Bob Dole's Vice Chairman Pleads
Guilty to Election Fraud!

Dole's Man Caught in Election Fraud

By JOE STEPHENS Staff Writer[c]
Kansas City Star
Date: 07/10/96 22:18

A former vice chairman of Bob Dole's presidential campaign agreed Wednesday to pay a record $6 million in fines for using workers to funnel illegal political contributions to Dole's campaign and other political committees.

Boston businessman Simon Fireman and his company, Aqua-Leisure Industries, will plead guilty to felony charges under a plea bargain reached with federal prosecutors. The fine will be 10 times larger than the previous record in a campaign-finance case.

Prosecutors also will recommend that the 70-year-old New England millionaire spend 6 months in prison.

"This was a repeated effort to thwart the basic principles of our campaign-finance system," said Joe Savage, the lead prosecutor.

Fireman resigned as a national vice chairman of finance for Dole last month after The Kansas City Star reported that employees at Aqua-Leisure had been repaid for their contributions to Dole. The scheme camouflaged the true source of the money - - Fireman -- and circumvented federal laws that limit contributions from individuals to $1,000.

On Wednesday federal prosecutors in Boston filed 74 felony charges against Fireman, his pool-toy manufacturing company and Fireman's executive assistant, Carol Nichols.

They charge that last year Fireman and Nichols used a Hong Kong company to channel $69,000 to their relatives and co-workers, who in turn sent individual donations to Dole's campaign. The scheme transformed Fireman's small company of 35 employees into perhaps the largest single identifiable source of contributions to Dole's campaign.

Fireman and Nichols used a similar scheme to filter $24,000 to the Republican National Committee in 1992, $21,000 to George Bush's 1992 re-election campaign and $6,000 to Joe Kennedy II's 1993 congressional campaign.

In all, the illegal contributions totaled $120,000. Prosecutors called it one of the largest campaign money-laundering operations in U.S. history.

Fireman gave to the Dole camp in hopes of buying a high government post, said Savage, an assistant U.S. attorney in Boston.

"He was not restricting himself to an ambassadorship, but an ambassadorship was one of the options," Savage said. "There is no evidence he communicated his desire to the Dole campaign."

Dole and Jo-Anne Coe, his campaign finance director, apparently knew nothing about the money laundering, Savage said. But public watchdog groups noted that the scheme was similar to one engineered in the late 1980s by Dave Owen, who was the top fund-raiser for Dole's 1988 presidential bid.

Nelson Warfield, Dole's press secretary, said in a written statement that the campaign would transfer the illegally collected donations to the U.S. Treasury.

The plea bargain, Warfield said, "not only brought swift justice, but also underscores that the Dole campaign, which fully cooperated with the investigation, was not involved in Mr. Fireman's pattern of improper contributions to both Republicans and Democrats....

"While we clearly would have liked to have avoided this incident, we are proud of how this matter has been handled."

Clinton spokesman Joe Lockhart called on Dole to provide details about his personal relationship to Fireman.

"Bob Dole also needs to tell us what steps he's taking to make sure criminal behavior no longer happens in his campaign," Lockhart said. "There's a serious issue of criminal activity within the Dole for President campaign."

The plea bargain requires Fireman to plead guilty to 11 out of 74 felony counts and personally pay a fine of $1 million. The deal allows prosecutors to recommend to a judge that Fireman be sentenced to 6 months in prison.

Aqua-Leisure agreed to plead guilty to 70 felony counts and pay a fine of $5 million. Nichols plans to plead guilty to one felony charge and pay a fine of $7,500. She could be jailed for up to five years, although prosecutors agreed to recommend a less er period of home confinement.

"I am stunned at the breadth of that agreement," said Ellen Miller, executive director of the Center for Responsive Politics, a Washington watchdog group.

"An agreement of this size should send a chilling effect down anybody's spine."

If a federal judge approves the plea, as expected, it would mark the most severe penalty ever in a campaign-finance case, experts said.

The largest previous fine apparently came earlier this year in California, when Hyundai Motor America agreed to pay $600,000. It admitted using employees to funnel illegal contributions to U.S. Rep. Jay Kim of California.

Fireman still faces investigation by the Federal Election Commission, which can levy its own fines. The largest commission penalty to date was $550,000, against Prudential Securities Inc. No criminal charges were brought.

The plea agreement also was notable for its speed, coming just 10 weeks after The Star revealed the payments. Most investigations into campaign-finance violations stretch out for years.

Fireman's response

Aqua-Leisure workers gave sighs of relief when told of the deal. Many feared that Fireman, who has a history of filing lawsuits against adversaries, might emerge from the investigation unscathed and then seek revenge for their testimony before a Boston grand jury.

Wednesday morning Fireman met with his workers and distributed a personal memo at his plant headquarters in the outskirts of Boston.

