The Minnesota Independent has recently learned that Minnesota Teen Challenge returned the donation to Bachmann two weeks later.

“We didn’t want to be involved if it was dirty money,” Rich Scherber, executive director of Minnesota Teen Challenge, told MnIndy.

Bachmann’s close ties to Vennes became public before the election, when it was revealed that she had written a letter requesting a presidential pardon for the convicted money-launderer and drug-smuggler. She withdrew the letter when Vennes’ name became connected to the Petters multi-billion-dollar Ponzi scheme scandal. But she gave back only a portion of the tens of thousands of dollars in campaign contributions she has received from Vennes and his family since 2005.

Scherber says that when Bachmann’s office made the donation, it explained the connection between the campaign’s charitable contribution to them and Vennes’ campaign contributions to Bachmann.

“Some way (the explanation) either came with the check or they notified us beforehand,” recalls Scherber. “At that time, we were just concerned — this whole story with Petters broke, and we were concerned about what Frank Vennes’ role was at this point.”

Scherber’s staff brought the matter to the organization’s chairman, and he brought it before the board.

“The board had decided they weren’t going to take the check,” Scherber continues. “They sat on it for two weeks and we just returned the check.”

Minnesota Teen Challenge also had close ties to Vennes, who had been one of the charity’s board members. Vennes also was involved in the nonprofit Fidelis Foundation, which has served as a fiscal agent for — and donated millions of dollars to — many evangelical ministries and other religious organizations, including Minnesota Teen Challenge.

Vennes is alleged to have been used by Petters to lure primarily Christian organizations into investing in Petters’ companies through Metro Gem — one of Vennes’ companies — or through the Fidelis Foundation. Among those investors was Minnesota Teen Challenge, which allegedly lost $5.7 million in investments in Petters companies.

According to Gary Hansen, Vennes’ court-appointed receiver, because the money was donated to Bachmann before Vennes’ assets were seized, it remains the congresswoman’s to do with as she pleases. If Bachmann had chosen to return the $9,200 to Vennes, Hansen notes, the money would be added to the rest of his seized assets, which are being sold off to compensate victims for his alleged involvement in the multibillion-dollar Petters Ponzi scheme.

Bachmann Chief of Staff Michelle Marston says the $9,200 will likely be donated to R3, a collaborative of Christian recovery groups that includes Minnesota Teen Challenge.

Bachmann delayed disclosure

Rep. Bachmann failed to report the money being returned to her campaign until her first quarter 2009 campaign filing, a possible violation of Federal Election Commission rules.

The $9,200 — the same amount Vennes and his wife had contributed to Bachmann’s campaign in 2008 — did not show up on Bachmann’s pre-election, post-election or year-end quarterly FEC filings. According to federal rules, the returned contribution should have shown up on one of these reports if it was returned to Bachmann’s campaign in October, as Scherber claims.

Bachmann’s first quarter report shows that the Minnesota Teen Challenge donation was returned to the campaign on Jan. 1, 2009.

“We reported it properly,” says Bachmann staffer Marston. “We reported it when it was received.” Marston confirmed that the contribution was received on Jan. 1, and she could not explain the discrepancy with Scherber’s claim that the funds were sent back in October.

The FEC prescribes financial penalties for “a failure to make the required disclosures … at the time and in the manner prescribed” or for “a failure to include any of the information required to be shown by such disclosures or to show the correct information.”

Less than two months after he was elected in 2002, Norm Coleman used the power of his yet-to-be-assumed U.S. Senate office to try to leverage a presidential pardon for convicted money launderer and Tom Petters associate Frank Vennes Jr. And two years after that, Coleman wrote yet another pardon plea on Vennes’ behalf.

Vennes, whose criminal record includes 1986 pleas of guilty and no contest to a set of charges involving money-laundering, drug and firearms charges, is currently implicated — though not yet charged — in the Tom Petters financial fraud scandal. As Jon Tevlin reported in the Star Tribune, Vennes’ home was raided by federal authorities on September 24, and “[a]ccording to a federal search warrant affidavit, Vennes was a facilitator who persuaded five major investors to invest $1.2 billion in companies controlled by Petters. The document says Vennes collected more than $28 million in commissions for his work.”

As previously reported at Minnesota Independent [1] [2] [3] [4], Minnesota Rep. Michele Bachmann wrote a letter in December 2007 advocating a presidential pardon for Vennes’ 1980s conviction, which she subsequently withdrew following public disclosure of Vennes’ alleged ties to Petters-related financial fraud. But a Freedom of Information Act request I sent to the federal Office of Pardon Attorney has turned up two pardon requests from Sen. Norm Coleman, and no sign that either request had been withdrawn.

In a letter dated December 20, 2002 and sent to “President George W. Bush c/o Karl Rove,” then-Senator-Elect Coleman said he was “well acquainted with Frank [redacted portion] and that I want to join “my friend, (former Minnesota GOP Chairman) Ron Eibensteiner and Governor-Elect Tim Pawlenty in urging President Bush to grant Frank Vennes a Presidential Pardon.” (The roles of Pawlenty and Eibensteiner in seeking a pardon for Vennes are unclear; my FOIA request did not turn up pardon letters from either of those men.)

Coleman sent a second letter [p1] [p2] on Vennes’ behalf to the Office of Pardon Attorney in December 2004.

Coleman, Pawlenty and Eibensteiner join Congresswoman Michele Bachmann in the growing list of Minnesota political figures with campaign finance ties to Vennes who have apparently interceded to seek a presidential pardon for him.

Vennes pleaded guilty and no contest to federal charges of money laundering, cocaine and firearms trafficking in 1987. Vennes served 38 months in federal prison in Sandstone, MN before being released on parole. Vennes spent the next several years sueing the federal government for more than $10 million, claiming that he was entrapped by federal agents even though he pleaded guilty and no contest to the charges, and that his attorney rendered him “ineffective assistance” in representing him. Vennes’ claims ultimately were rejected in 1994 following a series of appeals. In 1995, he started working with Tom Petters, where he reportedly earned more than 90 percent of his income, or about $38 million, over the next 14 years.

Coleman states in his 2002 letter that “Frank is indeed an example of successful rehabilitation.” He further states in his 2004 pardon letter that “I assure you that Mr. Vennes’ moral and ethical standards more than justify your consideration of his pardon application.”

