House Of Cards
By April Witt
The caller lied easily. He'd had practice. It was Raymond Reggie, a New Orleans businessman and Democratic activist who happened to be Sen. Edward Kennedy's brother-in-law. He also happened to be in a lot of trouble.
Reggie was calling for David Rosen, a Chicago-based political fundraiser. When Rosen's receptionist asked his name, Reggie responded, "Tell him it's his only friend in the whole wide world from Mardi Gras Town, U.S.A."
Reggie wasn't David Rosen's friend. Rosen just didn't know that yet.
This was August 29, 2002. Reggie was telephoning at the request of the FBI, to which he was beholden because of a spectacularly unsuccessful attempt at bank fraud. The bureau had Reggie on a hook and was using him as bait to try to prompt Rosen, a top fundraiser for Hillary Clinton, to implicate himself in a violation of federal election law. Rosen had no idea the FBI was secretly recording the call when he came on the line and heard his purported pal joke about the piped-in radio programming he'd endured on hold.
"Have you contemplated possibly just putting some jazz on?" Reggie teased.
"Yeah," Rosen said. "But I won't do it. I'm a stubborn NPR guy."
Rosen, then 35, was stubborn in a sunny, likeable Midwestern way. He had a stubborn faith in his ability to succeed through hard work, stubborn loyalty to his friends and a stubborn certainty that electing Democrats was good for the country. The boyish-looking Rosen once sold books door to door, a tough line of work in which only the resilient thrive. The experience left Rosen a valuable political property: a man unembarrassed to smile and ask anyone anywhere to write a check. Rosen had been national finance director of Hillary Clinton's 2000 Senate campaign, at the time the most expensive U.S. Senate campaign in history. In all, he'd helped raise roughly $100 million for Democratic candidates from the ward to the White House. He had every reason to expect fellow Democrats like Reggie might be grateful.
Instead, a deceptively jocular Reggie steered their phone conversation in a direction that his FBI handlers hoped would lead to damaging confessions: toward a mutual acquaintance named Aaron Tonken. An operatically manic Hollywood charity fundraiser, Tonken was so high-strung that Rosen liked to joke the guy was tri-polar. Tonken had facial tics as pronounced as his chutzpah. From nothing but gall and patter, Tonken had crafted an image of himself as the ultimate celebrity wrangler, able to deliver performers from Red Buttons to Natalie Cole to lend glitz to fundraising events. Tonken had been the force behind the Hollywood Gala Salute to President William Jefferson Clinton -- a star-studded August 2000 benefit for Hillary Clinton's successful Senate campaign.
It was Tonken who had arranged for an Internet entrepreneur named Peter Paul to co-host the gala. But Paul turned out to be a convicted felon. Not long after the gala, the media company Paul co-founded collapsed amid allegations of securities fraud. Paul hopped a plane to Brazil without so much as a presidential pardon in his suitcase. Sore, he sued the Clintons -- and Rosen, too -- alleging he'd spent nearly $2 million producing the gala -- five times more than campaign officials told the Federal Election Commission that the gala cost in donated goods and services. The reason Paul gave in his lawsuit for his generosity was even more startling: He wanted to buy access and influence and to entice the president to work for his company after leaving office. The Clintons, through their lawyer, denied any wrongdoing and fought unsuccessfully to extricate themselves from Paul's civil suit.
The plot and characters surrounding the Hollywood gala sounded like a darkly comic movie, a send-up of greed and corruption. Except that Paul's allegations of failed influence peddling had inspired real, live G-men to start investigating who had paid for the gala, how much and why. Now those FBI agents had made Kennedy's brother-in-law a bit player in the unfolding drama.
Reggie's faux-friend performance on the phone didn't yield incriminating statements. Rosen told Reggie he had no idea that Tonken had run up gala costs by catering to stars' demands for expensive perks in exchange for "donating" their performances at the gala.
"We would have had to report that" to the FEC as a campaign contribution, Rosen said as the FBI recorder spun.
"I mean, I knew he was doing shady [expletive], like saying to Cher, 'Cher, the president just called me and he needs you to perform "If You Could Turn Back Time" in between Diana Ross and before the . . . .' Then he'd call Diana Ross: 'The president just called me, and we need you to go before Cher's "If You Could Turn Back Time."' And he'd mention, like, specific songs that the president was requesting. That's how he got a lot of them . . . It turned out to be some shady [expletive]. But who knew?"
"Who knew?" turned out to be a $1.176 million question. Federal law enforcement officials eventually confirmed that the gala, night of a thousand egos -- when Cher sang "If I Could Turn Back Time," the president cried for the cameras and con artists hobnobbed with the most powerful couple in the world -- cost somebody at least $1.176 million to produce. Yet Hillary Clinton's joint fundraising committee eventually reported that the gala cost just $401,419 in donated goods and services.
Who knew? Did the Clintons know that all that love Hollywood-style had come with such a big price tag? In the end, the only person prosecutors charged with causing false federal election reports to be filed was down the organizational chart: Rosen. An L.A. jury recently found him not guilty.
