Former DNC Chairman Terry McAuliffe, the current Democratic nominee for Governor of Virginia, chose not disclose his investment into an insurance scheme run by a businessman who was stealing the identities of terminally ill patients on his Virginia Board of Elections Statement of Economic Interest during his 2009 run for Governor.
McAuliffe did not know the particulars of the scheme run by Joseph Caramadre, who plead guilty in the case last year.
According to his spokesman Josh Schwerin, McAuliffe invested $33,000 into the annuity system from which he received $80,000 back. Last week McAuliffe donated $47,000 to the American Cancer Society, the equivalent of the profit he made from the short term investment. (McAuliffe also donated an additional $27,000 which was the equivalent of campaign donations received from Caramadre)
McAuliffe, based on consultation with his accountant, determined that the investment was no required to be disclosed on his 2008 statement of economic interest.
"The accountants who prepared, and attorneys who reviewed, Terry's disclosure determined that this was not something that fit the criteria for needing to be included on the SEI," said Schwerin.
Republicans believe McAuliffe is guilty of a serious ethics violation for not disclosing the investment. In part- because the indictment filed against Caramadre indicates that McAuliffe (correctly listed as "T.M" on page 57 of the indictment) received a check for $113,057.
In a letter to the Chairman of the State Board of Elections, Republican Party of Virginia Chair Pat Mullins asks for an explanation for the difference between the check in the indictment and the level of profit McAuliffe claims to have received.
"Either McAuliffe invested or profited more than he has admitted, or he must have had a profit-sharing agreement or investment pooling arrangement with Caramadre that covers the remainder of that check," wrote Mullins. "Such an agreement is effectively a partnership, security, or so-called death-put bond and therefore would necessitate SEI disclosure."
Mullins does not have any concrete evidence that there is something amiss with the disclosure beyond the discrepancies in the indictment amount and the amount McAuliffe donated to charity, but he offers the BOE some potential explanations that, not surprisingly, would put McAuliffe in violation of the State's ethics laws.
McAuliffe's team remains firm that the candidate was not required to disclose the investment in 2008. They have said from the beginning that he was duped by Caramadre.
"Terry was one of hundreds of passive investors several years ago and had no idea about the allegations against the defendant - who, at the time, was widely respected by business leaders and elected officials," Schwerin said last week. "The allegations are horrible and he never would have invested if he knew he was being deceived."
Schwerin reiterated that McAuliffe's statement lists everything it should.
"The accountants who prepared and the lawyers who reviewed Terry's SEI confirmed that everything is listed accurately," he said. "Its obvious why Ken Cuccinelli would make another false charge: He infamously failed to disclose stock and lavish gifts from a company and its CEO that his office was supposed to be pursuing for unpaid taxes but instead let off the hook. "