Politics

Klobuchar issues non-denial denial in Daily Caller investigation of failure to prosecute Ponzi schemer

Operatives for Minnesota Democratic Sen. Amy Klobuchar are calling “inaccurate” a Daily Caller investigation tying her to Ponzi-schemer Tom Petters via political donations. Klobuchar failed to prosecute him as Hennepin County Attorney in 1999.

The Daily Caller reported Oct. 19 that documents show Klobuchar helped keep Petters out of prison for years by choosing to prosecute only his early co-conspirators. Petters’ scheme later grew to involve $3.65 billion in assets, and is the third-largest Ponzi scheme in U.S. history.

Those documents show Klobuchar had enough evidence to target Petters during the early years of his criminal enterprise. But Petters and his employees contributed more than $120,000 to Klobuchar’s campaigns for County Attorney and U.S. Senate.

After TheDC’s Oct. 19 report, Klobuchar’s U.S. Senate race opponent, GOP state Rep. Kurt Bills, demanded answers from the senator.

Now Klobuchar’s re-election campaign spokesman, Linden Zakula, has told news outlets in Minnesota that the Oct. 19 Daily Caller exposé is “inaccurate,” denying in some cases allegations that have not been leveled against the senator.

“Senator Klobuchar did not ask her county attorney staff or law enforcement to refrain from investigating or prosecuting Tom Petters,” Zakula said in part, according to the Minneapolis Star Tribune. “She was not presented with evidence for prosecution of charges against him.”

TheDC did not report either of those claims. But as the Oct. 19 report showed, Klobuchar obtained in her investigation that equally implicated Petters and his co-conspirators Richard Hettler and Ruth Kahn in a mutually beneficial and illegal financial scheme.

Klobuchar chose to prosecute only Hettler and Kahn.

Zakula also said the Hennepin County Attorney’s case against Hettler commenced seven months before Klobuchar was elected. According to the St. Paul Pioneer Press, Hettler faced charges of “theft by swindle for misappropriating funds from his brother’s estate” in April 1998.

“That case was opened and charges were filed before Amy [Klobuchar] was elected County Attorney,” Zakula added. “She simply agreed to add a charge of unpaid child support against him.”

Neither Klobuchar U.S. Senate office nor her re-election campaign, however, has denied that she chose not to prosecute Petters.

In January 1999, officers from Klobuchar’s office raided the home Hettler shared with Kahn. In that raid, Klobuchar’s officers retrieved promissory notes and other documents showing that Hettler, Kahn and Petters were working together.

Petters, however, was the one of those three providing — personally and through his company — financial contributions to sustain Klobuchar’s career.

Klobuchar’s team also hasn’t explained why she commenced an unconventional criminal prosecution in May 1999 against the documents themselves, a move that kept the evidence in her possession.

TheDC’s Oct. 19 report noted that financial papers exposed by Kahn’s bankruptcy tied her to Hettler and Petters, and that the bankruptcy proceedings had the potential to turn Petters’ business arrangements into statewide or national news. But with the key evidence under the legal control of Klobuchar, Petters was free to continue his criminal enterprise.

Klobuchar also fought to suppress a motion seeking to cross-examine Klobuchar and Petters about the disposition of the promissory notes — a motion that attorney Garrett Vail filed in June 1999. Vail was retained by a bank seeking to get its money back from Kahn.

After Kahn pleaded the Fifth Amendment to avoid incriminating herself, Vail sought to ask Petters and Klobuchar about the promissory notes. He also sought information about what records Klobuchar had seized from Kahn’s and Hettler’s home in her office’s January 1999 raid.

“We know that she had executed a search warrant, so she had proof and she had the records,” Vail said.

Judge Nancy Dreher denied Vail’s requests on a technicality, ruling that a bankruptcy trustee was the only party who should be asking those questions.

It’s unclear if Klobuchar filed a legal response to Vail’s request for a courtroom examination, but she and Petters were aware of Vail’s application.

“I served it on them,” Vail told TheDC on Tuesday.

“We need to hear from the Senator directly and not from spokespeople,” a campaign spokesman for Klobuchar’s opponent, Kurt  Bills, said. “There are too many victims of Tom Petters who deserve answers, as do all of her constituents.”

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