Maybe the FBI targeted and taped the wrong guy. Or maybe the real culprit was a political fundraising system with one essential truth: In the scramble to fund a major campaign, politicians don't want to scrutinize each check-writing hand for dirty fingernails. The strange saga of the gala brings new meaning to one of the more memorable slogans from the Clinton administration: Don't ask, don't tell.
"It ought to give chills to the average American," Paul says.
Aaron Tonken, a doctor's son from Alpena, Mich., rode into Hollywood in 1992 in a battered Buick wagon. He was 26 and had been hawking Indian jewelry in Arizona. He was, by his own account, a high school dropout with $750 in his pocket, attention deficit hyperactivity disorder, obsessive-compulsive disorder, and those tics, which made his eyes scrunch and his head jerk unpredictably. "I wanted to be famous," he recalled in an interview.
Tonken wasn't a looker, but he sure could talk. At 15, his fame obsession prompted him to lift Jackie O's private phone number from a friend and cold-call her just to chat with a celebrity. "She was surprised, but very gracious," Tonken recalled in his 2004 memoir, The King of Cons. "I did most of the talking."
Once in Hollywood, Tonken claims, he talked his way into a job picking up after Zsa Zsa Gabor and her two dogs. Tonken hated those messy pooches. He didn't like Zsa Zsa much more. Tonken says he sold unflattering stories about the aging star to a tabloid. When she went on vacation, his story goes, he cut a deal with a local tour company. For a total of $3,300, he let busloads of tourists into Gabor's Bel Air estate. "It was a sight: star-struck tourists wandering through the dilapidated mansion, expressions of awe mixed with pity, stepping over dog turds and swatting fleas," Tonken wrote. "They got their money's worth."
Fleeing the wrath of Zsa Zsa, Tonken needed a new home and job fast. He moved into a homeless shelter, where he received one meal a day and free therapy. He spent much of his time schmoozing poolside at the Four Seasons hotel, where networking prospects were much better than at the shelter, he said.
In 1993, a tabloid reporter introduced Tonken to Peter Paul, a former Miami lawyer who was managing celebrities and org-anizing fundraisers. Paul had what Tonken craved: a head full of celebrities' phone numbers. And Tonken had a relentless manipulativeness Paul found promising. "I gave him a telephone and a Rolodex, and the rest is history," Paul recalled in an interview.
Paul said he watched in amazement as his new protege curried favor with a family of New Mexican billionaires by lining up celebrities to appear at the daughter's wedding. Charlton Heston -- who didn't know the bride or her parents -- agreed to read Bible verses during the ceremony; the band Kiss played for the reception, Paul said. "When I saw that, I said, this kid has talent."
Soon, Tonken recalled, he was calling up celebrities and inviting them to be his guest at expensive restaurants he couldn't afford. Restaurant owners let him run a tab in exchange for his bringing in celebrities, which was good for business. Once one freeloading celebrity agreed to be his guest for dinner, Tonken simply dropped that name to rope in the next prospect, and his guest list grew.
"In a land of moral imbeciles, I knew I could be king," Tonken wrote in his memoir.
While still living in the homeless shelter, Tonken began organizing charity fundraising events. Tonken figured that a lot of wealthy people wrote checks to charity only if it enabled them to rub shoulders with stars; a lot of stars showed up to rub shoulders only if paid off with cash and gifts. Paying off stars meant less money went to the charities, but Tonken says nobody seemed to care, least of all Tonken. "I realized early on that stars are for sale," he wrote. "You could buy them with a watch. And I would . . . I call it taking from the needy to feed the greedy."
Soon Tonken was passing out so much bling to lure celebrities to his events that he ran up astronomical tabs at luxury retailers. He owed $1 million at Cartier alone, he claimed. "It was like I was on crack," Tonken said. "The spending was an addiction, just like any other, and I couldn't break the habit because the alternative was far more horrifying to me: losing my relationships with the stars."
By the late 1990s, Tonken was shifting money desperately from one charity account to another, and when he couldn't cover, borrowing from friends and loan sharks, he said. "I would take receipts from one event, pass them through a bogus account, and then use the money to meet obligations from a previous event," Tonken wrote. "That was not only illegal, it was crazy." Tonken described his life as one "very shaky house of cards." So, naturally, he decided to stack the cards higher. He got into politics.
While lunching with Natalie Cole in New York City in 1998, Tonken and the singer landed an invitation to a cocktail party at the Fifth Avenue penthouse of Denise Rich, a wealthy pal of the Clintons. Rich later figured prominently in the scandal over the last-minute pardon President Bill Clinton granted to her ex-husband, felonious financier Marc Rich. Soon Tonken was invited back to Rich's for an exclusive Democratic National Committee fundraising luncheon with the Clintons. To get in, Tonken said, he wrote a check for a $50,000 donation. Tonken didn't have the cash, so he stopped the check right after lunch, he said. A Democratic fundraiser phoned a few times to collect, then gave up, Tonken said.
Apparently, being a deadbeat didn't hurt Tonken's political prospects. Before long, Tonken was helping Rich and others throw Democratic fundraising events. He was on a first-name basis with then-DNC Chairman Ed Rendell, who once penned a note saying, "Aaron . . . You're the best!"
