Elsewhere in Minnesota news this morning …

STATEWIDE: Ask Al more. Five dollars and cab fare to New York City will get you a lunch audience with Sen. Franken. [Washington Post's In the Loop]

TWIN CITIES: Random acts of criminality on YouTube. Police are on the trail of local thugs who posted a clip showing them attacking people on bikes and on foot. [Fox 9]

PRIOR LAKE: Native Americans get ready for Copenhagen. They want a say in climate-change talks. [Associated Press]

DASSEL: Steve Dille out. The Republican state senator won’t run again; he was one of the eight GOPers who helped override Gov. Pawlenty’s veto of transportation funding in 2008. [Litchfield Independent Review; Polinaut]

PRAIRIE ISLAND: Lege has last say on nuke storage. The people’s reps at the state Capitol could reverse a regulatory OK for Xcel Energy to store more nuclear waste. [Rochester Post-Bulletin]

STATEWIDE: Or possibly universe-wide? Minnesota Public Radio’s designs on dominance in news. [Braublog]

Elsewhere in Minnesota news this morning …

MINNEAPOLIS: A Mill City effort to oust Michele Bachmann. City residents (and noted DFLers) Al Franken, Margaret Anderson Kelliher and R.T. Rybak will host a fundraiser for state Sen. Tarryl Clark’s Sixth District congressional campaign. [Polinaut]

SAUK RAPIDS: GOP guv-candidates try “speed-dating.” OK, now that’s connecting with voters. Get a room big tent!  [St. Cloud Times]

ST. PAUL: The Petters affair. Not his alleged Ponzi scheme, but the revelation at Tom Petters’ trial about his “intimate” relationship with employee-turned-prosecution-witness Deanna Coleman [WCCO-TV; Minneapolis-St. Paul Business Journal]

MOOSE LAKE: Gov. Pawlenty to punish purchasers of TVs for sex offenders. Lock them up and throw away the key, with no big TV? Works for sex offenders. [Associated Press]

NEW ULM: Taunters punished. Parents protested suspensions and other penalties after an entire spectator section was ejected from a high school football game, part of a rash of bad behavior at local athletic events. [New Ulm Journal]

CARVER COUNTY: Talkin’ crap. On review, Pawlenty’s Pollution Control Agency decides to put the freedom to speak about septic systems first. [Star Tribune]

]]> http://minnesotaindependent.com/48391/am-mn-vote-for-referendums-yes-and-no-say-newspapers/feed 1 http://minnesotaindependent.com/45467/am-mn-pittsburghs-g-20-is-st-pauls-rnc http://minnesotaindependent.com/45467/am-mn-pittsburghs-g-20-is-st-pauls-rnc#comments Wed, 23 Sep 2009 13:30:43 +0000 Chris Steller http://minnesotaindependent.com/?p=45467 St. Paul set the standard at last year’s Republican National Convention for dealing with protesters and reporters during a so-called “National Special Security Event.” That Minnesota hotdish of pre-emptive detention and prior (physical) restraint on the media is getting re-warmed as Pittsburgh prepares to host the G-20 Summit later this week, writes Nigel Parry at the RNC ‘08 Report.

Elsewhere in Minnesota news this morning …

ST. PAUL: Gov. Pawlenty’s stance on climate-change continues to melt. A policy point evolves into a punch line. [Minnesota Public Radio]

NASHWAUK: Judges reject environmentalists’ case against new taconite plant. Global warming was addressed in the Environmental Impact Study — didn’t you see the chapter heading “Carbon Footprint”? [Duluth News Tribune]

MINNEAPOLIS: Editorial views right-sized. A candidate for park board in Minneapolis complains that due to “staff constraints” the Star-Tribune editorial page will only endorse in races that have no incumbent. [e-democracy]

ALEXANDRIA: Politics be damned! Susan Gaertner, Ramsey County Attorney and guv candidate, tells a local audience health care reform requires a real leader: “I am ready to provide that leadership, no matter what the political consequences may be.” [Alexandria Echo Press]

LAKE MINNETONKA: Still sweet. Ponzi schemer Tom Petters’ 590-bottle wine cellar goes for $7,080. [Star Tribune]

EDEN PRAIRIE: Free speech in chains at local library. A blogger defends a library patron’s right to leave notes no one can read with “9/11″ and doodles of buildings.   [Gavin Sullivan]

U.S. Sen. Al Franken, calling himself “a voice for the overwhelming majority of Americans who aren’t lawyers” on the Senate floor Wednesday night, continued his harsh critique of the U.S. Supreme Court, lambasting its recent record of overturning its own precedents:

Again, I think that this is judicial activism. In fact, I think it’s judicial activism in one direction — away from long-standing protections for the individual and towards a more friendly law for the powerful.

Franken endorsed high-court nominee Sonia Sotomayor, praising her “inherent judicial restraint” and promising that “a vote for Judge Sotomayor is a vote against judicial activism.”

Franken, one of a half-dozen non-lawyers on the Senate Judiciary Committee, used legalese like stare decisis to attack a series of high-court rulings from the last five years on such issues as workers’ rights, voting rights, price-fixing, campaign finance and securities regulation.

But he described those decisions — some well-known, some not — in terms of how they affect the daily lives of Americans, particularly Minnesotans.

