WAS HIS RESPONSIBILITY FROM START TO FINISH. HE WAS INVOLVED IN EVERY KEY DECISION THAT WAS MADE. EVERYTHING FROM THE DESIGN OF THE INVITATION TO THE SELECTION OF THE VENUE, TO WHO WAS SITTING NEXT TO WHOM, HE WAS IN ON THE DECISIONS.
NOW, YOU ARE GOING TO HEAR, LADIES AND GENTLEMEN, THAT WHEN DAVID ROSEN MOVED TO LOS ANGELES HE WORKED OUT OF THE OFFICES OF STAN LEE MEDIA. STAN LEE MEDIA WAS AN ORGANIZATION, A COMPANY THAT WAS STARTED BY PETER PAUL AND AN INDIVIDUAL BY THE NAME OF STAN LEE.
STAN LEE IS A LEGEND IN THE COMIC BOOK INDUSTRY. HE CREATED THE COMIC BOOK CHARACTER SPIDERMAN, AMONG MANY OTHERS.
AND STAN LEE AND PETER PAUL CAME UP WITH A COMPANY CALLED STAN LEE MEDIA, AND FOR A SHORT TIME, ANYWAY, IT WAS WORTH MILLIONS OF DOLLARS. IT WAS AN INTERNET COMPANY.
DAVID ROSEN WENT TO WORK IN THE OFFICES OF STAN LEE MEDIA. THAT WAS WHERE HE WORKED OUT OF WHILE HE WAS PLANNING THE EVENT. ALSO WORKING OUT OF THOSE OFFICES WAS AN ASSOCIATE OF PETER PAUL'S BY THE NAME OF AARON TONKEN. AARON TONKEN WAS AN INDIVIDUAL WHO WAS INVOLVED IN PUTTING ON CELEBRITY STUDDED CHARITY EVENTS. HE HAD A LOT OF CONTACTS IN THE ENTERTAINMENT INDUSTRY, AND IT WAS GOING TO FALL ON AARON TONKEN THE RESPONSIBILITY OF PROCURING THE TALENT THAT WAS GOING TO APPEAR AT THIS FUNDRAISING EVENT.
THE THREE PUT THEIR HEADS TOGETHER AND CAME UP WITH A CONCEPT FOR THIS EVENT, AND IT WAS GOING TO BE BILLED A HOLLYWOOD TRIBUTE OR GOODBYE TO PRESIDENT CLINTON. ITS PURPOSE, AS I SAID, WAS TO RAISE MONEY FOR HILARY CLINTON'S SENATE CAMPAIGN. IT WAS GOING TO BE A HUGE, STAR-STUDDED EVENT. THEY WERE GOING TO HAVE A COCKTAIL RECEPTION BEFOREHAND AND THEN A CONCERT, AND A CONCERT TO BE FOLLOWED BY A DINNER. THE TICKET PRICE WAS GOING TO BE A THOUSAND DOLLARS PER PERSON FOR THE CONCERT; $25,000 PER COUPLE FOR THE DINNER.
NOW, TO JUSTIFY THOSE KIND OF PRICES, THEY KNEW THEY HAD TO PUT ON A BIG EVENT, SOMETHING THAT WAS STAR-STUDDED, SOMETHING THAT WOULD ATTRACT THOSE HIGH ROLLING DONORS. SO THEY WENT OUT AND THEY HIRED A HOLLYWOOD PRODUCER, A MAN BY THE NAME OF GARY SMITH.
GARY SMITH IS A LEGEND IN THE HOLLYWOOD INDUSTRY, A LEGENDARY PRODUCER WHO FOR 40 YEAR HAS BEEN IN SHOW BUSINESS, AND OVER THAT TIME HAS WON 24 EMMY'S, PUTTING ON AWARD SHOWS LIKE THE EMMY AWARDS, THE GRAMMY AWARDS, THE TONY AWARDS. HE PUT ON THREE PRESIDENTIAL INAUGURALS, VARIOUS PRESIDENTIAL CONVENTIONS. HE WAS A PRO'S PRO.