Turned out, Tonken decided, Washington worked a lot like Hollywood: Figure out what people want, and score it for them, and they won't ask too many questions.
Standing in the dining nook of his Chicago home, David Rosen tossed a pair of presidential cufflinks in the air and grinned.
"Chum," he said, using the fishermen's term for little pieces of bait thrown in the water to attract bigger fish. "In the fundraising world we call this chum. These presidential cufflinks cost a few dollars to make, and I've seen billionaires do back flips for them."
Even the most ideologically driven donors love chum, Rosen says -- presidential pens, commemorative paperweights, 8-by-10 glossies of them grinning next to a politician, any little souvenir of their proximity to power. And Rosen, a natural salesman who projects wholesomeness and cheerful intensity, likes to see his customers satisfied.
He grew up in Chicago's answer to the "Edelweiss"-singing Von Trapp family from "The Sound of Music." Rosen's mom, a former nun who married a Jewish pediatrician, led David and his three sisters in a singing group called the Rosebuds. The Rosebuds performed gratis at nursing homes, churches, synagogues and schools -- any place Mom thought the Rosebuds might brighten someone's day. Being a Rosebud didn't always brighten Rosen's day. Kids at school teased him, and neighborhood toughs beat him up for being Jewish.
But Rosen was resilient. At 16, he took a summer job as a counselor at a Wisconsin resort. He was so upbeat, so good at encouraging families to partake of resort activities, that the owner offered him a full-time job. Rosen dropped out of high school and began supporting himself. He got his GED and stayed at the resort a year and a half.
Rosen was an undergraduate at the University of South Florida -- paying his way by delivering pizzas -- when he spotted a posting that changed his life. Southwestern Co., a direct sales company in Tennessee, was looking for students to sell educational books door to door. The company has long been a training ground for politicians, including several governors and former independent counsel Kenneth Starr. Southwestern teaches disciplined personal habits -- rise early, dress neatly, work long hours, and never quit, no matter how much you feel like quitting -- along with practical sales techniques.
"We used to tape a $5 bill to the showerhead in our headquarters," Rosen recalls. "The alarm would go off. You leap out of bed. There would be three guys living together, and we would literally fight and tackle and run and cut each other off. You get to the shower, you are bleeding. But you get there first and get that $5 bill. It wasn't about the $5. It was about waking up in the morning getting ready to go."
In 1985, Rosen broke the company record for rookie sales. He left the university and stayed at Southwestern for a decade. By the time he left the company, Rosen said, he was making sales at one out of every 1.2 homes he visited.
He moved back to Chicago after his father suffered a heart attack -- and began to study political science at DePaul University. A professor arranged for him to volunteer with the Clinton-Gore campaign beginning in 1995. He turned out to be as good at asking for political donations as he was at selling books and quickly rose in Democratic fundraising circles. In 1999, Rosen, then 32, was tapped to be national fundraising director for Hillary Clinton's Senate campaign.
It was a job Rosen wouldn't have gotten, and couldn't have survived, if he hadn't spent a decade selling books, he said.
"Books for me are such a metaphor for the hard path, the romantic job, the adventure," Rosen said. Spending 13 hours a day knocking on strangers' doors, risking failure in order to
succeed, is a "lonely place at first," Rosen said. "Then it becomes a place you are comfortable. It instills great confidence . . .
"Someone once told me that they test tires on automobiles by driving them around the track at different speeds," Rosen said. "At 30 miles per hour, some flaws pop out. At 50 miles an hour, more flaws pop out. And at 120 miles an hour, most of the flaws really pop out. Over my 10 summers selling books, I was going 120 miles an hour. I was able to work out a lot of my flaws. I learned about my strengths."
He would need them. Rosen was about to travel warp speed down an unfamiliar road in a borrowed Porsche.
Peter Paul's life had spooled out like a B-movie, complete with the usual cliches: double crosses and death threats. So he was a natural to land in Hollywood. How he came within a Tinseltown air kiss of the leader of the free world is a little harder to fathom.
Paul began his career relatively conventionally as an international lawyer. But conventionality bored him. Paul had big ideas -- he once spearheaded efforts to build a world trade center in Miami -- and an entrepreneur's drive to turn schemes into empires.
In the late 1970s, Paul was convicted both of possessing cocaine with intent to distribute and conspiring to defraud the Cuban government of $8.75 million in a bogus coffee sale, court records show. Paul and his co-conspirators tricked the Cuban government into buying 3,000 metric tons of coffee beans from them, even though the conspirators didn't have the beans. They bought a freighter, allegedly to ship the beans, all the while planning to sink it -- holds empty -- and claim that the beans were lost at sea.
In an article in the Miami Herald at the time, Paul suggested that he defrauded Fidel Castro to entertain himself with "a surrealistic experience, something a little grandiose, on an international scale, which would be a very large practical joke . . ."
Paul pleaded guilty, but tried to convince the judge in the case that he suffered from "hypomania," and couldn't get proper psychiatric care behind bars. He was sentenced to eight years in prison for the cocaine charge, and three concurrent years for the coffee scam. He served 40 months.
