Rep. Jim Ramstad. Photo: Lauren Victoria Burke, WDCpix

During his time in Congress, retiring Republican Rep. Jim Ramstad championed the needs of those experiencing mental illness or chemical addiction, often through the lens of his own experience as a recovering alcoholic. For that reason, his name tops the list of possible appointments by the Obama administration as either drug czar or as the administrator of the Substance Abuse and Mental Health Services Administration (SAMHSA). But one earmark by Ramstad could prompt some questions from Senate Democrats during a confirmation hearing if Ramstad is nominated for either position.

Earlier this year, Ramstad sponsored a $235,000 earmark for the Minnesota Teen Challenge (MNTC), an Assemblies of God drug treatment center with a history of controversial therapies and overt religious indoctrination.

MNTC is part of a national network of drug treatment and “discipleship training” centers called Teen Challenge. (Here’s MNTC’s response to this article.)

Teen Challenge programs across the country typically describe themselves in these terms:

“Being a Christian discipleship program, it endeavors to minister to the whole person, helping them to become mentally sound, emotionally balanced, socially adjusted, physically well, and spiritually alive through a relationship with Jesus Christ.”

Teen Challenge’s overt Christian message is extends to outright conversion — at least according to its leaders. During a congressional hearing in May 2001, Congress members challenged the ability of Teen Challenge  and other faith-based initiatives to offer government services without overt religiousness. Rep. Mark Souder (R-Ind.) asked Teen Challenge Executive Director John Castellani if the organization hired non-Christians. Castellani said no. When asked if Teen Challenge takes non-Christian clients, Castellani said they did and he then bragged that some Jews who complete Teen Challenge programs become “completed Jews.”

In Minnesota the program requires signing a statement acknowledging the program’s Christian nature:

I will participate in daily devotions, Bible reading, and prayer. I will participate in the Teen Challenge choir which performs Christian songs at weekly church services and special events. I will participate in lecture classes, individualized study courses, group counseling, individual counseling, and other program components that are based on Christian principles. I will attend church services when scheduled. If offered the opportunity to partake in communion or water baptism my participation is voluntary. If I object to the religious nature of this program and its requirements, I will notify the Dean of Students and receive a referral to another program of my choosing.

Despite those voluntary statements, a number of MNTC participants are ordered by the courts to complete the program — or else end up in jail. Just this Monday, a Minnesota judge sentenced a 27-year old Crystal man to MNTC. And dozens of others are sentenced to the faith-based treatment center each year.

Working for MNTC is also difficult for non-Christians, even if the program welcomes non-Christian applicants. The employment application contains this statement:

I understand that MN Teen Challenge is a Christian church ministry affiliated with the Assemblies of God denomination. I understand that should my application be accepted, I will be working in an environment that is decidedly Christian in nature, and I hereby agree to abide by the bylaws, policies, and procedures of Minnesota Teen Challenge. I further understand that although my religious beliefs and practices may differ from those of Minnesota Teen Challenge, I will respect the religious views of MnTC and its leadership. I will refrain from promoting any beliefs or publicly demonstrating any behavior that contradicts the teaching, philosophy, or beliefs of the MnTC program during working hours, or while on MnTC property.

For non-Christian employees at a federally funded program, even leaving the office to privately pray in a vehicle in the parking lot could be grounds for immediate dismissal. For non-traditional families, bringing in pictures of loved ones could be grounds for dismissal. For Catholics, displaying any symbols that disagree with Pentecostalism could get an employee fired.

Know the Truth

MNTC is using its federal funds in Minnesota for a program called “Know the Truth.” The program works in middle schools, high schools and churches to encourage students to abstain from drug use and to help teens and parents talk about tough issues like drug use.

While MNTC has been attacked over the earmark, it contend it hasn’t used the money for religious purposes. The MNTC administration director offers this statement about the Know the Truth program:

Minnesota Teen Challenge is scheduled to receive a direct grant from the federal government to be used exclusively for a non-religious drug and alcohol abuse prevention program. This program contains no religious content whatsoever and has been presented to over 30,000 junior and senior high school students across the state. Minnesota Teen Challenge is aware of, and in agreement with the constitutional restrictions placed on receipt of government funds. We take great care to ensure that all federal money is strictly accounted for and that none of the dollars are ever used for religious purposes.

Know the Truth is one of those gray areas that separation-of-church-and-state advocates watch carefully. While MNTC says religious purpose is scrubbed from the program, the program itself is a referral to the overtly religious drug treatment programs. The name “Know the Truth” is a common theme in evangelical Christianity owing to the New Testament verse John 8:32, “Know the truth and the truth shall make you free.”

The Know the Truth program relies on the life stories of graduates from MNTC’s drug treatment programs, and those stories invariably have overtures of religious awakening as a route to freedom from addiction.

One such Know the Truth night at a Leroy, Minn., church highlighted the stories of Gina, Shaun and Bethany as recounted in the Leroy Independent.

“The bottom came, [Gina] said, when she was in jail for the second or third time and she was told by a person to ‘pray to God, just like you’re talking to me.’ This helped she said because she did need help desperately, and she knew God had heard her plea when her mother called that Gina’s children were being returned to her mother’s home, rather than being adopted out as had been the plan,” it read. “Shaun and Bethany also shared their stories of drug addiction and with God’s help had recovered and are now working with MN Teen Challenge.”

Is the Know the Truth program different when offered in a church instead of a high school?

Federally funded faith-based programs are controversial for the very reasons that make faith-based programs work for those who share the programs’ beliefs. The faithful cannot remain true to their faith if the government demands that faith be removed from a part of the program. The government cannot fulfill its commitment to the taxpayers if it supports a program that requires a certain faith from the staff and participants.

Ramstad’s position on faith-based recovery programs will come under further scrutiny if he secures a top job in the Obama administration.

Related: Minnesota Rep. Michele Bachmann also has ties to Minnesota Teen Challenge

Update: As MNTC was not contacted for this article, we’ve agreed to publish a letter from the organization’s executive director. Read it here.

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.