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The Journal Gazette

Tuesday, February 26, 2013 5:31 pm

Va. men plead guilty in campaign money case

By MATTHEW BARAKATAssociated Press

A Virginia man pleaded guilty Tuesday to using his company to illegally funnel nearly $200,000 to Hillary Clinton's political campaigns.

There are no allegations Clinton acted improperly.

William P. Danielczyk Jr., 51, of Oakton, struck a plea deal Tuesday in federal court in Alexandria to a single count of making contributions in the names of others. Danielczyk (pronounced DANN'-yuhl-chek) faces up to five years in prison at sentencing.

A trial had been scheduled to begin Tuesday, but jury selection was delayed as prosecutors and defense attorneys engaged in last-minute plea negotiations.

Eugene Biagi - an officer in Danielczyk's company, Galen Capital Group - also pleaded guilty Tuesday to a related charge of making illegal corporate contributions. Under the terms of the deal, prosecutors will recommend Biagi, 78, also of Oakton, serve no jail time. While the judge is free to impose a jail term on Biagi at sentencing, it is unlikely he would do so.

A May 17 sentencing was scheduled for both men.

Court records show that the two engaged in a scheme to reimburse Galen employees for contributions they made to Clinton's 2006 Senate and 2008 presidential campaigns.

Danielczyk hosted fundraisers for Clinton in 2006 and 2007, in which numerous Galen employees would contribute as much as $4,200 to Hillary Clinton's campaign. Danielczyk, who was Galen's chairman, would reimburse the employees for their donations - usually with an extra $100 to $200 thrown in - from company funds. The use of straw donors allowed Danielczyk to evade laws that limit the amounts individuals and corporations can contribute.

Danielczyk falsely told the Federal Elections Commission that the reimbursements were bonus payments to employees.

Danielczyk and Biagi were charged in 2011, but the case fell into limbo a few months later when U.S. District Judge James Cacheris tossed out some of the charges.

Cacheris, citing the Supreme Court's landmark Citizens United ruling on campaign finance law in 2010, ruled that the century-old federal ban on corporate campaign contributions was unconstitutional because corporations enjoyed the same right to political speech as individuals. But an appeals court overruled him and on Monday the U.S. Supreme Court refused to hear the case, clearing the decks for Tuesday's plea.

The count to which Biagi pled is a count that Cacheris had initially dismissed.

Steven Webster, a lawyer for Danielczyk, declined comment Tuesday.

Federal public defender Todd Richman, one of Biagi's lawyers, said after Tuesday's hearing that the case against his client - initially billed as a high-profile public integrity case by the Justice Department - will likely end up with a sentence less than a typical drunken driving case.

"That tells you all you need to know about my client's role and the questionable decision to prosecute him in the first place," Richman said.

Neil MacBride, U.S. Attorney for the Eastern District of Virginia, whose office prosecuted the case, said Tuesday in a statement that Danielczyk "admitted that he tried to corrupt the electoral process by evading corporate contribution limits. Mr. Danielczyk abused his power as an employer and abused his power as a participant in a U.S. election."

The statement added that direct contribution limits for corporations provide an important safeguard on the integrity of the electoral process.