In 1983, Paul violated parole by traveling to Canada under a false identity and ended up pleading guilty in federal court to making false statements to customs inspectors. Paul went to prison in California. When paroled, he stayed in California. The resourceful Paul reinvented himself as a civic leader and charitable fundraiser, helping run California's celebration of the U.S. Constitution's bicentennial. He was also a Hollywood manager, counting among his clients romance-novel cover boy Fabio and actor Tony Curtis.
But prosecutors would later allege that for all his powers of self-reinvention, Paul hadn't changed much.
In 1998, Paul co-founded Stan Lee Media, a Hollywood-based Internet animation studio. The company was named for Paul's business partner, Stan Lee, creator of Spider-Man and the Incredible Hulk.
Almost from the start, prosecutors alleged, Paul and a few co-conspirators manipulated the market for the stock of Stan Lee Media: They artificially inflated the stock to a peak value of $350 million, creating a false appearance of demand by making transactions through and between accounts that Paul controlled but maintained in the names of others. Paul and his co-conspirators misused the brokerage account to borrow more than $4 million from Merrill Lynch, money prosecutors say they used to buy real estate, travel and make political contributions. Stan Lee was never implicated in the scheme.
Meanwhile, Paul had teamed up with his old pal Tonken, the celebrity-besotted charity gala impresario, to help promote Stan Lee Media. The felon and the deadbeat set their political sights high -- to become pals with the president and first lady -- and they succeeded.
It was easy, they said. All it took was money.
Tonken was invited to attend a small dinner with President Bill Clinton and the first lady in February 2000 in Los Angeles, he wrote in his memoir. The price of admission: a donation of $30,000 to $55,000 if he wanted to sit next to the president, Tonken said.
Tonken had Paul write a check for $30,000. Tonken brought Olivia Newton-John along to sing at the dinner. From that moment on, "I was treated like gold . . . or maybe fresh meat," Tonken recalled.
In an interview, Paul also recalled that dinner as a turning point. He brought a video camera, hoping to memorialize a private chat with the president. Before Paul had his footage, Clinton tried to leave, escorted by Secret Service agents. But Tonken boldly blocked their exit, and cajoled the president to go back and talk to Paul, Paul recalled. Clinton did. "I was impressed," Paul said. "Aaron Tonken had done it again, but at the highest possible level. Here you have the commander in chief turning on his heels because Aaron says he has to talk to me on tape."
For Tonken, political connections quickly became his new "secret weapon," he recalled. The most inaccessible A-list stars would take his calls if he was inviting them to an event with the president.
Rosen said he met Tonken and Paul in June 2000, when Paul agreed to underwrite a lunch in L.A. for Hillary Clinton's Senate campaign. Days later, Tonken flew to Chicago to attend another fundraiser, and again brought Newton-John to sing. Afterward Tonken met with two of the president and first lady's close associates: Kelly Craighead, a White House employee who was the first lady's trip director, and James Levin, a Chicago businessman who socialized with the president. Levin later told FBI investigators and federal prosecutors that Craighead had asked him to help get a feel for whether Tonken was on the level.
Over drinks, Tonken said he wanted to produce a big Hollywood salute to the president on the eve of the upcoming Democratic National Convention. According to Tonken, Levin urged him to consider making the event a fundraiser for Hillary Clinton's Senate campaign. Levin did not respond to requests for an interview for this article.
Tonken returned to Los Angeles and tried to convince Paul that they could produce the gala for $500,000. Paul predicted it would cost more, but in the end, he agreed to help fund it -- if he got what he wanted out of it.
Levin flew to California to meet Paul, he later told federal investigators, then on to Washington to discuss the proposed fundraiser with the president.
"After discussing it with Levin, President Clinton agreed to be involved in the event," an FBI report on the agents' interview with Levin said.
Rosen worried that there wasn't enough time left to plan and execute a big Hollywood bash involving many celebrities, he said. Even a modest "parlor party" in a donor's home can take more than a month to plan and execute, and the convention was about five weeks away. But Rosen's instructions came down from on high, he said: Do the Hollywood event with Paul and Tonken.
Nobody warned Rosen that his new partners had such colorful pasts, he said. To avoid embarrassing liaisons, Rosen said, Hillary Clinton's Senate campaign staff submitted a donor's name to a three-member vetting committee of high-ranking campaign officials. The campaign also forwarded the name to the Washington law firm of Ryan, Phillips, Utrecht & MacKinnon to be further researched, he said. Donors preparing to host an event -- and emblazon their name on the invitations -- received the closest scrutiny, Rosen said.
Tonken and Paul were vetted and passed, Rosen said. The instructions he received regarding Paul, he said, were: "No remarkable information found. Proceed."
"The vetting process failed," Rosen said in an interview. "I was put in harm's way."
David Kendall, the Clintons' lawyer, said in an interview that the campaign's law firm simply ran Paul's name through LexisNexis, the electronic database of news articles and public records, and found no mention of his convictions.
Paul is scornful. Even if vetters for the campaign erred, the Secret Service, charged with protecting the president, wouldn't have, he said. "How ridiculous would that be?" Paul asked. "They had my Social Security number in February of 2000." Kendall counters that the Secret Service didn't work for or report to the Senate campaign.