However, Vennes has been implicated as a key figure in the massive $3 billion financial fraud investigation of Minnesota businessman Tom Petters. On Sept. 24, federal agents raided Vennes’ $5 million Shorewood home on Lake Minnetonka in connection with the Petters investigation and seized “boxes and buckets of silver and gold coins, trays of jewelry, five stacks of $100 bills, boxes of gem stones, silver plates and Rolex watches,” along with diamond rings and artwork. His $6 million oceanfront home in Jupiter, Fla., which was recently sold, was raided also and among the items seized was a briefcase containing “256 $20 gold pieces dated 1904, and eight uncirculated one-half dollar pieces.”

According to the federal search warrant, Vennes was alleged to have hauled in more than $28 million in commissions for his role in luring five investors to pony up $1.2 billion in Petters’ alleged giant Ponzi scheme. On Oct. 6, the assets and records of Vennes, Petters, Petters’ companies and other Petters associates were frozen by a federal judge.

Still, the multimillionaire Vennes has not yet been charged with any crimes in connection with the Petters case. Nor has he been named as a defendant in any of the lawsuits filed against Petters and his associates by alleged victims of the fraud.

Campaign finance ties

As with Bachmann, Vennes and his immediate family have contributed heavily to Norm Coleman’s campaigns directly or indirectly, Tim Pawlenty’s campaigns, and the Republican Party of Minnesota, which Eibensteiner chaired from 1999-2005.

Frank Vennes gave Coleman’s campaign committees $2,000 prior to Coleman’s pardon letter. However, he gave $8,000 to the Rally for Leadership Fund, which is controlled by Rep. John Kline, on July 19, 2002. A month later, the Rally for Leadership Fund kicked in $168,000 to Coleman’s campaign, and four months later, Senator-elect Coleman wrote his first pardon recommendation letter for Vennes.

Vennes also gave $5,000 in 2003 to Coleman’s North Star Leadership PAC, a political action committee controlled by Jeff Larson, Coleman’s Washington, DC, landlord and political consultant.

Vennes’ brother, Gregory, gave Coleman $1,000 in 2001.

Pawlenty has done quite well with the Vennes family. Kimberly Vennes (Frank’s wife), Gregory Vennes, Stephanie Vennes (Gregory’s wife), and Colby and Denley Vennes, who have shared an address with Frank and Kimberly, each donated $2,000 to the Pawlenty for Governor Committee in 2002. Frank, Kimberly, Gregory, Stephanie, Colby and Denley Vennes each contributed $250 to Pawlenty in 2004 and $2,000 apiece in 2006.

During Eibensteiner’s tenure as state GOP chair, Frank Vennes spread the wealth to state Republican Party committees. In 2002, he gave $10,750 to the House Republican Party of Minnesota Campaign Committee, and another $10,000 in 2003. Vennes was one of the top contributors—$5,000—to the Minnesotans for a Republican Congress Committee in 2002, whose sole recipient was the Republican Party of Minnesota (RPM). He gave another $5,000 directly to the RPM in 2002. After Eibensteiner was ousted in 2005, Vennes kept the checks coming: $10,000 to the RPM and $50,000 to the House Republican Party of Minnesota Committee in 2006.

The RPM also got $3,000 from Kimberly Vennes in 2002 and $1,500 from Colby Vennes in 2003.

Personal relationship with Vennes

Like Bachmann, Coleman spoke of his personal relationship with Vennes, wrote glowingly of his character and cited Vennes’ work with faith-based groups like Teen Challenge as evidence of his rehabilitation.

“I personally know Mr. Vennes and find him to be trustworthy, extremely dedicated to his community and compassionate about serving others less fortunate than himself, and a talented, successful businessman,” Coleman wrote in his 2004 letter. “Mr. Vennes’ faith is very real. In turn, he has used his faith and gifts to transform many of the lives in our community. I firmly believe he had earned the opportunity to be granted this pardon.”

Coleman notes that “Mr. Vennes is an active participant in a local prison ministry program and with a pardon, Mr. Vennes could continue this service to federal inmates.” Although Coleman does not identify the ministry, Vennes was treasurer for Charis Prison Ministry as recently as 2005.

A third individual—John D. Raffaelli, founder of Capitol Counsel, a leading Washington lobbying group—sent a letter of recommendation for a presidential pardon for Vennes to the Clinton White House in 2000.

“There are a number of unusual and questionable governmental actions surrounding the original conviction of Mr. Vennes,” Raffaelli wrote, which was during the period when Vennes was pursuing his appeals. “But more importantly, since his release from prison, he has been a model citizen and humanitarian. His story is very compelling.”

Even though Vennes has yet to be charged, Michele Bachmann withdrew her letter recommending him for a pardon and donated a portion of his campaign contributions to Teen Challenge as soon as Vennes’ name became publicly connected to the Petters scandal. Bachmann has refused to explain why she turned on Vennes when he is still presumed innocent.

It is not known whether Coleman intends to stand by Vennes until he’s charged. After the Petters scandal broke, Coleman donated $14,600 to the Boys and Girls Club in October, which represented the amount of money Tom Petters had donated to his campaign in this election cycle.

Bright side of "anti-American" dustup: It's a distraction from the other Bachmann controversy.

The fallout from her “Hardball” appearance may have grabbed all the headlines, but that’s hardly the only crisis that Michele Bachmann has been dealing with this month. There is also the matter of her ties to Frank Vennes Jr., the ex-con and Bachmann campaign contributor on whose behalf she wrote a letter requesting a presidential pardon.

After Vennes’ homes were raided in connection with the $3 billion dollar financial fraud investigation of local-boy-made-bad Tom Petters, Bachmann withdrew the pardon request. And, as Minnesota Independent reported previously, Bachmann tried to limit the damage further by donating to charity some campaign funds she had received from Vennes. (MnIndy’s past coverage of Bachmann’s ties to Vennes is here.)

But as it turns out, it appears that Bachmann donated the money to Minnesota Teen Challenge, a faith-based evangelical recovery program on whose board of directors Vennes served as recently as February 2008. Teen Challenge stands potentially to lose millions of dollars in investments that court documents allege Vennes helped steer to Petters’ companies.

Bachmann’s office told Minnesota Independent recently that she had given Vennes’ campaign contributions to charity on Oct. 2, but refused to specify the charity to which the funds had been given. A subsequent check of FEC records shows that Bachmann logged a contribution to Teen Challenge in the sum of $9,200 — the same amount as Vennes and his wife, Kimberly, donated to Bachmann’s campaign on June 30 — on Oct. 3.