BUT ONE THING GARY SMITH WASN'T WAS CHEAP. IF HE WAS GOING TO DO THIS EVENT, IT WAS GOING TO BE DONE WITH "A" LIST TALENT, AND IT WAS GOING TO BE DONE FIRST CLASS ALL THE WAY.
AND SO THIS WAS THE FIRST THING THEY DID IS THEY HAD TO SELECT A VENUE THAT WAS APPROPRIATE. THEY FOUND A RANCH IN LOS ANGELES FORMERLY OWNED BY ACTOR ROBERT TAYLOR, A 112 ACRE OASIS IN LOS ANGELES AT THE END OF MANDEVILLE CANYON. A GORGEOUS PIECE OF PROPERTY. THE ONLY PROBLEM IS THAT IT WAS ISOLATED, AND IT WAS BASICALLY JUST A PRIVATE RESIDENCE ON A BEAUTIFUL PIECE OF LAND. THERE WAS NO STAGE THERE. THERE WAS NO -- NOTHING PRE MADE FOR AN EVENT FOR A THOUSAND PEOPLE AND A CONCERT. EVERYTHING THAT THEY WANTED TO PUT ON HAD TO BE BUILT ON THE SITE OR BROUGHT IN AND TRUCKED IN: THE STAGE, THE LIGHTING, THE CAMERAS, EVERYTHING. OBVIOUSLY, THIS ADDED TO THE COST.
THEY DECIDED THAT THEY WERE GOING TO GET, AS I SAID, "A" LIST TALENT. CHER WAS GOING TO PERFORM, TONI BRAXTON, MELISSA ETHRIDGE, MICHAEL BOLTON, DIANA ROSS. WOLFGANG PUCK WAS THE CATERER. JOHN TRAVOLTA AND KELLY PRESTON, JENNIFER ANNISTON AND BRAD PITT, MUHAMMAD ALI WERE INVITEES.
NOW, WHILE THE TALENT, WHEN THEY WERE PROCURED AND CAME TO PLAY, SAID THEY WOULD PLAY FOR FREE, THERE WERE A LOT OF COSTS ASSOCIATED WITH IT BECAUSE ALTHOUGH THEY DIDN'T REQUIRE A FEE FOR PERFORMING, ALL OF THEIR EXPENSES ASSOCIATED WITH COMING AND STAYING IN LOS ANGELES DID HAVE TO BE PAID.
AND YOU ARE GOING TO HEAR, LADIES AND GENTLEMEN, THAT THESE PERFORMERS DIDN'T COME TO LA BY BUS. THEY REQUIRED, MANY OF THEM, PRIVATE JETS. CHER REQUIRED HER OWN PARTICULAR PRIVATE JET, SPECIFYING EXACTLY THE MODEL AND TYPE SHE WANTED.
OTHER PERFORMERS WERE ABLE TO BE SATISFIED SIMPLY BY GIVING THEM FIRST CLASS AIRFARE, NOT ONLY FOR THEM BUT FOR THEIR ENTOURAGE. THEIR HAIRDRESSERS, THEIR MAKEUP ARTIST, THEIR BAND, AND THE COSTS ASSOCIATED WITH THAT BEGAN TO MOUNT.
YOU WILL HEAR, LADIES AND GENTLEMEN, THAT THE COST ASSOCIATED JUST WITH BRINGING IN THE TALENT WAS $90,000; FOR BUILDING A STAGE, OVER $50,000. THE INVITATIONS -- 30,000 INVITATIONS PRINTED, EVEN THOUGH ONLY 15,000 WERE SENT OUT, $90,000. YOU WILL HEAR THAT THERE WERE GIFT BAGS GIVEN AWAY FOR ALL THE GUESTS AND THEY HAD CD'S OF ALL THE PERFORMERS THAT PERFORMED AT THE CONCERT. THAT'S SEVEN CD'S, A THOUSAND GUESTS, 7,000 THOUSAND CD'S COST $50,000.
