O'Donnell blames foes for funds allegations

[December 31, 2010]  WASHINGTON (AP) -- Former Senate candidate Christine O'Donnell went on the offensive Thursday following reports that federal prosecutors are looking into whether she illegally used campaign money for personal use, saying the accusations are politically motivated and stoked by disgruntled former campaign workers.

The Delaware Republican appeared on several network television morning shows to defend herself a day after The Associated Press revealed authorities have opened a criminal investigation to determine whether she broke the law by spending campaign money on personal expenses such as rent.

"There's been no impermissible use of campaign funds whatsoever," O'Donnell told ABC's "Good Morning America."

O'Donnell ticked off a long list of groups and individuals that she said could be behind the investigation: establishment Republicans, the Obama administration, and Vice President Joe Biden in particular; a nonpartisan watchdog group that she said had a liberal bent; and unhappy former campaign workers.

She said she believes the Democratic and Republican establishments are out to stop her.

"You have to look at this whole 'thug-politic' tactic for what it is," she said.

The AP reported Wednesday that a person familiar with the probe had confirmed the criminal investigation of O'Donnell. The person spoke on the condition of anonymity to protect the identity of a client who has been questioned as part of the probe. The case, which has been assigned to two federal prosecutors and two FBI agents in Delaware, has not been brought before a grand jury.

The federal investigation follows a complaint filed with the Federal Election Commission in September by Citizens for Responsibility and Ethics in Washington, a nonpartisan watchdog group that monitors ethics issues.

The complaint -- based in part on an affidavit from former O'Donnell campaign worker David Keegan -- alleges that she misspent more than $20,000 in campaign funds. The group also asked Delaware's federal prosecutor to investigate.

O'Donnell has acknowledged she paid part of her rent at times with campaign money, arguing that her house doubled as a campaign headquarters. FEC rules prohibit using campaign money for a candidate's mortgage or rent.

While the FEC frequently investigates and pursues civil cases involving election laws, criminal prosecutions against candidates for such violations are rare. Campaign finance experts say the distinguishing factor is intent.

"You have to have a knowing and willful violation," said Stan Brand, a veteran campaign finance attorney in Washington.

Craig Engle, another campaign finance attorney, said a criminal case might never materialize and said even criminal prosecutions typically result in financial penalties, not prison time -- although the law allows for a maximum penalty of five years in prison.

"The law is actually fairly clear," he said. "You cannot make any personal use of campaign contributions ... it even itemizes things that would be considered personal use."

O'Donnell, a tea party favorite, scored a surprise victory in the Delaware Senate Republican primary this year only to be beaten badly by Democrat Chris Coons in the general election.

Her latest campaign set a state record by raising more than $7.3 million, but she has been dogged by questions about her personal and campaign finances, in part because she has run for the Senate three times since 2006 without a full-time job and with little outside income.

The two former campaign workers -- Keegan and Kristin Murray -- have alleged that she routinely used political contributions to pay personal expenses such as meals, gas and rent. She also has faced a tax lien, a bankruptcy proceeding and a lawsuit from the university she attended over unpaid bills.

On Thursday, she told NBC's "Today Show" that Keegan and Murray were disgruntled former employees who worked only briefly with her campaign, saying Murray was fired for incompetence.

Keegan and Murray could not be reached Thursday.

O'Donnell called it suspicious that authorities hadn't informed her of the investigation, and she suggested the case is part of a plot by the Democratic and Republican political establishments to destroy her career. State and national Republican party organizations opposed her outsider campaign during her primary against Republican Rep. Mike Castle.

She also criticized CREW, the group that filed the complaint, as liberal and noted that it is run by Melanie Sloan, a former prosecutor who worked under Biden as a lawyer for the Senate Judiciary Committee in the early 1990s.

The vice president's office has declined to comment.

Sloan dismissed the criticism, emphasizing that the allegations originated with conservatives who worked for O'Donnell.

"I don't see how anybody can say that those people are part of the liberal machine," Sloan said. "Whatever Ms. O'Donnell and her lawyers want to say, there is ample evidence that she was using campaign funds for personal use, and that's a crime."

O'Donnell has a lot at stake in the outcome of the federal probe, having became a national figure during the most recent campaign.

While social conservatives cheered her upset primary victory, she was mocked by late-night talk show hosts and "Saturday Night Live" for a series of controversial statements, including that she had dabbled in witchcraft when she was young.

But O'Donnell made clear after her loss that she was not leaving the public arena. She announced earlier this month that she had signed a deal to write a book about her 2010 campaign and the political process, with publication expected this summer. She also is forming a political action committee that would allow her to continue raising money and support like-minded candidates and causes.

[Associated Press; By BEN EVANS]

Associated Press writers Matthew Barakat in McLean, Va., and Ben Nuckols in Baltimore contributed to this story.

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