Vennes’ contribution to Bachmann, in other words, seems essentially to have gone from the pocket of one Vennes pal to the pocket of another.

Bachmann’s gesture was hardly magnanimous. The $9,200 is only a portion of the $27,600 in total contributions Bachmann has received from the Vennes family since 2005. Frank’s brother and his wife, Greg and Stephanie Vennes, have donated another $8,400 to Bachmann since 2005. And Vennes’ personal lawyer, C. Craig Howse, who also is connected to Teen Challenge, has donated $5,000 to Bachmann’s campaign since 2007.

But the move opens a window into the extent of Bachmann’s ties to figures and groups enmeshed in the unfolding multibillion-dollar Petters financial fraud scandal.

Bachmann and Vennes

Bachmann’s political relationship with Vennes began in December 2005, when he and his wife, along with his brother and his brother’s wife, made their first donations to Bachmann’s congressional campaign–$4,200 apiece. It’s not clear when her personal relationship with Vennes began. However, Bachmann told WCCO’s Esme Murphy in an Oct. 19 interview that she met Vennes through Teen Challenge.

“Frank Vennes is an individual here in the Twin Cities who had a remarkable record of rehabilitation in his own life,” Bachmann told Murphy. “He was a person who put a lot of money in the community, Teen Challenge, for instance, which I believe very strongly in. It does a wonderful job taking people who are alcohol- or drug-addicted and trying to get them clean and sober.

“And I knew Frank Vennes through Teen Challenge and saw that he had made a remarkable transformation in his life, and he told me his goal was to give as much money as he could to charity so that more people could find freedom in their life. And I thought that was great, so I supported him.”

Vennes’ “remarkable transformation” came after his conviction in 1987 on federal charges of money laundering, cocaine distribution and illegal firearms sales, to which he pleaded guilty and no contest. The charges stemmed from an undercover operation in which Vennes and his co-defendants received $370,000 from federal agents and deposited the money in bank accounts in Switzerland, the Bahamas and the Isle of Man in a series of transactions. In the last transaction, Vennes personally delivered $100,000 to Switzerland, where his associates allegedly either lost or stole it.

Vennes was sentenced to five years in Sandstone (Minn.) Federal Correctional Facility, where he reportedly found God, and was released in 1990. Following his release from prison, Vennes filed a petition for a pardon.

Vennes also sued the federal government for more than $10 million, claiming that he was entrapped by federal agents even though he pleaded guilty and no contest to the charges, and that his attorney rendered him “ineffective assistance” in representing him. Among his claims, Vennes charged that the undercover agent for whom he had delivered and then lost $100,000 had revealed himself to be a member of the Chicago underworld and threatened to kill Vennes and his family if he didn’t come up with the lost 100 grand. Those threats prompted Vennes to begin illegally selling firearms and cocaine to federal agents, Vennes alleged.

Vennes’ claims ultimately were rejected in 1994 following a series of appeals. In 1995, he started working with Tom Petters, where he reportedly earned more than 90 percent of his income, or about $38 million, over the next 14 years.

Pardon me, Rep. Bachmann

Meanwhile, Vennes continued to press for his pardon. By 2001, he also began donating to political candidates and parties in earnest, including Norm Coleman, Mark Kennedy, Amy Klobuchar, the Minnesota House Republican Campaign Committee and Bachmann.

Following his and his wife’s initial $4,200 contribution to Bachmann in 2005, Vennes — who does not live in Bachmann’s congressional district — dumped another $10,000 into her campaign coffers in 2006. In December 2007, Bachmann used the power of her office to write a recommendation for a presidential pardon of Vennes.

“As a U.S. Representative, I am confident of Mr. Vennes’ successful rehabilitation and that a pardon will be good for the neediest of society,” Bachmann wrote to the U.S. Office of Pardon Attorney. “Mr. Vennes is seeking a pardon so that he may be further used to help others. As I know from personal experience, Mr. Vennes has used his business position and success to fund hundreds of nonprofit organizations dedicated to helping the neediest in our society.”

In addition, Bachmann noted that Vennes needed a pardon because he “still encounters the barriers of his past and especially in the area of finance loan documents.” Bachmann has refused to further explain the nature of her “personal experience” with Vennes or clarification of the finance loan documents to which she refers in her letter.

On June 30, 2008 — six months after Bachmann wrote her pardon recommendation for Vennes — he and his wife gave another $9,200 to Bachmann’s campaign.

Then, on Sept. 24, federal agents raided Vennes’ $5 million Shorewood home on Lake Minnetonka in connection with the Petters investigation and seized “boxes and buckets of silver and gold coins, trays of jewelry, five stacks of $100 bills, boxes of gem stones, silver plates and Rolex watches,” along with diamond rings and artwork. His $6 million oceanfront home in Jupiter, Fla., was raided also and among the items seized was a briefcase containing “256 $20 gold pieces dated 1904, and eight uncirculated one-half dollar pieces.”

According to the federal search warrant, Vennes was alleged to have hauled in more than $28 million in commissions for his role in luring five investors to pony up $1.2 billion in Petters’ alleged giant Ponzi scheme.

Eight days later, on Oct. 2, Bachmann withdrew her letter of recommendation for Vennes’ pardon.

“I had known Mr. Vennes for some time and was familiar with his good works with local charity organizations,” Bachmann wrote to the Office of Pardon Attorney. “Like so many others, I was under the impression that he had turned his life around and was seeking to do the right thing by those less fortunate. Regrettably, it now appears that I may have too hastily accepted his claims of redemption and I must withdraw my previous letter.”

Bachmann’s motives in withdrawing her recommendation of a pardon for Vennes before he has even been indicted — other than to distance herself from a convicted felon and heavy campaign contributor in an election year — are unclear. She has refused to respond to questions from Minnesota Independent regarding her actions.

However, she told WCCO’s Murphy that “when the Tom Petters affair came open and Frank may have had a part in that affair, it wasn’t appropriate for me to recommend a pardon anymore. And so my office issued a letter, and we pulled that pardon back, because we don’t know what the answers are right now about his involvement with Tom Petters.”

