If Tim Pawlenty decides to run for president of the United States, at some point he's going to have to explain his relationship with campaign contributor, Tom Petters associate and convicted money-launderer/cocaine-and-gun runner Frank Vennes, Jr.
This relationship is especially relevant in light of Pawlenty's recent donation of nearly $86,000 from his defunct gubernatorial campaign fund to Minnesota Teen Challenge (MnTC), a controversial Christian chemical dependency program that was once closely affiliated with Vennes and allegedly lost millions on account of that affiliation.
Like his Republican cohorts Norm Coleman and Michele Bachmann, Pawlenty's connections to Vennes are intertwined in several ways: campaign contributions, a request for a presidential pardon for Vennes' federal crimes, and now MnTC, where Vennes and Pawlenty's wife, Mary, served on the board of directors together.
Vennes and his family have contributed thousands of dollars to Pawlenty's gubernatorial campaigns. Kimberly Vennes (Frank's wife), Gregory Vennes, Stephanie Vennes (Gregory's wife), and Colby and Denley Vennes, who have shared an address with Frank and Kimberly, each donated $2,000 to the Pawlenty for Governor Committee in 2002. Frank, Kimberly, Gregory, Stephanie, Colby and Denley Vennes each contributed $250 to Pawlenty in 2004 and $2,000 apiece in 2006.
Coincidentally, the same year the Vennes money started to flow into Pawlenty's campaign coffers, Pawlenty's name appeared in a request for a presidential pardon for Vennes sent by Senator-elect Norm Coleman.
In a letter dated Dec. 20, 2002, and sent to President George W. Bush c/o Karl Rove, then-Senator-Elect Coleman said he was "well acquainted with Frank (redacted portion) and that I want to join "my friend, (former Minnesota GOP chairman) Ron Eibensteiner and Governor-elect Tim Pawlenty in urging President Bush to grant Frank Vennes a presidential pardon."
The roles of Pawlenty and Eibensteiner in seeking a pardon for Vennes are unclear. A Freedom of Information Act request did not turn up pardon letters from either one, and Pawlenty's office did not immediately respond to requests for an explanation.
The pardon Coleman, Pawlenty and Eibensteiner sought was for Vennes' conviction in 1987 on federal charges of money laundering, cocaine distribution and illegal firearms sale, to which he pleaded guilty and no contest.
Vennes was sentenced to five years in the Sandstone Federal Correctional Facility, where he reportedly "found God" and was released in 1990. Following his release from prison, Vennes filed a petition for a pardon, which has never been granted.
Meanwhile, Vennes was a board member of MnTC as recently as 2008. Pawlenty's wife, Mary, also sat on MTC's board of directors during at least a portion of the time that Vennes served on the board.
But that organization now stands to lose millions of dollars as a result of MnTC's investments that Vennes allegedly steered to his associate, Tom Petters, in Petters' alleged multibillion-dollar Ponzi scheme.
Vennes is alleged to have been a facilitator, or conduit, used by Petters to lure primarily Christian organizations into investing in Petters' companies through Metro Gem - one of Vennes' companies - or through the Fidelis Foundation, which served as a fiscal agent for Minnesota Teen Challenge. Among those investors was Minnesota Teen Challenge, which allegedly lost $5.7 million in investments in Petters companies.
On Sept. 24, 2008, federal agents raided Vennes' $5 million Shorewood home on Lake Minnetonka and his $6 million oceanfront home in Jupiter, Fla., in connection with the Petters investigation.
According to the federal search warrant, Vennes was alleged to have hauled in more than $28 million in commissions for his role in luring five investors to pony up $1.2 billion in Petters' alleged giant Ponzi scheme. On Oct. 6, the assets and records of Vennes, Petters, Petters' companies and other Petters associates were frozen by a federal judge, and many seized assets of Vennes and Petters have been sold off to compensate victims of the alleged fraud.
Still, the multimillionaire Vennes has not yet been charged with any crimes in connection with the Petters case. Nor has he been named as a defendant in any of the lawsuits filed against Petters and his associates by alleged victims of the fraud.
Michele Bachmann received tens of thousands of dollars in campaign contributions from Vennes and his family and also wrote a letter of request for his presidential pardon. However, she retracted it after Vennes became embroiled in the Petters scandal.
Bachmann initially donated a portion of her campaign contributions from the Vennes family - $9,200 - to MnTC in an apparent attempt to wash her hands of it. However, MTC returned the check to Bachmann, calling it "dirty money." Bachmann later sent the money to another organization affiliated with MnTC.
Similarly, after the Petters scandal broke, Coleman donated $14,600 to the Boys and Girls Club in October, which represented the amount of money Tom Petters had donated to his campaign in this election cycle.
Gov. Pawlenty's office did not immediately return requests for information about Pawlenty's relationship with Vennes or whether he intended to return any of Vennes' campaign contributions.
However, one other question remains: Would a President Pawlenty grant Frank Vennes Jr. the pardon he believes he deserves?
Since the alleged Ponzi scheme involving Tom Petters broke, there have been few more vexing questions inside our newsroom, and among local defense attorneys, than the true identity of one of the participants, Larry Reynolds.
Until this week.
Petters' attorney apparently smoked him out and provided enough detail that our reporters, through dogged legwork, were able to show that Reynolds is in fact Larry Reservitz, a convicted drug dealer and swindler with mob connections from Boston.
Newspaper clippings, court rulings and other public documents leave little doubt that the co-defendant known as Larry Reynolds is actually Larry Reservitz, a swindler and drug trafficker who had associations with the New England mob in the 1980s and eventually was placed in the government's witness protection program.
Reynolds said he got about $6 million in fees from Petters for laundering $12 billion in funds between 2002 and 2008. He pleaded guilty in St. Paul to conspiracy to commit money laundering and faces up to 20 years in prison.
Petters' trial on mail and wire fraud and money laundering is scheduled to begin in late October. But his attorneys now want the case against him dropped, suggesting that Petters himself might have been duped by Reynolds in an elaborate con that unfolded under the government's nose.
Petters, awaiting trial on charges he ran a $3.5 billion Ponzi scheme, is now trying to get his case dismissed, claiming that during its investigation of him, the government hid the true identity of Larry Reynolds, an alleged co-conspirator who has pleaded guilty to money laundering in the case.
Attorneys for Petters apparently filed the motion earlier under seal, and refiled it Friday in U.S. District Court in St. Paul with the names blackened out. But the series of documents clearly appears to be about Reynolds, a key figure in the Petters investigation who was identified in earlier court filings as being in the U.S. Justice Department's witness security program.
The filing argues "information tends to show [name redacted] secretly led the scheme without Mr. Petters' knowledge."