SOMEONE CAME UP WITH THE IDEA TO GIVE AWAY THE CHAIRS AS SOUVENIRS. YOU WILL HEAR THAT EVERYONE HAD A DIRECTOR'S CHAIR WITH A STENCIL ON THE BACK COMMEMORATING THE EVENT. WHY DON'T WE GIVE AWAY THE CHAIRS? THAT WILL BE A NICE TOUCH. THEY GAVE AWAY $35,000 WORTH OF CHAIRS.
NOW, AS THESE COSTS BEGAN TO MOUNT, THIS MAN, DAVID ROSEN, BEGAN TO PANIC. THE PURPOSE OF THIS EVENT, LADIES AND GENTLEMEN, WAS NOT TO THROW A BIG PARTY. THE PURPOSE OF THE EVENT WAS TO RAISE MONEY FOR HILLARY CLINTON'S SENATE CAMPAIGN; AND THE HIGHER YOUR COSTS GO, THE HARDER IT IS TO NET AT THE END OF THE DAY MONEY FOR THE CAMPAIGN. AND THE COSTS BEGAN TO SPIRAL OUT OF CONTROL.
DAVID ROSEN'S EVENT -- LAST EVENT PRIOR TO THIS THAT HE HELD IN NEW YORK CITY HAD BEEN A COMPLETE FLOP. IT HAD LOST MONEY. HE WAS WORRIED WHAT WOULD HAPPEN IF HE SCREWED UP TWICE IN A ROW. HE TOLD A FRIEND THAT HE THOUGHT THIS WAS GOING TO BE A CAREER KILLER; THAT HE WOULD GET FIRED; THAT-THIS WAS POLITICAL SUICIDE.
YOU WILL HEAR THAT AS HE HEARD MORE AND MORE BAD NEWS ABOUT THE BUDGET, HE LITERALLY THREW UP HIS HANDS AND SAID HE DIDN'T WANT TO HEAR ANY MORE, DIDN'T WANT TO HEAR THE COSTS, AND DIDN'T WANT TO HEAR THOSE FIGURES REPEATED.
WHAT WAS HE GOING TO DO? THE PRESIDENT AND THE FIRST LADY HAD ALREADY COMMITTED TO ATTEND THIS EVENT. EVERYBODY KNEW ABOUT IT. IT WAS COINCIDING WITH THE START OF THE CONVENTION. HE CAME UP WITH WHAT HE THOUGHT WAS A SOLUTION. HE CAME UP WITH A DECISION TO DELIBERATELY LIE TO THE FEC BY UNDERREPORTING THE COSTS ASSOCIATED WITH THAT EVENT.
YOU WILL HEAR THAT BUDGETS WERE CREATED AS THIS EVENT PROGRESSED, AND THOSE BUDGETS WERE SENT TO THE COMPLIANCE OFFICER FROM HILLARY CLINTON'S CAMPAIGN. DAVID ROSEN HAD THE -- HAD HIS EVENT COORDINATOR SEND IN WHAT HE KNEW WERE FRAUDULENT BUDGETS TO THE COMPLIANCE OFFICER, WHO THEN FORWARDED THOSE FRAUDULENT DOCUMENTS TO THE FEC WHERE THEY WERE POSTED AND MADE PUBLIC.
NOW, DID HE KNOW -- DID DAVID ROSEN KNOW THE ABSOLUTE TRUE COST OF THAT EVENT? WELL, LADIES AND GENTLEMEN, IT'S HARD TO KNOW THE ABSOLUTE TRUE COST OF ANYTHING WHEN YOU LITERALLY COVER YOUR EARS AND RUN OUT OF THE ROOM AND SAY, I DON'T WANT TO HEAR ANY MORE OF THIS. IT'S HARD TO KNOW THE EXACT FIGURE. BUT THE EVIDENCE WILL SHOW, BEYOND A REASONABLE DOUBT THAT HE KNEW THE BUDGETS THAT HE SUBMITTED TO THE FEC, TO THE COMPLIANCE OFFICER, WERE COMPLETE LIES.
