Nebraska Congressman Convicted On Charges Of Lying To The FBI About Foreign ‘Straw Donor' Scheme Faces Calls To Resign Amid Bid

OPEN SECRETS

Jeff Fortenberry. Image: Bill Clark/CQ-Roll Call via Getty Images

BY ANNA MASSOGLIA

A jury Thursday found Rep. Jeff Fortenberry (R-Neb.) guilty on three counts related to lying to federal agents about money his campaign received through a “straw-donor” scheme that steered illegal foreign contributions to U.S. presidential and congressional candidates.

The conviction stems from Fortenberry’s acceptance of about $30,000 from straw donors bankrolled by Lebanese-Nigerian billionaire Gilbert Chagoury. Chagoury maintains that he had hoped to curry favor to promote Christianity in the Middle East, while his multinational Nigeria-based companies have business interests around the world.

Fortenberry stepped down from his committee posts in October after he was indicted and, after his conviction, House Minority Leader Kevin McCarthy (R-Calif.) indicated that he thinks Fortenberry should resign from Congress. “I think when someone’s convicted it’s time to resign, he said. House Majority Leader Nancy Pelosi (R-Calif.) went a step further issuing a statement that Fortenberry “must resign” from the House.

Chagoury, a foreign national prohibited by federal law from making contributions to political groups or campaigns to influence U.S. elections, routed about $180,000 to four U.S. candidates through straw donors over the course of three election cycles.

Justice Department documents unsealed in April 2021 revealed that Chagoury agreed to pay the U.S. government $1.8 million to resolve allegations that he conspired to violate federal election laws in the straw-donor scheme.

Chagoury admitted the money disseminated to straw donors was intended to support candidates and that he was aware the contributions were made as illegal conduit contributions by giving his money under the name of another individual, according to court records.

Other recipients of straw donor contributions funded by Chagoury include the campaigns of Rep. Darrell Issa (R-Calif.) and former Rep. Lee Terry (R-Neb.), now a senior adviser at law firm Kelley, Drye & Warren, as well as a joint fundraising committee supporting the 2012 presidential bid of Sen. Mitt Romney (R-Utah).

Fortenberry was the only politician charged in the case. He was accused of concealing information and making false statements to federal investigators while the other politicians whose campaigns received illegal foreign funds from straw donors steering money from Chagoury have not been accused of wrongdoing.

On Oct. 19, a grand jury charged Fortenberry with knowingly making false statements to federal agents about whether he was aware that his campaign received illegal contributions from Chagoury at a 2016 fundraiser in Los Angeles.

Prosecutors claim that approximately $30,200 of the $36,000 raised at the 2016 fundraiser was contributed by six people who were allegedly reimbursed by Chagoury.

Toufic Baaklini, one of Chagoury’s two associates listed in Justice Department filings, testified that he didn’t tell Fortenberry that the contributions had come from a foreign billionaire and said he told Fortenberry there was nothing wrong with the money in order to protect him.

But prosecutors say Fortenberry later learned the contributions were illegal and repeatedly lied about it to federal agents. Fortenberry’s fundraising consultant also told prosecutors that she warned Fortenberry of the risk of illegal “foreign and conduit contributions.”

Court records show that Fortenberry met at least twice with Chagoury, once in Paris and another time in Washington, D.C. Baaklini testified that Fortenberry tried to meet with Chagoury again in Rome but that didn’t work out.

Fortenberry running for reelection amid calls to resign

The jury verdict in Fortenberry’s trial marks the first conviction of a sitting congressman since Rep. Jim Traficant (D-Ohio) was convicted of charges related to a bribery scheme in 2002.

Controversy around the case has fueled the fight over Fortenberry’s House seat representing Nebraska’s 1st Congressional District ahead of 2022 midterm elections. Fortenberry announced his reelection bid in January.

Fortenberry has not stated if the conviction will impact his campaigning but says he plans to appeal the conviction.

Nebraska state Sen. Patty Pansing Brooks, the top Democrat running in the 1st District, announced her bid for Fortenberry’s seat in November and raised nearly $210,000 in the final weeks of 2021. Pansing Brooks’ donors include Bob Kerrey, Nebraska’s former governor and former U.S. Senator. Her congressional campaign ended the year with about $160,000 cash on hand.