The vetting process had at least one built-in flaw. Levin, the presidential pal asked to watch out for the Clintons' interests, later entered an agreement with prosecutors to plead guilty to defrauding the Chicago Public Schools in a bribery, minority-contracting fraud and bid-rigging scheme, court records show. At the time he was assessing Tonken's character, Levin was cheating schoolchildren by overbilling the public school hundreds of thousands of dollars for snow removal. President Clinton so relied on Levin's judgment, Levin later testified, that he asked the businessman to fly to Los Angeles and be his eyes and ears as gala plans unfolded.
Paul alleged in his civil suit against the Clintons, which is still pending, that Levin came to L.A. to broker a deal in which Clinton would serve on Stan Lee Media's board after he left office in exchange for $16.5 million in cash and company stockLevin acknowledged in his FBI interview that Paul discussed wanting the president to work for Stan Lee Media. But Levin said he never brokered a deal between Paul and the president.
Paul, who delights in pointing out that he couldn't have cared less if Hillary Clinton was elected to the Senate, insists he wouldn't have spent one penny on the gala unless there was something in it for him. "I could have bought a boat," Paul said in an interview. "I could have bought a plane. Instead, I tried to buy the services of an ex-president as legally as possible."
Rosen landed at Los Angeles airport on June 30, 2000, and took a cab to meet Tonken at Stan Lee Media's office. In the building garage, Tonken showed Rosen a Mercedes and a Porsche, Rosen said.
"I want you to drive one of my cars," Rosen recalled Tonken telling him. "Do you want the Mercedes or the Porsche? Take the Porsche."
"I took the Porsche," Rosen said.
"Follow me," Rosen recalled Tonken saying. Rosen did, all the way to the pink stucco Beverly Hills Hotel. During Hillary Clinton's Senate campaign, Rosen had been living in New York in a 9-by-11-foot rented room with a bathroom down the hall. In L.A., he planned to crash with a relative.
"This is one of the finest hotels in Beverly Hills," Rosen recalled Tonken telling him as they sat on plush cushions in the lobby. "I want you to stay here . . . I want to do this for you. You are going to be working so hard on this event. Please let me do this for you."
Rosen was getting the full Tonken treatment. "He's an incredibly convincing guy," Rosen recalled. "He's kind of a pig. He's a guy who might have bare feet in the Beverly Hills Hotel and order a sundae in the lobby. He is slovenly. He is rude. But there is something endearing about this guy that's hard to put your finger on. He was so good at knowing what you were thinking. If somebody was lonely or needed something, he knew. He was incredible the way he would worm his way into people's lives in a very deep, personal way."
Prosecutors would later argue unsuccessfully that Rosen's use of the luxury hotel and car should have been reported to federal election officials as a contribution to Hillary Clinton's campaign. Rosen contended that he viewed them as personal gifts. "I thought he was my friend," Rosen said. "It was a con."
It was no con, Tonken said in an interview; it was politics as usual. "It's called buying access," Tonken said. "I was able to get Mrs. Clinton on the phone when I wanted. Mrs. Clinton was wonderful to me, engaging and warm. It all seemed sincere at the time. I'm sure she did it because everyone was whispering in her ear: 'Money! See him!'"
The Hollywood gala was shaping up as $1,000-a-ticket concert followed by a $25,000 per-couple dinner with the Clintons. Stan Lee Media was the official underwriter, although Paul would later claim in his lawsuit that he paid personally.
Under federal election law at that time, individuals were prohibited from donating more than $2,000 to a specific candidate. That was commonly known as "hard money" and could go directly toward paying campaign expenses, such as buying TV time to tout the candidate explicitly. Campaigns also benefited indirectly from "soft money." That was money donors gave to more general entities that promoted parties, platforms or get-out-the-vote drives; it was exempt from the $2,000 limit.
The Hollywood gala was being sponsored by New York Senate 2000 Committee, a joint fundraising venture authorized by the Clinton for U.S. Senate Committee, the Democratic Senatorial Campaign Committee and the New York State Democratic Committee. Gala ticket sales would benefit all three, with the "hard money" going to the Clinton campaign. Any goods or services donated to produce the gala -- from erecting a stage to hiring an orchestra -- were required to be reported to the Federal Election Commission as a political contribution. Theoretically, running up expenses could result in less hard money being available to the Clinton campaign after all the divvying was done. But given the complex accounting that results from federal election law, it was almost impossible to know that in advance.
Anyone hoping to hold down gala expenses, just to be prudent, had to reckon with Tonken, the big spender, who was in charge of lining up celebrity guests and performers. To entice some stars to participate, Tonken, as usual, threw money at them: cash, trips, gifts, perks. "The money spout was fully open," Tonken wrote in his memoir.
As the gala neared, Tonken was spending so much money so fast that even he lost track of it, he said. Cher would come only if Tonken sent a sizable private jet, a Gulfstream III or IV, to ferry her, Tonken said. So he did, at a cost of at least $30,000.