WHAT'S THAT EVIDENCE GOING TO BE? LADIES AND GENTLEMEN, YOU ARE GOING TO, HEAR THAT HE WORKED VERY CLOSELY WITH AN EVENT PLANNER, AND AS SHE CAME UP WITH THESE BUDGETS AND AS THESE COSTS THAT I DESCRIBED TO YOU BEGAN TO MOUNT, HE TOLD HER TO TAKE OFF ITEMS THAT APPEARED ON THAT BUDGET, ITEMS THAT HAD BEEN PAID ALREADY FOR PRODUCTS THAT HAD ALREADY BEEN DELIVERED. HE TOLD HER, TAKE THEM OFF; THE BUDGET IS TOO HIGH. AND SHE DID AS SHE WAS TOLD, AND THOSE FRAUDULENT BUDGETS WERE SENT IN LATER TO THE FEC.
YOU WILL HEAR THAT THE TRAVEL EXPENSES THAT I DESCRIBED TO YOU EARLIER FOR ALL OF THESE CELEBRITIES, THAT DAVID ROSEN WAS INVOLVED IN TRYING TO GET THEM JETS; THAT HE APPROACHED SEVERAL FRIENDS, ASKING THESE INDIVIDUALS IF THEY KNEW ANYONE WITH A PRIVATE JET TO HELP DEFRAY SOME OF THESE COSTS. HE KNEW EXACTLY THE PROBLEM WITH THESE – WITH GETTING IN THIS TALENT AND HOW EXPENSIVE IT WAS, AND YET NOT A SINGLE DIME ASSOCIATED WITH THOSE TRAVEL COSTS APPEAR ON THE FINAL BUDGETS.
YOU WILL HEAR THAT HE LIED DIRECTLY TO THE COMPLIANCE OFFICER FOR THE HILLARY CLINTON CAMPAIGN. AS THIS COMPLIANCE OFFICER HAD RECEIVED PRELIMINARY BUDGETS, SHE NOTICED THAT SOME LINE ITEMS, PARTICULARLY FOR TALENT AND ENTERTAINMENT, HAD GONE DOWN DRAMATICALLY, AND SHE ASKED DAVID ROSEN ABOUT IT. 0NOW, THIS IS JUST PRIOR TO THE EVENT. WHAT ABOUT THIS? HOW COME IT'S GETTING CHEAPER? DAVID ROSEN TOLD HER IT WAS GETTING CHEAPER BECAUSE CHER HAD BACKED OUT; CHER WAS NOT GOING TO PERFORM, SO SHE DIDN'T HAVE TO PAY ANY OF THOSE COSTS ASSOCIATED WITH BRINGING IN CHER AND HER BAND. WELL, LADIES AND GENTLEMEN, YOU ARE GOING TO SEE A VIDEOTAPE OF THAT CONCERT HELD AUGUST 12TH AND YOU ARE GOING TO SEE CHER, IN LIVING COLOR, DID TWO SONGS THAT NIGHT. DAVID ROSEN KNEW SHE WAS GOING TO BE THERE. HE KNEW SHE PLAYED THERE. BUT HE ALSO KNEW THAT COMPLIANCE OFFICER IN WASHINGTON DC WASN'T LIKELY TO BE AT THAT EVENT, AND HOW WOULD SHE EVER KNOW THE TRUTH?
