By Chuck Strouse
By Scott Fishman
By Terrence McCoy
By Ryan Yousefi
By Ciara LaVelle, Kat Bein, Carolina Del Busto, and Liz Tracy
By Pepe Billete
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Though the news barely registered with the congressman's constituents, a few political insiders did take note. One, a Miami-based operative who insisted on anonymity, exclaimed, "That's horrible bookkeeping. That's bad stuff. You can't do that in a campaign. These idiots think the law is for someone else."
In February of this year, the FEC followed up on its October 2000 warning and fined Diaz-Balart a total of $5500 for being many months late in filing two disclosure reports. That sanction, the first under new regulations passed by Congress allowing the FEC to fine late filers, is separate from the recent civil penalty assessed in connection with the audit findings. It also has had no discernible effect on Diaz-Balart's career.
"You hate to lose money out of your campaign account, but it means nothing to your constituents," says a source familiar with the FEC investigation. "A Congress member can easily whitewash a problem like this by saying there was a fine, and we paid it, and it's all taken care of." (This past week state Republican Party chairman Al Cardenas asserted through a spokeswoman he knew nothing about any FEC audit of the Diaz-Balart campaign.)
"The whole [campaign finance] episode has been trivialized by the pundits I deal with," says a local political insider. "It's considered to be just dumb stuff on his part." One prominent Democratic consultant says even if he did know anything about Diaz-Balart's problems with the FEC, he wouldn't comment, since the congressman is a long-time friend.
Diaz-Balart, through his attorney, declined to speak with New Times, and repeated phone calls to his Miami and Washington offices failed to elicit any response from staffers.
The son and grandson of prominent politicians in pre-Castro Cuba, Diaz-Balart has made his name as a staunch anti-communist, even being named one of the "fifty most effective" members of Congress (in the foreign-relations area) by Congressional Quarterly magazine. He enjoys an influential relationship with the new Republican White House and retains a high-profile role in keeping U.S.-Cuba policy in Cold War mode, quashing at every turn growing public and political efforts to liberalize relations with the island. Recently he labeled "imbeciles" and "cretins" some Democrats in Congress who favor a conciliatory stance toward Cuba. Compared with such constituent-friendly issues, a few late FEC reports and a pile of illegal donations can be quickly dismissed as accounting missteps and overzealous supporters.
Yet the sheer depth of the mess, or more to the point, the fact the mess was burgeoning into public view, did apparently cause some scurrying for cover within the Diaz-Balart camp. The politician's curt public reaction -- denial of wrongdoing and blaming his staff -- only gives the impression someone is hiding something. Charles Dusseau, Miami-Dade County Democratic Party chairman, doesn't claim to know much about Diaz-Balart's FEC troubles, but he was mystified by the congressman's response to the revelations. "I certainly didn't think Diaz-Balart dealt with this in a very stand-up fashion," Dusseau opines. "He seemed to avoid the issue rather than dealing with it head-on. It certainly seemed like there was a lot more there than was alluded to, but who knows."
This past November, Diaz-Balart hired a new campaign treasurer, Coral Gables accountant José Riesco. The following month he retained the services of Washington, D.C., attorney Trevor Potter, a former FEC commissioner. Those moves probably saved the congressman tens of thousands of dollars in fines and perhaps even scrutiny from the U.S. Department of Justice. The Justice Department occasionally prosecutes campaign finance violations if they are criminal in nature, but it is not currently conducting an investigation of the Diaz-Balart campaign, according to a DOJ spokeswoman. Potter, at the insistence of his client, declined to comment or answer any questions concerning Diaz-Balart's campaign finances.
Early this year the campaign submitted eight years' worth of amendments to its original financial disclosures. In a January 12, 2001, letter to the FEC, Potter informed the Reports Analysis Division it was about to receive a stack of amended disclosure reports covering 1993 through 2000, as well as the campaign's 2000 year-end report, "submitted early," Potter points out. In some cases the disclosure reports have been amended twice, and government analysts continue to request corrections to already revised reports. Some of the records and documents declared to be missing during the audit have turned up, after all, in Diaz-Balart's offices.
On the same day Potter wrote the FEC, Diaz-Balart penned his own letter to the commission, a disingenuous attempt to mollify the feds after his office spent almost two years avoiding, stonewalling, and misleading auditors. "On November 6, 2000, I first became aware by a press report that my campaign committee ... had been the subject of an [FEC] audit report," Diaz-Balart began. "At no time was I informed nor was I aware that the committee was engaged in an ongoing audit process, or that an audit report had been issued in March of 2000.... I deeply regret the failure of my staff to keep me informed regarding the FEC's inquiries, and my staff's difficulties in responding to those inquiries." Diaz-Balart concedes in closing that his staff committed arithmetical errors and "failed to maintain financial records in the necessary detail and form." But nothing, he instructs the commission, reveals "any illegal activity or misappropriation of funds."