Tennessee real estate mogul Franklin Haney’s $1 million donation to President Obama’s re-election Super PAC may draw increased scrutiny to Obama’s fundraising efforts, considering Haney’s well-documented record of scandals, fines, and indictments.
Haney donated $1 million to Obama’s Super PAC, Priorities USA, in May 2012, according to a database maintained by the Center for Responsive Politics.
Haney also donated the maximum $5,000 to Obama’s campaign this election cycle and $30,800 to the Democratic National Committee.
Haney called himself a "billionaire" in 2005.
But Haney’s past political activities may generate concern, as outlined in a November 2005 Washington Post profile of Haney.
Haney was indicted in 1999 on 42 counts of violating federal campaign law, the Post reported.
Haney was indicted in 1999 on federal charges that he illegally reimbursed friends, relatives and business associates for making more than $200,000 in contributions to the Clinton-Gore campaigns in 1992 and 1996, and to Tennessee members of Congress, thus evading the $1,000 limit on individual contributions.
Haney’s defense team did not dispute the charges, but argued that Haney "didn't realize federal law bans giving money to others to make the contributions."
Haney was acquitted on all 42 charges.
But his past legal troubles do not end there.
Haney was forced to pay $12.7 million in damages and $2 million in punitive fines for his role in a controversial bond sale in the early 1990s:
In the early 1990s, he bought a bankrupt Colorado residential development whose landowners had the authority to issue tax-exempt bonds. He turned his $130 million investment into bonds that resold for $148 million, the Denver Post reported. Then, through complex steps using several companies he created, Haney put the land up for sale, bought it back, and invested the proceeds in the Portals, an office complex in Southwest Washington that the FCC was scheduled to occupy.
The Smith Barney Managed Municipal Fund sued Harney for switching from treasury securities to lower quality federal bonds in the transaction, which Smith Barney claimed devalued the deal.
According to the Post feature:
A jury agreed and Haney was ordered to pay Smith Barney $12.7 million in damages and $2 million punitive fines. Haney paid the fine, but then negotiated a separate settlement, said D.C. lawyer Stan Brand, who represented Haney in a separate case.
Haney’s role in the Portals deal also prompted a Department of Justice investigation.
Haney paid $1 million to Peter Knight, chairman of the 1996 Clinton-Gore re-election campaign, for legal advice during the Portals controversy.
Even before his controversies during the Clinton administration, Haney had a controversial reputation in business circles.
In the 1970s, Haney "developed a reputation as one of the country’s most adept exploiters of tax-free bond financing," according to the Post.
In the 1980s, Haney "defaulted on more than $163 million in bonds."
Haney purchased a five-bedroom, ten-bath mansion in Manalapan, Florida in 2008 for $23.5 million.
He did not return a call for comment.
Published under: Barack Obama , Corruption , Democratic Donors , FEC , Obama Campaign