YOU WILL HEAR, LADIES AND GENTLEMEN, THAT DAVID ROSEN INCURRED OVER $13,000 IN HOTEL BILLS IN THE WEEKS LEADING UP TO THE EVENT. IT'S EASY TO RACK UP $13,000 IN HOTEL BILLS WHEN YOU'RE STAYING IN HOTELS LIKE THE HERMITAGE AND THE BEVERLY HILLS HOTEL THAT CHARGE $300 TO $350 A NIGHT. HE INCURRED THOSE INITIALLY ON HIS OWN CREDIT CARD, NEVER REPORTED THOSE EXPENSES TO THE FEC AS HE WAS REQUIRED TO DO. LATER HE TRIED TO GET SOMEONE, ANYONE, TO PAY THEM OFF. AND YOU WILL HEAR HE APPROACHED MORE THAN ONE INDIVIDUAL TRYING TO GET THEM TO PAY OFF HIS BILLS. EVENTUALLY HE SETTLED ON AARON TONKEN. AND BY PESTERING HIM FOR LONG ENOUGH, AARON TONKEN FINALLY AGREED TO PAY OFF THAT HOTEL BILL.
IT'S LEGAL FOR A DONOR TO PAY OFF A HOTEL BILL, BUT IT HAS TO BE REPORTED TO THE FEDERAL ELECTION COMMISSION AS AN IN-KIND DONATION.
YOU WILL HEAR THAT THE WEEKS HE SPENT AT STAN LEE MEDIA IN THEIR OFFICE SPACE WAS NEVER REPORTED TO THE FEC. YOU WILL HEAR THOSE THOUSANDS AND THOUSANDS OF CD'S, 7,000 WHICH WERE GIVEN AWAY THE NIGHT OF THE GALA ON AUGUST 12TH, HAD BEEN STORED, STACKED UP IN DAVID ROSEN'S OFFICE IN HUNDREDS OF BOXES. HE KNEW THEY WERE THERE. HE KNEW THEY WERE GIVEN AWAY. NOT A SINGLE DIME OF EXPENSES RELATED TO THOSE CD'S AND GIFT BAGS PERTAINING TO THE MUSIC THAT WAS GIVEN AWAY SHOWS UP ON THE BUDGET. THE ONLY THING THAT SHOWS UP ON THE BUDGET IS A FEW THOUSAND DOLLARS FOR THE BAGS IN WHICH THOSE THOUSANDS AND THOUSANDS OF DOLLARS OF CD'S, $50,000 WORTH OF CD'S, WERE GIVEN AWAY.
NOW, AFTER -- STRIKE THAT. THE QUESTION WAS, HOW EGREGIOUS -- HOW EGREGIOUS WAS HIS UNDERREPORTING? YOU WILL HEAR, LADIES AND GENTLEMEN, THAT HE REPORTED -- DAVID ROSEN HAD BUDGETS REPORT THAT THE ACTUAL IN-KIND EXPENSES WERE $366,000. HE LATER AMENDED THAT REPORT, AND THAT REPORT WAS AMENDED TO READ 400,000 IN IN-KIND EXPENSES.
THE EVIDENCE WILL SHOW IN THIS CASE, BEYOND A REASONABLE DOUBT, THAT THE TRUE IN-KIND EXPENSES WAS $1.1 MILLION. HE UNDERREPORTED BY $700,000. IN OTHER WORDS, HE REPORTED JUST UNDER ONE-THIRD OF THE TRUE COST.
NOW, AFTER THE EVENT, LADIES AND GENTLEMEN, THE FBI BEGAN INVESTIGATING AND THEY BEGAN QUESTIONING PEOPLE. AND DAVID ROSEN HAD A CONVERSATION WITH A WITNESS, WHO YOU WILL HEAR FROM, AND HE TOLD THIS WITNESS THAT HE WASN'T WORRIED. HE SAID, IT'S THEIR WORD AGAINST OURS: PETER PAUL, AARON TONKEN. THEY ARE LIARS. NO ONE WILL BELIEVE THEM OVER ME. AND SO HE DECIDED TO RIDE IT OUT.