A source close to Aqua-Leisure who attended the meeting said Fireman assured workers the fine would have no significant effect on the company.

Fireman declined to answer questions Wednesday. But in a written statement, he said he was "eager to move forward."

"I have accepted this agreement," Fireman said, "to end the pain and suffering of my wife, other family members, my dear friends and Aqua-Leisure and its employees.

"In addition, I cannot further endure being used as a political tool."

His attorney, Thomas Dwyer Jr., called it "a hypertechnical case" with an oversized fine. He said Fireman would ask to serve any resulting sentence at home.

Savage, the prosecutor, responded with sarcasm: "The only thing hypertechnical here is the length Mr. Fireman went to hide the contributions. It's hard to get it more secret than this."

Fireman, he said, erected an elaborate scheme to disguise the source of the money.

In 1985, Fireman used his employees to set up a front company in Hong Kong named Rickwood Ltd. The company established a secret trust at a U.S. bank and then used wire transfers from Rickwood to fill it with millions of dollars.

Fireman's employees in Boston withdrew the cash in small amounts to evade laws requiring that large cash transactions be reported to federal officials. Nichols then distributed the cash to Aqua-Leisure's employees, its sales representatives and their families. They in turn wrote personal checks to the political campaigns.

The formal charges against Fireman include conspiracy to violate federal law, contributing in the name of another, contributing more than $1,000 to a campaign, contributing more than $25,000 in a single year and giving on behalf of a corporation.

Fireman's scheme became public in April after The Star conducted a computer-aided study of tens of thousands of individual campaign records. The study identified an unusual pattern of giving among Aqua-Leisure employees and their families.

The Star found that persons linked to the Avon, Mass., company sent 55 checks to the Dole campaign between February and September of last year. At least 14 Aqua-Leisure workers contributed, as did 11 of their family members.

Each gift was for $1,000 -- the legal maximum. And the gifts came not only from company executives, but also from secretaries, a bookkeeper, a receptionist and a warehouse manager.

Long known in politics

Fireman, tall with a mane of white hair, has been well-known in Republican politics for more than a decade. Acquaintances said he spoke openly about his desire to become a foreign ambassador, although on Wednesday his attorney denied it.

In the 1960s, Fireman inherited New England's oldest ship chandlery, Marine Hardware and Supply. A decade later he founded Aqua-Leisure and developed it into a nationwide distributor of inflatable pool toys and physical fitness equipment.

Today the privately held company has annual sales of $9 million and distributes a large share of the world market in swimming goggles and flippers.

Fireman used his financial success to catapult into politics, lavishing contributions on state and federal candidates. In return, he reaped prestigious appointments.

In the 1970s, President Jimmy Carter named Fireman to the U.S. Domestic Trade Advisory Council. When Ronald Reagan announced his candidacy for president, however, Reagan adviser Lyn Nofziger persuaded Fireman to redirect his contributions to the Republican Party.

Reagan designated Fireman vice chairman of his inaugural committee. And in 1983, Reagan appointed him to the U.S. Advisory Committee for Trade Negotiations. That led to a stint as a director of the federal Export-Import Bank.

In 1992, Fireman served as a national vice chairman of finance for President George Bush's re-election campaign. He was host of a $5,000-a-person fund-raiser, and then-Vice President Dan Quayle attended a fund-raising reception at Fireman's summer home .

Today the 70-year-old divides his time among oceanfront homes in Boston, Cape Cod, Palm Beach, Fla., and Hong Kong. He has made a name in those cities for both his philanthropy and his fits of anger.

He made headlines last year in Boston by giving $2 million to area hospitals. But about the same time a Boston newspaper reported he had been banned from Siro's, a swank waterfront bistro.

Fireman often booked restaurant reservations there under the name "Mr. Fireman from Reebok," the article said, in reference to his better-known nephew, Reebok International Ltd. Chairman Paul Fireman. The ruse was exposed on his final visit, when Simon Fireman reportedly insulted restaurant workers.

"He was saying, `Do you know who I am? I'm a very prominent man. I own Reebok,' " the restaurant owner said at the time. "He pushed my husband into another table and started yelling, `I can buy and sell you!' and he's still yelling at my employees, calling them incompetent and even ugly."

As he was escorted off the premises, Fireman reportedly threw $20 bills at waiters and waitresses to make amends.

Fireman's legendary temper also was evident in April, when The Star telephoned him in an attempt to arrange an interview. Fireman responded with insults and curses but did not answer questions.

"You are not now working with some jerk on the local level," Fireman shouted. "You are a liar, and I have nothing more to say to you."

Then he hung up.

Staff writers James Kuhnhenn and Jake Thompson contributed to this story.

All content 1996 The Kansas City Star

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