On Oct. 3, the day after Bachmann withdrew her pardon recommendation, she donated the sum of $9,200 to Minnesota Teen Challenge. Just days later, on Oct. 6, the assets and records of Vennes, Petters, Petters’ companies and other Petters associates were frozen by a federal judge.

Bachmann, Vennes and Teen Challenge

Bachmann has long been a supporter of Teen Challenge, which has a controversial history. She’s appearing next month at Recovery Celebration, a Teen-Challenge-sponsored event in St. Paul. Therapists from Bachmann’s husband Marcus’ Christian counseling clinic will be conducting workshops at the conference.

Frank Vennes is a former board member of Teen Challenge. He’s also involved in the nonprofit Fidelis Foundation, which has served as a fiscal agent for — and donated millions of dollars to — many evangelical ministries and other religious organizations, including Minnesota Teen Challenge.

The Fidelis Foundation, based in Plymouth, Minn., is a nonprofit organization “organized to assist Christians in discerning, clarifying and implementing God’s call and direction in their life,” according to the group’s tax filings. Its chairman is G. Craig Howse, Vennes’ personal lawyer, and the organization leases office space from Howse for $1,300 a month.

Bachmann cited Vennes’ work with Fidelis in her pardon recommendation letter:

“The Fidelis Foundation, backed by Mr. Vennes, has directed over $10.7 million in total gifts in the last three years, and the Fidelis Foundation has ranked #6, #9 and #7 as the largest grant-making foundation in Minnesota over the past three years.”

Some of the largest of those grants has gone to Teen Challenge or Minnesota Teen Challenge over the past three years, according to the foundation’s federal tax filings: $255,000 in 2006; $100,000 in 2005; $1 million in 2004 (Minnesota Teen Challenge); and $50,000 to Teen Challenge in 2004.

In all three tax filings, Teen Challenge’s relationship to Fidelis is listed as “None.” But based on legal documents and lawsuits filed in connection with the Petters investigation, it’s clear that Vennes was deeply involved with both the Fidelis Foundation and Teen Challenge. Indeed, Bachmann’s pardon recommendation letter states that Vennes has “backed” Fidelis. His personal attorney is the chairman of the Fidelis Foundation. And Vennes sat on the Minnesota Teen Challenge Board of Directors as recently as last February.

Whether these tangled relationships between Vennes, Fidelis and Teen Challenge would rise to anything more than “none” in the eyes of the IRS is not so clear.

Vennes, Teen Challenge and Petters

The Petters financial fraud investigation stems from alleged investments made in Petters’ companies for the purchase of electronics and other goods for resale by Petters’ companies — goods that, according to lawsuits and federal affidavits, never existed. Investors were paid interest on their investments, and as each promissory note came due, new investors were allegedly lured into the scheme to cover the old investors. The deception began in the mid-1990s, according to court documents.

Vennes is alleged to have been used by Petters to lure primarily Christian organizations into investing in Petters’ companies through Metro Gem — one of Vennes’ companies — or through the Fidelis Foundation. Among those investors was Minnesota Teen Challenge, which allegedly lost $5.7 million in investments in Petters companies.

“In true Ponzi scheme fashion,” one lawsuit filed by investors against Petters and his associates alleges, “each time one of Plaintiff’s promissory notes expired, Petters secured a new note via Metro Gem and, again via Metro Gem, paid the interest due on the old note, presumably with funds obtained from other investors.”

The connection between the Fidelis Foundation, Petters and Teen Challenge is detailed in a federal affidavit authorizing seizure of Petters’ assets.

According to the affidavit, “PCI (Petters Company Inc.) has eight outstanding notes with the Fidelis Foundation reflecting an investment of $27,620,000.” One of those notes reflects that PCI obtained $4.350 million from “Fidelis Foundation, an agent for Minnesota Teen Challenge and Fidelis Foundation.” Minnesota Teen Challenge and Fidelis Foundation were to receive a security interest in PCI purchase orders that a witness against Petters (Deanna Coleman) had indicated were fictitious.

The affidavit states that Petters implicated Vennes in his alleged fraud scheme in recorded phone conversations.

“In these recordings, Petters repeatedly admits executing the fraud scheme by providing fraudulent information to investors,” the affidavit states. “Petters also attributes knowledge of, and participation in, the fraud scheme to (Deanna) Coleman, (Robert) White, Vennes (investor broker), and (Larry) Reynolds (vice president of NIR). Petters states that Vennes told Petters that they are “a little paper manufacturing plant.” On one occasion, Petters states that he and Vennes would be jointly implicated in a scheme to defraud investors out of $130 million.”

In the recordings, the affidavit states, “Vennes cautions that if investors send auditors out to visit warehouses where the merchandise is located, that the scheme would implode. Vennes also asks that Coleman prepare purchase orders to be submitted to investors so that the investors will extend the due date on a debt.”

The affidavit states that evidence shows Vennes was the broker for five investors who are owed approximately $1.2 billion by Petters and his companies, and that as a broker he earned at least $28 million in commissions for delivering investors to Petters and PCI.

Coleman, White, Reynolds and Michael Catain (another Petters associate) all have pleaded guilty to charges in the $3 billion fraud investigation and all have fingered Petters as the kingpin in the massive fraud scheme. Vennes has not been charged.

Minnesota Teen Challenge recently was forced to lay off 22 employees because of losses from its investments in Petters’ businesses. The organization only obliquely refers to its endangered investments in an oddly worded letter posted on its website:

“About seven years ago, one of our major donors recommended that we consider building a strong reserve fund for Teen Challenge — a nest egg — for use in case of emergency or for program expansion. The donor suggested that we work with the Harvest Fund, and later the Fidelis Foundation, organizations that work with many other Christian ministries, and consider investing some of his large charitable gifts in the Petters Companies, a once strong, respected corporate entity in Minnesota.”

The letter goes on to note that “For seven years this investment bore a healthy return and helped us expand our programming and outreach.” But it makes no mention of the precarious situation those investments now are in, nor does it name the mysterious “major donor” who recommended the investment in Petters’ company.

‘Lost life savings’

The relationships between Vennes and Petters are further delineated in a class-action lawsuit filed in connection with the Petters investigation on behalf of two Bloomington-based investment firms representing over 100 pastors, ministers, ministries and nonprofit organizations.

According to the lawsuit filed against Petters, his companies and associates by investment firms AI Plus and IOC Distribution, Petters “used Vennes to access Plaintiffs because of Vennes’ connections and stature in the Twin Cities Christian community.”