WHY DID HE DO IT? WELL, THE EVIDENCE WILL SHOW, LADIES AND GENTLEMEN, THAT THE REASON HE COMMITTED THIS CRIME, THE REASON HE UNDERREPORTED, WAS TWOFOLD. FIRST, HE KNEW THAT THERE WAS GOING TO BE OUTRAGE IN THE CAMPAIGN, IN THE HEADQUARTERS, OVER THE EXPENSES, HOW THEY'D GOTTEN SO OUT OF CONTROL.
YOU WILL SEE MEMOS THAT WERE FOUND IN DAVID ROSEN'S POSSESSION WRITTEN BY THE HEAD OF THE HILLARY CLINTON CAMPAIGN IN WHICH IT WAS MADE CLEAR THAT FUNDRAISERS WERE TO KEEP A LID ON EXPENSES; THAT THEY WEREN'T SUPPOSED TO USE THEIR CELL PHONES UNNECESSARILY; THAT THEY SHOULDN'T USE MESSENGER SERVICES WHEN THE MAIL WOULD DO. WHEN YOU'RE COUNTING PENNIES LIKE THAT AND SCRUTINIZING BUDGETS LIKE THAT, HOW ARE YOU GOING TO REACT WHEN YOU SEE THAT YOU HAVE OKAY'D $5,000 FOR PATTY LABELLE'S HAIRDRESSER OR $10,000 WORTH OF PAUL ANKA CD'S GIVEN AWAY ON A SINGLE NIGHT. DAVID ROSEN KNEW THAT PEOPLE WOULD BE EXTREMELY ALARMED AND UPSET AT THOSE KIND OF EXPENSES.
NOW, IT IS ENTIRELY TRUE, LADIES AND GENTLEMEN, THAT THESE EXPENSES WERE NOT BEING PAID DIRECTLY BY THE HILLARY CLINTON CAMPAIGN. THEY WERE NOT WRITING CHECKS FOR THESE ITEMS. AS I TOLD YOU AT THE OUTSET, THEY WERE ALL BEING IN-KINDED, IF YOU WILL, BY PETER PAUL. AND YOU MIGHT RIGHTLY ASK YOURSELVES, WHILE YOU ARE SITTING THERE, WHAT'S THE BIG DEAL IF PETER PAUL IS PAYING FOR ALL THIS STUFF? ISN'T IT FREE?
WELL, TO THE UNINFORMED, LADIES AND GENTLEMEN, THE ANSWER TO THAT QUESTION MIGHT SOUND LIKE YES, BUT THE EVIDENCE WILL SHOW THAT DAVID ROSEN WAS ANYTHING BUT UNINFORMED. YOU WILL HEAR, LADIES AND GENTLEMEN, THAT THERE ARE SOMETHING CALLED SOFT MONEY AND HARD MONEY, AND YOU WILL HEAR THAT IT IS MUCH EASIER TO RAISE SOFT MONEY THAN HARD MONEY. SOFT MONEY IS MONEY THAT CAN BE GIVEN WITHOUT LIMIT TO A CAMPAIGN FROM VARIOUS GROUPS, BUT IT CAN'T BE GIVEN-- STRIKE THAT. IT CAN BE GIVEN TO A JOINT FUNDRAISING COMMITTEE LIKE NEW YORK SENATE 2000. THAT CAN ONLY BE USED FOR CERTAIN PURPOSES. IT CAN BE USED FOR ISSUE ADVERTISING, FOR INSTANCE, AND FOR GETTING OUT THE VOTE. IT'S EASY TO RAISE -- RELATIVELY EASY TO RAISE SOFT MONEY, BECAUSE THERE AREN'T THE SAME LIMITS ON GIVING IT.
HARD MONEY IS WHAT THE CAMPAIGN WANTED AND NEEDED. HARD MONEY IS LIMITED IN HOW MUCH AN INDIVIDUAL CAN GIVE. AT THE TIME, IT WAS ONLY $1,000 PER ELECTION. ONE THOUSAND FOR THE PRIMARY; 1,000 FOR THE NATIONAL -- FOR THE FINAL ELECTION; TWO THOUSAND PER CYCLE.