Indeed, the Senate’s freshest freshman seemed to have tailored his talk to Minnesotan citizens, mentioning his home state 16 times in the course of his 16-minute speech (pdf). He used the state’s gender-gap (women earn 74 cents to every men’s dollar) and cited Minnesota’s own homegrown Ponzi schemer (Tom Petters) alongside the nationally known Bernie Madoff. Also getting shout-outs were Minnesota’s older workers, working women, investors and small-business owners.

Franken’s speech was an extended followup — measured but not tempered — to his fiery five-minute remarks during the Judiciary Committee hearings last week. Here’s the video, via C-SPAN:

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.”

What might have motivated Bachmann to write a letter supporting a presidential pardon for Vennes on Dec. 10, 2007? Vennes made a series of donations to her campaign before and after she wrote the letter — which she withdrew in the final month of her re-election campaign last year, after the Petters scandal came to light.

Vennes has not yet been charged in connection with the Petters investigation.

It’s the second politically unpalatable presidential pardon in six weeks to touch Coleman, who remains in the grips of a drawn-out recount in his bid for re-election against Democratic challenger Al Franken. The Minnesota Independent broke the news last month that soon after taking office in 2003, Coleman wrote letters of support for the pardon application of Frank Vennes, Jr. A convicted money launderer now best known as an associate of accused Ponzi schemer Tom Petters, Vennes was also a donor to Coleman’s 2002 campaign fund and to political action committees that supported Coleman.

U.S. Rep. Michele Bachmann revoked her support of a pardon for Vennes after the Petters scandal broke this year. She also redirected a portion of Vennes’s contributions to her campaign to Minnesota Teen Challenge, a faith-based drug treatment program that’s been a favorite of Minnesota politicians.

If you accept taxpayer money, you have to accept that you’re going to receive public scrutiny.

That simple point seems to be eluding Minnesota Teen Challenge (MNTC), the faith-based drug treatment program which secured a federal earmark in early 2008 arranged by Rep. Jim Ramstad and Sen. Amy Klobuchar, for its “Know the Truth” program which aims to prevent drug use.

Operating close to the border of church and state, the group’s members are unrealistic if they think their work is not going to get attention.

Klobuchar’s deputy chief of staff, Andrea Mokros, explains the senator’s role in requesting the earmark. “The Senator joined several members of the state delegation, including Jim Ramstad and Keith Ellison, in submitting the request for a Minnesota program to prevent drug abuse. As a former prosecutor, she has long been concerned about the impact of drug abuse on both individuals and the community, and she has worked with a range of groups that work to prevent and treat drug addiction.”

MNTC officials were upset by my coverage of their public statements, publicly available employment application materials and publicly available information about their ties to the national organization that spawned the local operation. Maia Szalavitz, a Huffington Post writer with expertise in traumatized youth, also wrote about the Ramstad earmark. While Szalavitz and I published similar articles on the same day, we haven’t ever communicated with each other.

In response, MNTC executive director Rich Scherber sent a nearly identically worded letter to both the Minnesota Independent and the Huffington Post.

The point of my article was not to suggest that MNTC was not successful or beneficial, as Scherber implies. Rather it was to point out the overtly religious nature of the organization and that the program has historically been controversial. In the interest of brevity, I left some examples out. For instance, MNTC’s stance on Halloween verges on the comical (”Halloween is a day set up totally for Satan … The more people who go out dressed as demons, ghosts, witches and goblins, the more glory Satan receives”). Scherber’s claim that the Holy Spirit told an MNTC bus driver to avoid the 35-W bridge on the day of its collapse in August 2007 is touching but, let us say, unverified.

I don’t question that faith-based programs can be very effective for those that share the programs’ faith. Faith is a huge motivator in people’s lives. I think MNTC has been very effective for the clients it serves. However, I don’t think it’s appropriate for judges, prosecutors or public defenders to suggest the program as an alternative to jail. (Szalavitz, by the way, vehemently disagrees with MNTC’s claims about its success rate).

I also wrote about a local media report that points to the possibility that Know the Truth staff have discussed their religious conversions in relation to their recovery at a local church. That’s not a bad thing in itself, except the Know the Truth program is paid for by people who don’t share that religious faith. Were those Know the Truth representatives telling the same stories in public schools? Scherber didn’t address the issue in any complaint letters.

At least one Twin Cities school has decided to pass on MNTC’s offer to appear. Know the Truth had a presentation scheduled at South High School in Minneapolis next month. The school canceled the appearance after tightening the restrictions on outside groups that speak at the school, a concerned parent told the Minnesota Independent.

One thing is clear. The pressure to keep a positive public image is important to MNTC at this time. As the group’s Web site acknowledges, MNTC invested money in Fidelis Foundation, an institution created by Christian philanthropist Tom Petters, who is now under investigation for organizing a Ponzi scheme and defrauding investors such as the Fidelis Foundation. MNTC lost a lot of money and Klobuchar’s proposed earmark will certainly help ease the burden a little. What else could explain sending form letters to every media outlet that runs an article critical of the organization?

Correction: The article previously read, “According to Sen. Amy Klobuchar’s Web site, the senator is requesting (PDF) an additional $500,000 this year — a sum that would more than double the program’s budget.”

The document on Klobuchar’s site is for fiscal year 2009, although the document itself does not indicate as such. She requested the same earmark as Ramstad. Additional money is not being requested for FY2010.

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.