The night of August 12, 2000, was balmy. A perfect moon and purple gel lights lit lemon trees and eucalyptus on the $30 million estate of Ken Roberts, an actor-turned radio magnate who offered his spectacular pad for the gala. "It was a magical night," Rosen recalled. The winding road up Mandeville Canyon was so jammed with Jaguars, BMWs and Mercedes that actress Shirley MacLaine joked that the gala should have been called Gridlock 2000. "I got here from the 14th century in less time then it took me to get up Mandeville Canyon," MacLaine, who famously believes in reincarnation, quipped.
On the lawn, the first family and paying admirers sat on souvenir directors' chairs emblazoned with the gala name and date. On stage, entertainers sang, joked and praised the president as reaction shots of the first family were projected on a giant screen.
A video of the event shows that the president chuckled when Cher admitted she didn't vote for him, and would sing "If I Could Turn Back Time" in apology. He sang along as Diana Ross belted out "Ain't No Mountain High Enough." He wiped away tears when Melissa Etheridge said that Clinton had brought such a spirit of openness to the land that she was inspired to announce during his inauguration festivities that she was gay.
Through it all, Paul sat beaming in the front row right next to the first family, photos of that night show. In one, Paul is at the president's right, with Clinton's hand resting familiarly on his shoulder. To Clinton's left, is Paul's wife, Andrea, a tall, striking blonde, a presidential arm wrapped tightly around her waist.
"It was the apogee of my career," Paul recalled.
Three days later, Rosen was at a party thrown by the Democratic National Convention chatting with a friend who worked for the DNC, when his companion received a message on his BlackBerry. The Washington Post's gossip columnist, then Lloyd Grove, had an item noting that one of the gala's producers, Paul, was a convicted felon. "Is Hillary Clinton soft on crime?" the columnist asked.
In a statement to Grove, Paul suggested that his conviction for defrauding the Cuban government in the coffee case was a covert U.S. government-sanctioned anti-communist action gone awry.
The next day, Grove published a new item: Federal Election Commission records showed Paul had personally donated $2,000, the maximum allowed, to the first lady's Senate campaign. A campaign spokesman quickly announced that, in light of revelations about Paul's criminal history, the campaign was sending Paul his $2,000 back.
Nobody mentioned returning the mega-bucks that the company Paul co-founded had supposedly just spent underwriting the gala.
Despite the embarrassing publicity, Paul did get nice thank-you notes from the president and the first lady. "Thank you so very much for hosting Saturday night's tribute to the President and for everything you did to make it the great occasion that it was," Hillary Clinton wrote. "We will remember it always."
Paul would make sure she didn't forget.
Over the next several weeks, Paul later claimed, he spoke to both Tonken and then-DNC Chairman Ed Rendell about getting a presidential pardon for his past felony convictions. Paul made the allegation in his original suit against the Clintons, but omitted it from an amended version. When Rendell telephoned to ask for a $200,000 contribution for the National Constitutional Center in Philadelphia, Paul asked about the status of his pardon request, Paul said. According to Paul's original lawsuit, Rendell said he was working on it. Rendell, now governor of Pennsylvania, declined to comment for this article.
Paul had been invited to the White House to attend the last state dinner of Clinton's presidency, the black-tie India State Dinner. Given the publicity about his criminal history, Levin suggested it would be better if Paul didn't attend, Paul said. By contrast, Tonken was not only invited to the India State Dinner, he said, but the Clintons were effusive in their thanks, leaving him personal phone messages, sending him letters and gifts. "I have presidential cufflinks," Tonken said.
White House snubs were the least of Paul's problems. Stan Lee Media's stock price, which had peaked around the time of the gala, plummeted by the end of 2000. Stan Lee Media filed for bankruptcy. As securities investigators began asking questions, Paul flew off to Brazil -- for business reasons, he said.
In January 2001, the New York Senate 2000 Committee filed a report with the FEC stating that the Hollywood gala had been produced with in-kind contributions -- meaning goods and services, not cash -- of $401,419. The donor for $366,564 of that was listed as Stan Lee Media.
Sitting in Brazil fuming and scheming, Paul tried to trade what he knew about the financing of the Hollywood gala in exchange for federal prosecutors giving him immunity for securities fraud, court records and correspondence show.
In February 2001, Paul started contacting federal law enforcement officials to encourage them t0 look into the gala. They suggested he get a lawyer, Paul said. He wanted one who wouldn't shy from a fight with the Clintons. Surfing the Internet, Paul found Judicial Watch, the legal foundation that sued the Clinton administration several times and variously represented Paula Jones and Gennifer Flowers.
In June 2001, a federal grand jury in New York indicted Paul on two felonies in connection with trading of Stan Lee Media stock. That same month, Paul -- represented by Judicial Watch -- sued the Clintons, Tonken and Rosen, alleging that he'd been induced to personally fund the gala with false promises of business dealings with the president. In his civil suit, Paul alleged that he'd personally spent nearly $2 million on the gala. Paul said that since his contribution hadn't been properly reported to the FEC, he wanted his money back.
In early August, a Justice Department official in Washington wrote Judicial Watch, saying that the department "cannot discuss any resolution of the indictment pending against your client,
Peter Paul, while he remains a fugitive."