The lawsuit provides details of a number of investments in Petters’ companies made by AI Plus and IOC Distributing through Vennes that allegedly were secured by merchandise purchased by Petters’ companies. The transactions were described as “a complete fraud … In reality, no merchandise was ever purchased with Plaintiffs’ money.”

The lawsuit alleges Petters and his associates violated the federal Racketeer Influenced Corrupt Organizations (RICO) Act and other state and common laws in a scheme that began in 1995, and claims plaintiff’s investments of more than $20.6 million since 2001 have “vanished,” along with interest due them.

“The money lost by IOC and AI Plus represents the lost life savings of many local pastors, churches and other nonprofit organizations,” the lawsuit states.

According to the lawsuit, Vennes maintains he was not aware that the investments were fraudulent.

“Vennes has professed that he was at all times under the belief that all of the transactions underlying the investments he facilitated at Petters’ behest were legitimate and that he sincerely believed the transactions memorialized in documents he was provided and which Petters and others described to him were genuine,” the lawsuit says. “Vennes has maintained his complete innocence of any wrongdoing in connection with Defendants’ scheme.”

Vennes was not named as a defendant in the lawsuit.

According to another federal racketeering lawsuit filed against Petters and his associates by Mars Hill Media, a Minnesota nonprofit organization, Mars Hills Media was “introduced to the PCI investment opportunity years earlier by Frank Vennes.”

Mars Hills Media was one of the nonprofits that invested in the $4.35 million note with PCI, along with Minnesota Teen Challenge. Mars Hills’ portion of the note was $800,000.

According to the Mars Hill Media lawsuit, Petters and his companies “used Vennes to gain access to and obtain funds from various investors, often through the various companies Vennes headed.” Fidelis Foundation and Metro Gem were named as two of those entities associated with Vennes through which they were allegedly defrauded.

Despite Vennes’ alleged deep involvement in the Petters scheme, Mars Hills Media did not name him as a defendant in its lawsuit either.

What does Bachmann know about Vennes’ role?

Based on legal documents and court filings, it appears that Frank Vennes has played a key role in the Petters financial fraud investigation. And although his homes have been raided and his assets frozen, he has not yet been charged with any crime. Nor has Vennes been named as a defendant in any of the lawsuits that have sprung out of the Petters investigation and subsequent guilty pleas of Petters associates.

Yet Michele Bachmann has rescinded her letter of recommendation for a presidential pardon for Vennes, claiming she “may have too hastily accepted his claims of redemption.” And in an effort to further distance herself from someone she once described as a “unique man” who has “demonstrated true reformation,” she’s donated a portion of the campaign contributions she’s received from Vennes and his wife to a charity closely tied to Vennes — one that has been deeply harmed by the Petters scandal.

Bachmann implies in her letter recommending a pardon that she has some familiarity with Vennes’ finances. Does Bachmann know something about Vennes’ guilt that federal investigators and plaintiffs’ lawyers do not? Why has she seemingly acted alone in presuming his guilt? Why was Bachmann so secretive about the charity she donated Vennes’ campaign contribution to? And what role did the substantial campaign contributions from Vennes’ family and associates play in Bachmann’s decision to recommend a pardon for him in the first place?

Bachmann has refused to respond to repeated requests by Minnesota Independent for information about these and other questions regarding her personal and financial relationship to Frank Vennes Jr., despite her recent call for the news media to investigate members of Congress.

The fallout from Rep. Michele Bachmann’s “anti-America” interview with MSNBC’s Chris Matthews last Friday has turned the 2008 6^th District race on its head. But it also could poison the well for Bachmann’s future fundraising efforts should she win this time or run for another office in the future.

It’s been widely noted that Bachmann’s challenger, El Tinklenberg, has raised a reported $1.45 million in campaign donations since that interview.

How about Bachmann? She has taken in $29,900 in itemized (over $250) contributions since last Friday.

But a spokesperson for at least one of Bachmann’s contributors — Schwan Food PAC of Marshall, MN — tells Minnesota Independent his company isn’t happy with the congresswoman’s comments and indicates they will almost certainly be taken into account before making future contributions to her.

Schwan’s political action committee donated $2,000 to Bachmann’s campaign on Oct. 22. But Alan Poff, Schwan’s government affairs manager, says the PAC’s steering committee approved the contribution before Bachmann went public with her anti-American suspicions.

“I’m not okay with those comments,” he stated emphatically and repeatedly. “I don’t think the comments were appropriate.” Schwan’s PAC, supported by the company’s executives, contributed to Bachmann because she’s “pro-business,” says Poff. “I would think those comments would be considered” by the PAC’s steering committee before making any future donations to Bachmann, he added.

Other corporate PACs kicking into Bachmann’s campaign coffers in the post-Hardball week include:

American Milk Producers ($1,000)
Boston Scientific PAC ($1,000)
Pfizer ($2,000)
National Association of Health Underwriters ($1,500)
Safari Club International ($2,000)

While Bachmann’s controversial comments may give pause to some of her corporate supporters in the future, she’ll always have her base.

Arnold and Jean Kroll, retirees from Forest Lake, each donated $2,300 to Bachmann’s campaign on Oct. 22.

“Actually, it was my husband who did,” says Jean Kroll.

But Arnold trumpets his support for Bachmann to MnIndy in no uncertain terms. “I believe in what [Bachmann] said and I do not believe in what the press is doing to her,” he asserts. “It’s been all very one-sided. That’s one of the reasons the bond houses just rated the New York Times bonds as junk. I think everything has been slanted one way. I just wanted to even things out a little bit.”

Besides retirees, “unemployed homemakers” (wives of wealthy spouses) have always been among Bachmann’s most generous supporters. Since her MSNBC meltdown, Bachmann has raked in $5,000 from four contributors in that sector.

While Michele Bachmann has been calling on the media to investigate suspected “anti-American” members of Congress and who they associate with, she’s had little to say about her own personal and financial association with convicted felon, campaign contributor and Tom Petters associate Frank Vennes Jr.

Bachmann has refused repeated requests from Minnesota Independent for further clarification of her relationship with Vennes, which makes for a curious nexus of campaign financing, presidential pardons, evangelical ministries and multibillion-dollar Ponzi schemes.