SO IT'S MUCH HARDER TO RAISE HARD MONEY. THE BEAUTY OF THE HARD MONEY, THOUGH, ITS USE IS NOT RESTRICTED. HILLARY CLINTON'S CAMPAIGN COULD USE IT FOR ADVERTISING OF ANY TYPE THEY WANTED. THE TYPE WHERE A CANDIDATE CAN SAY, VOTE FOR ME OR VOTE AGAINST MY OPPONENT.
NOW, GETTING BACK TO THOSE HUGE IN-KIND DONATIONS THAT PETER PAUL WAS GIVING THAT SOUNDED LIKE FREE MONEY, IT'S NOT FREE MONEY, BECAUSE YOU WILL HEAR, LADIES AND GENTLEMEN, THAT UNDER THE LAW A CERTAIN PERCENTAGE OF MONEY FROM THAT HARD MONEY ACCOUNT NEEDS TO BE TRANSFERRED FROM THE HARD MONEY ACCOUNT TO THE SOFT MONEY ACCOUNT, DEPENDING ON THE SIZE AND AMOUNT OF THAT DONATION.
SO THAT $1.1 MILLION THAT PETER PAUL WAS GIVING, A CERTAIN PERCENTAGE OF THAT DAVID ROSEN KNEW WOULD HAVE TO BE -- HAVE TO BE TRANSFERRED FROM THE CAMPAIGN'S HARD MONEY ACCOUNT TO THE SOFT MONEY ACCOUNT. THE BIGGER THE IN-KIND DONATION, THE MORE MONEY THAT WOULD HAVE TO BE TRANSFERRED; THE SMALLER THE IN-KIND DONATION, THE LESS MONEY THAT WOULD HAVE TO BE TRANSFERRED. AND DAVID ROSEN KNEW THAT THERE WAS GOING TO BE A NEGATIVE IMPACT ON THAT HARD MONEY FUND BY TAKING A MASSIVE IN-KIND SOFT MONEY DONATION FROM PETER PAUL, SO HE WANTED THAT REPORT TO BE SMALLER.
NOW, LADIES AND GENTLEMEN, YOU WERE ASKED IN YOUR QUESTIONNAIRE A COUPLE QUESTIONS ABOUT SENATOR HILLARY CLINTON, AND, AS HIS HONOR TOLD YOU, THIS CASE HAS NOTHING TO DO WITH HILLARY CLINTON. IT IS ABOUT DAVID ROSEN. YOU WILL HEAR NO EVIDENCE THAT HILLARY CLINTON WAS INVOLVED IN THIS IN ANY WAY, SHAPE OR FORM. IN FACT, IT'S JUST THE OPPOSITE. THE EVIDENCE WILL SHOW THAT DAVID ROSEN WAS TRYING TO KEEP THIS INFORMATION FROM THE CAMPAIGN BECAUSE HE WAS AFRAID IF THEY FOUND OUT HOW MUCH HE HAD SPENT HE WOULD BE FIRED. SO WHATEVER YOUR FEELINGS ABOUT SENATOR CLINTON -- GOOD, BAD OR INDIFFERENT -- THEY HAVE NOTHING TO DO WITH THIS CASE.
THIS CASE IS ABOUT ONE QUESTION, AND ONE QUESTION ONLY: DID DAVID ROSEN DELIBERATELY CAUSE A FALSE FILING AND STATEMENT TO BE MADE TO THE FEDERAL ELECTION COMMISSION CONCERNING THE IN-KIND DONATIONS MADE TO THAT GALA ON AUGUST 12TH, 2000?
THE EVIDENCE IN THIS CASE WILL SHOW THE ANSWER TO THAT QUESTION IS YES, AND AT THE END OF THE CASE WE WILL ASK YOU TO RETURN A VERDICT THAT'S CONSISTENT WITH THAT FINDING.
THAT WOULD BE A VERDICT OF GUILTY.
THANK YOU.