Soon afterward, Paul, who denies he was ever a fugitive, was shopping in downtown Sao Paulo when Interpol agents arrested him. Paul would spend more than two years in Brazilian prisons pending extradition to the United States. "I was in a dungeon," Paul said. "There was one bathroom for 112 people. I didn't have any hot water for 2 1/2 years."
Tonken's luck was running out, too. The California attorney general's officehad begun investigating whether he'd stolen from several high-profile charity fundraising events in the state. Like Paul, Tonken was trying to make a deal. He talked his way into the middle of multiple investigations concerning everything from financing for the Clinton gala to the many gifts he had given over the years to celebrities who may, or may not, have reported them on their taxes.
Tonken contended that he'd once given Kelly Craighead, one of Hillary Clinton's closest aides, a gold-and-diamond watch from Beverly Hills Watch Co. At the time, Craighead was a White House employee and legally prohibited from accepting such gifts. Craighead did not return repeated phone calls seeking comment for this article.
A year later, when FBI agents knocked on Tonken's door to ask about the gala, "one of their first questions concerned personal gifts," Tonken claimed in his memoir. "I told Kelly that over the phone, and the next day, without a word, she FedEx'd back my watch. It still looked new, so I gave it to some other celeb."
In August 2002, Raymond Reggie, Sen. Kennedy's brother-in-law, made his FBI-recorded call to David Rosen at his Chicago-based fundraising company.
Judicial Watch had shown federal prosecutors invoices and canceled checks from Paul documenting one of his central claims: that the Hollywood gala costs several times more to produce than had been reported to federal election officials.
So FBI agents were trying to answer the $1.176 million question: Who knew?
Paul and Tonken each had much the same answer: Everyone closely involved in the gala, including the Clintons, had to have known. Tonken even claimed that he'd once buttonholed Hillary Clinton at the back of a van on the campaign trail and, in an effort to impress her, bragged about all that had been spent on her behalf.
Kendell, the Clintons' lawyer, responded, "In so far as Peter Paul is making allegations, we've denied them and will continue to deny them . . . there is absolutely no wrongdoing."
On December 4, 2003 -- more than three years after the gala -- Rosen was secretly indicted on four felony charges stemming from the underreporting of gala costs to federal election officials. Rosen hadn't compiled or signed any reports to the FEC, but prosecutors contended that he caused false reports to be filed by feeding mis-information to campaign officials.
It wasn't until January of this year that Rosen's indictment was unsealed. The fundraiser lay in bed at night with his wife listening to TV news reports about the alleged misdeeds of "Hillary Clinton's top money man."
Rosen started a new fundraising venture: his legal defense fund. As his legal bills mounted, Rosen signed promissory notes to old friends for more than $1 million.
Hillary Clinton's lawyer, Kendall, issued a statement saying that they trusted that Rosen would be cleared. But Rosen kept getting bad news.
This spring, three weeks before Rosen's trial was to begin in Los Angeles, one of Rosen's lawyers called to say that Jim Levin, the Chicago businessman, would be testifying against him. Levin, embroiled in his own legal problems, made a deal with prosecutors to plead guilty to defrauding Chicago's school system and cooperate in other investigations to try to avoid prison, court records and testimony show. According to FBI interview notes, Levin said that he knew gala costs had skyrocketed -- and so did Rosen.
On the eve of the trial, Rosen's lawyers urged him to take a deal, Rosen recalled. If Rosen pleaded guilty to one felony, he could avoid serving any time in prison. Rosen refused.
"I was willing to be convicted of a felony -- after I'd fought the battle," Rosen said. "I was willing to fail. But if I pleaded guilty without being able to defend myself, I knew I would regret that decision for the rest of my life."
"You're David Rosen?" Rosen recalled Stan Lee asking him when he met him in Los Angeles just before his trial.
"I thought you'd look more like John Dillinger."
Judicial Watch representatives sitting in the courtroom had much the same reaction, they said. The boyish-looking Rosen seemed like a disappointingly small fish for prosecutors to be netting in the case that Judicial Watch officials once hoped would bring down Hillary Clinton.
Prosecutors told the jury that Rosen feared reporting the high cost of the gala accurately might mean Hillary Clinton's Senate campaign would net less money.
"This case is about the public's right to know who is paying how much to their elected officials,"
Assistant U.S. Attorney Daniel Schwager told the jury. "The case is about the public's right to know how much Peter Paul is paying to a national campaign . . . This case is about the public's right to know the truth, and the defendant David Rosen's continued and intentional obstruction of that public right."
The defense argued that Rosen had no idea about the gala's true costs because Paul and Tonken were crooks and con men who hid expenses for their own nefarious reasons -- and Rosen was just one more of their innocent victims.
Neither the defense nor prosecution called Paul or Tonken to testify.
For all the glitz of the gala, trial testimony was often dull recitation of federal election law and the calculations that fundraisers make to determine how much an event nets in hard money versus soft. Even the judge was occasionally confused and cracked that it would be more interesting to read the complete IRS code. Witnesses for the defense and prosecution agreed, ironically, that Hillary Clinton's campaign didn't, in the end, benefit financially from underreporting of gala costs. Her campaign netted a paltry $57,000 out of $1.1 million raised.