Bachmann wrote a letter of recommendation in December 2007 for a presidential pardon of Vennes for federal money laundering, cocaine distribution and illegal firearms sales convictions. Vennes pleaded guilty and no contest to the charges in 1987 and was sentenced to five years in prison, which he served in Sandstone Federal Correctional Facility in Sandstone, MN.

Six months after Bachmann recommended Vennes for a pardon, Vennes and his wife, Kimberly, who are not constituents of Bachmann’s, dumped $9,200 into Bachmann’s re-election campaign. The Venneses already were among Bachmann’s top individual campaign contributors when Bachmann solicited the pardon, having contributed $18,200 to her campaign committees between 2005-2007. Vennes’ brother and his wife, Greg and Stephanie Vennes, have contributed an additional $8,400 to Bachmann since 2005. And Vennes’ personal attorney, C. Craig Howse, has donated $5,000 to Bachmann’s campaign funds since 2007.

Bachmann was highly complimentary of Vennes in her letter of recommendation, which referred to her “personal” relationship with him but not her financial one:

“As a U.S. Representative, I am confident of Mr. Vennes’ successful rehabilitation and that a pardon will be good for the neediest of society,” Bachmann wrote to the U.S. Office of Pardon Attorney. “Mr. Vennes is seeking a pardon so that he may be further used to help others. As I know from personal experience, Mr. Vennes has used his business position and success to fund hundreds of nonprofit organizations dedicated to helping the neediest in our society.”

In addition, Bachmann noted that Vennes needed a pardon because he “still encounters the barriers of his past and especially in the area of finance loan documents.”

Bachmann has refused to explain what the finance loan documents of Vennes’ were that she referred to in her letter.

On Sept. 24, Vennes’ Shorewood home was raided in connection with the multibillion-dollar Tom Petters financial investigation. According to the federal search warrant, Vennes was alleged to have hauled in more than $28 million in commissions for his role in luring five investors to pony up $1.2 billion in Petters’ alleged giant Ponzi scheme.

Eight days later on Oct. 2, Bachmann withdrew her letter of recommendation for Vennes’ pardon and, her chief of staff claims, donated one of Petters’ campaign contributions to an unspecified charity.

“I had known Mr. Vennes for some time and was familiar with his good works with local charity organizations,” Bachmann wrote to the Office of Pardon Attorney. “Like so many others, I was under the impression that he had turned his life around and was seeking to do the right thing by those less fortunate. Regrettably, it now appears that I may have too hastily accepted his claims of redemption and I must withdraw my previous letter.”

Vennes had not been charged with a crime when Bachmann yanked her pardon recommendation and washed her hands of some of Vennes’ campaign cash; as of October 21, he still has not been charged, although his assets were frozen by a federal judge and large amounts of cash, gems, artwork and coins seized from his home.

Bachmann’s withdrawal of her pardon request raises many questions: Why did Bachmann bail on her friend and benefactor before he was even charged, let alone convicted? Have federal investigators talked to Bachmann about Frank Vennes, and if not, should they?

Of course, it could just be that Bachmann was protecting her own political hide by cutting and running from Vennes, regardless of his guilt or innocence.

Bachmann was not any more forthcoming in an interview Oct. 19 with WCCO’s Esme Murphy, who sprung a question to the 6^th District Republican about her relationship with Vennes.

“When the Tom Petters affair came open, and Frank may have a part in that affair, it wasn’t appropriate for me to recommend a pardon anymore,” Bachmann nervously explained, as footage of Petters and the raid on his house rolled behind them. “And so my office issued a letter, and we pulled that pardon back because we don’t know what the answers are right now about his involvement with Tom Petters.”

Bachmann told Murphy she met Vennes through his work with Teen Challenge, an evangelical Christian residential treatment program for troubled youth. Teen Challenge recently was forced to lay off 22 employees because of losses from its $5.7 million investments in Petters’ businesses.

Bachmann made no mention to Murphy of the Vennes family’s tens of thousands of dollars in campaign contributions she’s received. And Bachmann has refused to respond to questions about the status of the Vennes family contributions that she did not donate to charity.

But that hasn’t stopped the 6^th District Republican from putting the “for sale” sign outside her office and raking in $843,079 from political action committees through Oct. 15 in this election cycle—at least $182,255 of which came from lobbyists, according to the Center for Responsive Politics.

Bachmann sits on the House Financial Services Committee, and the bulk of her corporate PAC money comes from — you guessed it — the financial industry. And while she voted against the Wall Street bailout, as her new ad notes, she has blamed the financial crisis on “hyper-regulation” of the financial industry (as well as poor people) and pledged to release the shackles of federal regulation from them. As part of her solution for getting money back into the system, Bachmann has called for eliminating the capital gains tax, which would benefit chiefly investors in stocks, bonds and real estate.

Listed among Bachmann’s financial services contributors in this election cycle, which doesn’t include the boatloads of money she’s received from individual contributors from the financial sector, are:

• American Bankers Association, $7,000
• ACA International, which represents repo men third-party debt collectors, $10,000
• American Express, $3,000
• American Financial Services Association, $2,000
• American Institute of Certified Public Accountants, $13,000
• Bank of America, $7,000
• Capital One Financial, $2,000
• Charles Schwab, $3,000
• Citigroup, $2,000
• Community Financial Services Association of America, $3,000
• Council of Insurance Agents and Brokers, $5,500
• Countrywide Financial, $2,000
• Freddie Mac, $2,500
• Fannie Mae, $4,000
• Financial Services Roundtable, $3,000
• Financial Services Institute, $1,000
• Genworth Financial, $2,000
• Hartford Financial Services, $5,500
• Independent Community Bankers of America, $4,000
• Independent Insurance Agents and Brokers of America, $9,000
• Investment Company Institute, $3,000
• J.P. Morgan Chase $ Co., $3,000
• KPMG, $11,500
• Merrill Lynch, $3,000
• National Association of Mutual Insurance Companies, $4,000
• National Association of Health Underwriters, $4,500
• National Association of Insurance & Financial Advisors, $4,000
• National Association of Mortgage Brokers, $2,000
• National Association of Real Estate Investment Trusts, $3,000
• National Association of Realtors, $2,000
• National Multihousing Council, $3,000
• National Venture Capital Association, $4,250
• PricewaterhouseCoopers, $10,000
• Property Casualty Insurers Corp., $6,000
• TCF Financial, $10,000
• Thrivent Financial for Lutherans, $2,000
• Travelers Co., $5,000
• Tudor Investment, $4,600
• U.S. Bancorp, $1,000
• United Health Group, $2,000
• Wells Fargo, $1,500
• Zurich Holding Co., $2,50

 

Vennes, whose Lake Minnetonka home was raided by federal agents September 24 in connection with the Petters investigation, has not yet been charged with any crime, but a federal judge ordered his assets frozen earlier this week. However, barely a week after news of the raid on his home became public, Vennes became radioactive to Bachmann.