Some Republicans have endorsed Nebraska state Sen. Mike Flood, a conservative state lawmaker and former speaker of the Nebraska Legislature, who launched his campaign in January. Two weeks after Flood threw his hat in the ring, his campaign announced that he had already raised more than $400,000. After Gov. Pete Ricketts and former Gov. Dave Heineman each endorsed Flood, Fortenberry’s campaign paid for an attack ad trying to equate Flood to Democratic President Joe Biden because Flood voted in support of a bill to fund prenatal services for low-income women in 2012. Nebraska’s Republican primaries are scheduled for May 10.

Fortenberry’s campaign ended 2021 with more than $895,000 cash on hand after a $567,076 fundraising haul that year.

Fortenberry’s campaign reported paying multiple firms legal fees last year. His campaign’s top vendor in 2021 was Bienert Katzman Littrell Williams LLP, a California firm specializing in white collar criminal defense that has lawyers representing Fortenberry in the federal case. The firm received $155,000 in payments from Fortenberry’s campaign in 2021.

Federal campaign finance reports detailing what the campaigns have raised and spent in the first three months of 2022 must be filed by April 15.

Chagoury’s history of influence in the U.S.

Before steering money in the straw donor scheme, Chagoury previously attempted to contribute directly to a number of congressional campaigns and Republican Party committees starting in 1987 but the money was refunded.

In addition to political donations, Chagoury also curried influence in the U.S. by paying foreign agents to represent his interests and further the agenda of controversial Nigerian politicians, according to Foreign Agents Registration Act filings reviewed by OpenSecrets.

Unlike foreign national contributions to political campaigns, it is legal for foreign nationals to pay lobbyists and political operatives to represent their interests in the U.S. through lobbying or communications campaigns advancing their agenda.

Mark Corallo retroactively registered as a foreign agent of Chagoury in 2020 for a $900,000 foreign influence operation promoting then-Nigerian President Goodluck Jonathan ahead of his 2015 re-election campaign.

Anti-corruption researchers have described Jonathan’s administration as “probably the most corrupt government ever to take charge of affairs in Nigeria.” After Jonathan lost reelection in 2015, the Nigerian government accused the former president of taking bribes during his time in office. Officials in Jonathan’s government have also been accused of implementing a bribery scheme to support Jonathan’s failed 2015 reelection bid and of steering money to office holders to influence election outcomes.

Corallo, a former spokesperson for former President Donald Trump’s private legal team in the Russia investigation, had acted as Chagoury’s spokesperson since at least 2010.

FARA filings stamped May 2020 and March 2019 retroactively revealed additional information about the operation, detailing meetings and showing how Corallo’s firm routed funds through sub-vendors assisting with the foreign influence operations.

Corallo’s firm paid New World Group Public Affairs LLC, a lobbying firm run by former Rep. Jerry Weller (R-Ill.), a $15,000 retainer to arrange meetings with members of Congress and congressional staffers. Black Bag LLC reported receiving $25,000 from Corallo’s firm but did not disclose how much of that work was for Chagoury or what other clients the LLC might have performed work for.

Lobbying firm Kivvit LLC did not report any receipts from Corallo in FARA records but disclosed managing a Twitter account, providing public relations advice and media monitoring as part of the operation.

Another firm, 4Impact LLC, functioned as Chagoury’s liaison in the foreign influence efforts, according to the FARA records. Toufic Baaklini, one of Chagoury’s two associate’s listed in Justice Department filings, reported 4Impact LLC as his employer in FEC filings.

Chagoury was a top advisor to former Nigerian head of state Sani Abacha, who the Justice Department has described as a dictator, and described by Nigeria’s top anti-corruption prosecutor as a “kingpin in the corruption that defined Abacha’s regime.”

In 2014, the Justice Department seized more than $480 million in corruption proceeds hidden in bank accounts around the world after Abacha was accused of diverting millions of dollars from Nigeria’s central bank to overseas bank accounts of his family and associates, including accounts under Chagoury’s control.

Chagoury’s name was listed among attendees of meetings where bribes were allegedly discussed and, amid a probe of corruption under Abacha’s regime, Chagoury returned an estimated $300 million held in Swiss bank accounts to the Nigerian government to secure his immunity from prosecution in Nigeria.

Chagoury has denied any involvement in the bribery case, but he was known to work as an intermediary for Abacha and was nevertheless convicted in Geneva, Switzerland of laundering money and aiding a criminal organization in relation to the case in 2020.