Levin testified that, while in Los Angeles to oversee gala preparations at the request of President Clinton, he heard Paul complain loudly about spiraling costs. Levin also testified that he heard Rosen, frustrated and appalled by wild gala expenditures, vow to hide them. According to Levin, Rosen said, "The cost of this event will never be the cost of this event."
Under cross-examination, however, Levin conceded that he'd never mentioned the comments he claimed to have heard to his "dear friend" President Clinton, who'd asked him to be his eyes and ears in L.A.
Rosen took the stand to refute accusers and testify that he wasn't required to verify individual gala expenses, such as how much Tonken paid for gift bags stuffed with CDs for guests. Rosen merely accepted figures given to him by Tonken's event planner, or asked campaign officials to get the figures from the event planner directly.
Jurors deliberated five hours before finding Rosen not guilty. "We didn't think he was a dove," one juror told the New York Sun at the time. "I think everyone lied."
Hillary Clinton called to congratulate Rosen. It was the first time he'd spoken to her in more than two years, he said. Given the various legal cases swirling around the gala, it hadn't been wise for them to talk, Rosen said. "They wanted my blood to spill on her shoes."
Rosen's trial is not the final act in the saga of the Hollywood Gala Salute to President William Jefferson Clinton.
Paul vows to spend the rest of his life trying to expose what he bombastically calls one of the greatest campaign frauds in U.S. history.
He pleaded guilty in March to one felony in connection with his Stan Lee Media stock transactions. While awaiting sentencing, Paul is living in North Carolina on welfare, he said. His family receives food stamps. He suffers from chronic bronchitis and arthritis, the legacy of his time in rough Brazilian prisons, he said.
Paul is pursuing his civil suit against the Clintons and expects oral arguments to be heard in the case later this year. He's also feuding with his former friends at Judicial Watch. Paul accuses the group of letting his criminal case languish while they used his civil suit to raise more than $15 million in donations for their coffers from people who dislike the Clintons.
Judicial Watch, which refutes Paul's allegations, recently asked the Senate ethics committee to sanction Hillary Clinton for low-balling gala costs in FEC reports. The Senate panel has not responded.
The campaign, as of late last month, had not filed new reports to reflect the evidence the FBI offered in the Rosen case indicating that the gala cost more than $1 million to produce.
The campaign is reviewing the matter, Kendall, the Clinton attorney, said. "If there is a need . . . amendments will be made. The evidence at the Rosen trial demonstrates how complicated the FEC reporting requirements for in-kind contributions are. It shows that even experts have disagreements about the booking of those contributions."
Aaron Tonken, now almost famous, pleaded guilty to stealing from several charities and is serving more than five years in a California prison. "I'm very happy," Tonken said in an interview from Taft Correctional Institution. Prison is blissfully stress-free compared with ducking loan sharks, catering to spoiled stars and trying to please all those insistent government investigators, he said. Tonken's weight has dropped from nearly 300 pounds to 165 since he went to prison. He said he runs four miles daily. A prison psychiatrist and psychologist are even helping him try to get rid of his facial tics, he said. Tonken is still a celebrity buff, though. "I met Anthony Pellicano," the famed Hollywood private eye turned felon, Tonken said breathlessly. "The guy they wrote 'Blow' about is here, too."
Rosen, now 38, is left with $1.4 million in legal bills. His defense cost even more than prosecutors say the gala did. Rosen's company, which had 11 employees before he was indicted, now has just two. He has two clients. The gala, one night of a thousand egos, took five years from his life. Some people say Rosen has been ruined. Those people never sold books door to door.
Rosen lives these days in a simply furnished space above his Chicago headquarters. Upstairs, his guitar rests alongside sheet music for the folk songs he and his bride sing together: Rosebud duets. Downstairs, the "money pit," the nerve center for frenetic fundraising calls, is silent for now.
People ask Rosen if he's quitting the fundraising business. He's proud to tell them that he just opened a second office, this one in Washington. In some ways, Rosen said in a recent interview in his home, it seems as if he is in a familiar place. He feels as if he's way out on a country road. It's 4 p.m., and he hasn't sold a book all day. His bags are heavy, but he knows his strength. And he knows that there's nothing wrong with a fellow wanting to quit -- just as long as he doesn't quit.
Rosen knows what he's got to do, he said, sitting at the wooden table in his dining nook. He's got to work harder to succeed. He's got to knock on some doors.
Suddenly, Hillary Clinton's top money man began to sing. No, not sing to the FBI. Not sing to the FEC. The only boy Rosebud tapped his foot and slapped out the rhythm to a ditty he learned long ago selling books.
"Seven-fifty-nine is knockin' time," Rosen sang, "but you can't quit knockin' til half-past nine."
April Witt is a staff writer for the Magazine. She will be fielding questions and comments about this article Monday at 1 p.m. at washingtonpost.com/liveonline.comments about this article Monday at 1 p.m. at washingtonpost.com/liveonline.
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