On October 2, she withdrew a letter of recommendation for a presidential pardon she had written for Vennes, who served time in Sandstone Federal Correctional Facility in the ‘80s for money laundering, cocaine distribution and illegal firearm sales. And, her chief of staff now has acknowledged that on the same day, Bachmann donated at least one of Vennes’ multiple campaign contributions to charity. Neither the amount of the donation nor the name of the charity were revealed.

Vennes and his family are among Bachmann’s biggest individual campaign contributors. He and his wife, Kimberly, have donated $27,400 to Bachmann’s campaign funds since 2005–$9,200 this year alone. Vennes’ brother and his wife, Greg and Stephanie Vennes, have donated an additional $8,400 to Bachmann since 2005. And Vennes’ personal lawyer, C. Craig Howse, has donated another $5,000 to Bachmann’s campaign coffers since 2007.

Several other Minnesota politicians and candidates—including Elwyn Tinklenberg, Bachmann’s 6th District Democratic opponent—have returned campaign contributions from Petters.

Bachmann has not yet explained why she was so quick to abandon Vennes—whom she described in her letter of recommendation as a “unique man” who has “demonstrated true reformation”—even though he has yet to be charged with anything.

According to a federal search warrant affidavit used to search Vennes’ home last month, Vennes reaped more than $28 million in commissions for his alleged role in luring five investors to pony up $1.2 billion in Petters’ alleged giant Ponzi scheme. In a related matter, Vennes is among the targets of a federal racketeering lawsuit filed last week by more than 100 ministers and nonprofit organizations that claims they lost more than $20 million in the alleged investment fraud.

When Vennes’ home was raided, federal agents seized “boxes and buckets of silver and gold coins, trays of jewelry, five stacks of $100 bills, boxes of gem stones, silver plates and Rolex watches. Agents also seized diamond rings and numerous paintings, including dozens with religious themes, such as the raising of Lazarus from the dead.”

Campaign cash from friend and ex-con Frank Vennes Jr. isn’t the only money Rep. Michele Bachmann is running away from. Bachmann also has returned contributions from the political action committees for the embattled federally sponsored mortgage corporations Fannie Mae and Freddie Mac and the American Bankers Association.

On Sept. 24, Bachmann’s campaign committee returned $7,500 to the Fannie Mae PAC and $2,500 to the Federal Home Loan Mortgage Corp. PAC (Freddie Mac). And on Sept. 30, Bachmann returned a $500 contribution from the American Bankers Association PAC.

Bachmann sits on the House Financial Services Committee and has received hundreds of thousands of dollars from the banking, financial and insurance industry sectors.

Republican Congresswoman Michele Bachmann was quick to try to distance herself from ex-con campaign contributor Frank Vennes Jr. when his alleged involvement in the multibillion-dollar Tom Petters financial fraud scandal became public recently. But she showed little hesitation in showering praise on the convicted money-launderer and cocaine-and-gun trafficker a year ago in her letter of recommendation to grant Vennes–who, along with his wife, is among the most generous individual donors to Bachmann’s campaigns–a presidential pardon.

In a letter to the Office of Pardon Attorney dated Dec. 10, 2007, that I obtained yesterday (PDF), Bachmann declared that “granting a pardon to Mr. Vennes is good for society. Mr. Vennes is truly a unique man in that he is not asking for a pardon that he may achieve personal success. By the grace of God, that has been done.”

God, however, may have had a little help from Petters. According to a federal search warrant affidavit used to search Vennes’ Minnetonka home Sept. 24, Vennes hauled in more than $28 million in commissions for his alleged role in luring five investors to pony up $1.2 billion in Petters’ alleged giant Ponzi scheme. Vennes has not yet been charged in the alleged caper.

Bachmann cited Vennes’ reported work with charitable organizations as justification for a pardon for the crimes he committed. Vennes pleaded guilty and no contest in 1987 to federal charges of money laundering, cocaine distribution and illegal firearms sales. He was sentenced to five years in prison, which he served at Sandstone Federal Correctional Institution in Sandstone, Minn.

Bachmann wrote:

“As a U.S. Representative, I am confident of Mr. Vennes’ successful rehabilitation and that a pardon will be good for the neediest of society. Mr. Vennes is seeking a pardon so that he may be further used to help others. As I know from personal experience, Mr. Vennes has used his business position and success to fund hundreds of nonprofit organizations dedicated to helping the neediest in our society. The Fidelis Foundation, backed by Mr. Vennes, has directed over $10.7 million in total gifts in the last three years, and the Fidelis Foundation has ranked #6, #9 and #7 as the largest grant-making foundation in Minnesota over the past three years.”

The Fidelis Foundation is a Plymouth, Minn.-based nonprofit organization “organized to assist Christians in discerning, clarifying and implementing God’s call and direction in their life,” according to the group’s tax filings. Its chairman is G. Craig Howse, Vennes’ lawyer, and the organization leases office space from Howse for $1,300 a month.

Howse has donated $5,000 to Bachmann’s campaign committee since 2007.

Bachmann notes in her letter that Vennes needs a pardon “so he can help more people than he does. Despite his success, Mr. Vennes still encounters the barriers of his past and especially in the area of finance loan documents. This hinders his ability to expand his business which places limits on the support to the neediest in society … a pardon would release the weights of the past that serve no purpose, as Mr. Vennes has stated his desire to help so many more.”

It’s still not clear why Bachmann used her congressional status to try to leverage a presidential pardon for someone who does not even live in her congressional district. At this point, the only apparent connection between Vennes and Bachmann as a congressperson is the $27,400 Vennes and his wife, Kimberly, have donated to Bachmann’s campaign funds since 2005, making the couple among Bachmann’s largest individual contributors. Vennes’ brother and his wife, Greg and Stephanie Vennes, have donated an additional $8,400 to Bachmann since 2005.

