BREAKING NEWS - Additional Reporting

The following is the Boston Globe's more extensive coverage of the charges filed against an employee of the Winn Companies, developer of the Wampanoag Mills Low Income Apartment development, for funneling illegal campaign contributions to various elected officials.

File this under "If it happened there, it's probably happening here as well"
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Feds charge Boston real estate executive
 with illegal campaign contributions


 August 31, 2010 05:25 PM
 By Jonathan Saltzman and Casey Ross, Globe Staff
A top executive of the developer behind the failed $800 million Columbus Center project in Boston was charged today in federal court with orchestrating a scheme to funnel $12,000 in illegal campaign contributions to Massachusetts candidates running for Congress.

Martin Raffol, 54, executive vice president of the residential arm of WinnCompanies, also allegedly funneled more than $30,000 in illegal campaign contributions to candidates running for state and local offices to advance the business interests of the company, although he was not charged with a crime with those donations, according to US Attorney Carmen M. Ortiz.

In a statement, Ortiz alleged that Winn executives sought campaign contributions from others "primarily to advance the business interests of the company, including to obtain support for public financing of a large-scale, mixed-used development project within the city of Boston.''
The allegations were contained in a charging document called an information. Prosecutors typically use that document when a plea agreement has been reached.
Raffol's attorney, Douglas S. Brooks, said in an e-mail, "As an employee, Marty was directed to raise large amounts of money for politicians. The pressure was intense and in his attempts to satisfy these directives, some of the contributions violated federal campaign laws and regulations. Marty never personally benefited from these efforts."

The charge is an outgrowth of the federal corruption case against former state Senator Dianne Wilkerson who has pleaded guilty to attempted extortion charges stemming from $23,500 in bribes that she took, according to prosecutors. She awaits sentencing.
WinnCompanies, a nationally known developer of affordable housing whose headquarters is in Faneuil Hall, issued a statement today saying it placed Raffol on administrative leave when it learned about a federal investigation late last year and fired him today.

The company did not address the government's assertion that Raffol was acting at the direction of his bosses. WinnCompanies said that ``immediately after learning of the allegations, the company took steps to ensure that our internal controls were strengthened and such behavior will not occur in the future.''

Former WinnCompanies chief executive Arthur Winn previously acknowledged to the Globe that he gave Wilkerson $10,000 in 2004 when he was trying to advance the Columbus Center development. He said the contribution was not meant to influence Wilkerson's public support of the project but was a gift to help a ``close friend'' with outstanding tax debts.
Jonathan Saltzman can be reached at jsaltzman@globe.com

Here is the text of the statement from the U.S. Department of Justice:

A Boston based real estate executive was charged today in federal court with engaging in a scheme to conceal illegal campaign contributions made to federal campaign committees. He is also charged with witness tampering.

Assistant Attorney General Lanny A. Breuer of the Criminal Division, United States Attorney Carmen M. Ortiz and Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation - Boston Field Office, announced today that MARTIN RAFFOL, 54, of Natick, was charged with one count of engaging in a scheme to conceal material information from the Federal Election Commission.

RAFFOL served as Executive Vice-President for a Boston company that provided management services to a portfolio of real estate holdings, including several publically subsidized housing communities in Dorchester and Roxbury. The Information alleges that as part of its business, executives from the company actively solicited campaign contributions from individuals for elected candidates for federal, state and local office throughout the years. These executives did so primarily to advance the business interests of the company, including to obtain support for public financing of a large-scale, mixed-use development project within the City of Boston. The Federal Election Campaign Act limits the amounts individuals can contribute to election campaigns and political campaign committees, prohibits corporations from making direct contributions to federal candidates, and requires the true identity of each contributor to be disclosed.
It is alleged that, as part of an effort to increase the amount of campaign contributions to candidates who supported the company’s projects or who might support these projects in the future, executives and senior management directed RAFFOL to solicit campaign contributions from vendors who regularly did work for the company.

RAFFOL in turn allegedly engaged in an ongoing scheme whereby he reimbursed the vendors for thousands of dollars of campaign contributions he solicited from them. This included vendors who provided general contracting services, energy services, and security services. According to the Information, as a result of RAFFOL’s scheme, the true source of these vendor’s campaign contributions were disguised from the FEC, similar state authorities, campaign committees and ultimately, the public.

U.S. Attorney Ortiz said, “Transparency is the cornerstone of federal campaign financing.

The public has a right to know the true source of financial support for its elected officials.”

In total, RAFFOL allegedly caused over $12,000 in illegal campaign contributions to candidates running for federal office, specifically candidates for the U.S. House of Representatives. It is further alleged that he also caused over $30,000 in illegal contributions to candidates running for state and local office, including candidates for Governor, Lieutenant Governor, Secretary of State, State Senate, House of Representatives, District Attorney, Mayor of the City of Boston and Boston City Council. This scheme caused numerous reports, which falsely indicated the source of these contributions to be unwittingly filed by the relevant political committees with the FEC and similar authorities. There is no evidence that the federal campaign committees listed in the Information had knowledge of RAFFOL’s reimbursement scheme.

The Information further alleges that RAFFOL engaged in witness tampering to conceal the illegal campaign contribution scheme and to prevent law enforcement from learning of the scheme. In particular, RAFFOL instructed a cooperating witness to lie to authorities if authorities questioned him about the campaign contribution scheme.

If convicted on these charges, RAFFOL faces up to five years imprisonment, to be followed by three years of supervised release and a $250,000 fine for the false statement charge, and 20 years imprisonment, to be followed by three years of supervised release and a $250,000 fine for the witness tampering charge.

The case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney James Dowden of Ortiz’s Economic Crimes Unit and Senior Litigation Counsel William M. Welch II of the Criminal Division.

The details contained in the Information are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.


And here is the statement from WinnCompanies:
Late last year, WinnCompanies was informed that Martin Raffol, Executive Vice President of WinnResidential, was the subject of an investigation by the U.S. Attorney’s Office in Boston. Immediately upon learning this, Mr. Raffol was placed on administrative leave pending the outcome of the investigation. Based on today’s court filing, which charges Mr. Raffol with violations of federal law, we have terminated his employment. We appreciate Mr. Raffol’s many years of service to our clients and the residents of our properties. In addition, immediately after learning of the allegations, the company took steps to ensure that our internal controls were strengthened and such behavior will not occur in the future.

Over its forty year history, WinnCompanies and its 2,500 employees have provided affordable, safe and quality housing in over 300 communities across the country. At Winn we understand that the relationships we have with our clients and residents are the core of our business, and that it is our obligation to maintain the highest standards so that we can continue to make positive contributions to the communities we serve.