It’s also not known whether Bachmann intends to return or donate to charity any or all of the campaign contributions received from the Vennes. Other politicians or candidates who have received campaign donations tainted by the Petters scandal — including Bachmann’s 6th District Democratic opponent, Elwyn Tinklenberg — have done so.

Further clarification on these and other points regarding Bachmann’s relationship with Frank Vennes Jr. has been requested from the congresswoman’s office.

Frank Vennes Jr., a major financial contributor to Minnesota 6^th District Congresswoman Michele Bachmann, may be innocent until proven guilty, but Bachmann has already convicted him and thrown him under the campaign bus.

Barely a week after Vennes’ home was raided on Sept. 24 by federal agents in connection with the massive, billion-dollar fraud investigation of Tom Petters, the Stillwater Republican withdrew a letter of support for a Presidential pardon she had written for Vennes about a year ago.

“I had known Mr. Vennes for some time and was familiar with his good works with local charity organizations,” Bachmann wrote to the Office of Pardon Attorney on October 2, 2008. “Like so many others, I was under the impression that he had turned his life around and was seeking to do the right thing by those less fortunate.

“Regrettably,” Bachmann continued, “it now appears that I may have too hastily accepted his claims of redemption and I must withdraw my previous letter.”

Bachmann wrote the letter urging the president to pardon Vennes for his 1987 conviction on federal money laundering, illegal firearm sales and cocaine distribution charges. He was sentenced to five years in federal prison. After serving his sentence in Sandstone Federal Correctional Institution in Minnesota, Vennes went through a bizarre series of appeals claiming entrapment, which the 8^th Circuit Court of Appeals ultimately rejected in 1994.

Vennes’ latest troubles involve an alleged giant Ponzi scheme with local billionaire Petters at the vortex of the widening probe. Although Vennes has not been charged, a federal search warrant affidavit accuses him of facilitating a $1.2 billion swindle of five investors in companies controlled by Petters, collecting more than $28 million in commissions in the process.

Bachmann’s original letter of support for Vennes’ pardon wouldn’t be so unusual if it weren’t for the fact that he is not even a constituent of Bachmann’s. Vennes’ home is in Shorewood and his business address is listed as Excelsior, neither of which are anywhere near the 6^th District.

Vennes, however, has been a major financial contributor to Bachmann since 2005. He and his wife, Kimberly, have contributed a total of $27,400 to Bachmann since 2005. Vennes’ brother and his wife, Greg and Stephanie Vennes, have contributed another $8,400 to Bachmann since 2005.

Frank Vennes also has contributed heavily to many other federal and state Republican candidates and causes, including Gov. Tim Pawlenty, the Minnesota House Republican Campaign Committee, and the Northstar Leadership PAC, a St. Paul-based political action committee that gave Bachmann $10,000 in 2006.

Was Bachmann’s letter in support of Vennes’ presidential pardon a quid pro quo for Vennes’ largesse? Until Bachmann releases her original letter, the motivation behind it won’t be known. Bachmann chief of staff Michele Marston told Minnesota Independent Monday that “We’re trying to track down a copy of that letter.”

According to the Office of the Pardon Attorney in the U.S. Department of Justice, “public record documents that may be compiled in the course of processing a clemency application … are generally made available upon request by third-parties (including representatives of the news media) pursuant to the Freedom of Information Act, unless such disclosure could reasonably be expected to constitute an unwarranted invasion of the petitioner’s personal privacy. In addition, unsolicited Congressional correspondence is treated in the same manner.”

>Bachmann’s letter withdrawing her support for a pardon gave him faint praise for his past charitable work. But nowhere does she indicate specifically why she no longer believes he deserves one, merely alluding to his continuing “inner struggles.”

“Many less privileged people benefited from his [Vennes'] outward demonstrations of support,” she wrote. “And, such visible signs of hope, along with his affirmations of shame at his previous actions, led me and so many others to believe that public redemption should be brought to bear in this case. But, the power of a Presidential pardon should be reserved only for those who truly deserve it. While Mr. Vennes showed public regret, he still clearly needs to reconcile his inner struggles and I am no longer convinced that he would be an appropriate candidate for a Presidential pardon.”

But despite Bachmann’s claims of Vennes’ “affirmations of shame” and “public regret” over his misdeeds, a reading of Vennes’ arguments in his multiple appeals suggests that Vennes did everything he could to blame the government and others for his crimes, even though he pleaded guilty and no contest to them at the time.

More: The full Bachmann withdrawal letter is here (PDF link).

Michele Bachmann's new digs

While Michele Bachmann has been busy blaming poor people and minorities for the Wall Street meltdown and housing foreclosures, she’s also been busy dealing with her own housing crisis: how to sell her toney Stillwater home and move into her new $1.27 million manor overlooking the 18th hole of Stoneridge Golf Course in West Lakeland Township.

Bachmann and her husband, Marcus, listed their 3,200-square-foot Stillwater home this summer at $359,000. It’s still for sale. Their palatial new digs on the golf course are considerably larger, at 5,200 square feet. Built in 2005 on 3.22 acres, it carried an original price tag of $1.75 million, but was listed for as low as $949,900 this summer. Its 2008 assessed value is $1,271,800, down from $1,290,500 in 2007. The Bachmanns’ purchase price is not known.

In 2007, it was featured as a “Dream Home” in the Parade of Homes tour.

“Casual elegance defined by deep rich colors and textures is presented in a European flavor throughout this four-bedroom walkout residence,” the listing read. “The stone exterior with a grand manor roof sets the stage for this dream home overlooking the 18th hole of the Stoneridge Golf Course.

“The arched stone entry is complimented with a western red cedar distressed door with iron highlights. Once inside the foyer, iron rails and hand scraped walnut plank flooring invites you into the gallery where arched openings lead to the magnificent main floor spaces.

”Both the formal dining adjacent to the foyer and a quaint breakfast bay overlook the golf course allowing for quality entertaining or a casual living atmosphere.”

Few amenities were spared: maple kitchen with granite and limestone countertops, powder room, wine cellar, bar, exercise room, resource room, four bathrooms, spa, fully paneled library with a see-through fireplace. And, of course, a three-car garage.

With all that space for “quality entertaining,” Bachmann may not have to go to Lake Minnetonka the next time George Bush or Dick Cheney come to town to raise money for her. She can have them out to her million-dollar country chateau on the back nine at Stoneridge instead.

Not bad for someone who’s never known anything but a government paycheck.