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Inside Politics

Ex-Clinton aide denies knowing gala costs

One-time campaign finance director on trial on federal charges

Federal Election Commission
Crime, Law and Justice

LOS ANGELES, California (CNN) -- David Rosen, former finance director for Hillary Clinton's U.S. Senate campaign, testified in federal court Tuesday that he knew nothing about cost overruns for a lavish Hollywood fund-raiser he helped stage.

Rosen, 38, is on trial on charges he violated Federal Election Commission regulations for allegedly underreporting the cost of the August 2000 fund-raising gala.

Prosecutors allege that Rosen in so doing sought to leave more money for Clinton's ultimately successful $30 million campaign for the open Senate seat from New York.

They will resume their cross-examination of him Wednesday.

The jury is expected to begin deliberations Thursday in the trial that began May 10.

In the indictment, Rosen faces two counts of making false and fraudulent statements to the FEC.

The first count alleges he caused compliance officers with the campaign's fund-raising committee to file a report October 15, 2000, falsely declaring it received only $366,564.69 in in-kind contributions from the gala when Rosen knew it had earned substantially more.

The second count makes the same allegation, but for a different date -- January 30, 2001 -- and a different amount of money, $401,419.03.

If convicted, Rosen could face a maximum sentence of five years in prison for each count and a $250,000 fine.

On Tuesday, U.S. District Judge A. Howard Matz threw out another count against Rosen, citing a lack of evidence.

The gala, which took place on the eve of the Democratic National Convention in Los Angeles, featured performances by Cher, Patti Labelle and Michael Bolton, and a star-studded guest list.

The $25,000-per-couple dinner and concert ticket was billed as a tribute to outgoing President Bill Clinton. Some guests paid $1,000 to attend only the concert.

Actors such as Michael Douglas, Whoopi Goldberg, Shirley MacLaine, John Travolta and Goldie Hawn offered tributes at the dinner.

Many celebrity invitees asked to be flown to Los Angeles in private jets, pushing transportation costs above $90,000, said prosecutor Peter Zeidenberg.

Testifying in his own defense, Rosen said he did not intentionally underreport the production costs.

He said event organizer Bretta Nock told him initially that the costs were $200,000.

But during his 2.5 hours of testimony, Rosen admitted that figure went as high as $600,000.

In fact, the gala cost more than $1.2 million, according to FEC reports submitted by the campaign staff.

The indictment unsealed in January accuses Rosen of falsely reporting that the event cost $401,419.

Paul Sandler, lead defense attorney, blamed the underreporting of event costs on Peter Paul, a three-time convicted felon who underwrote the affair, and on Paul's business partner, Aaron Tonken, who is serving a five-year prison sentence for fraud.

The fund-raiser generated $57,000 in "hard money" for Clinton that could be used for direct advertising.

Rosen, who is from Chicago, Illinois, testified he was "less than enthusiastic" when he learned the fund-raiser was to be held so close to the Democratic National Convention.

He said he feared it would "intrude" on the campaign of Al Gore, who was soon to be the Democratic presidential nominee that year.

He also said he was concerned that organizers "didn't have enough time to prepare" and bring together an A-list of donors and celebrities.

But after expressing his concerns to top campaign officials, Rosen was ordered to proceed with his fund-raising plans, according to his testimony.

Rosen told the jury he never really knew how much the event would cost because that was not his role.

After arriving in Los Angeles for a week of planning in August 2000, Rosen said he relied on an outside production company to organize the event and document the costs while he raised money from donors through phone calls and other forms of solicitation.

Rosen he said never saw any of the bills or budgets generated during the planning stages.

Rosen was asked by Sandler if he ever took part in conversations about the costs of the gala.

"Absolutely not," Rosen said.

"Did you ever raise your voice about spending costs being out of control?" asked Sandler.

His client again replied, "No."

Rosen denied ever discussing cost overruns or potential problems with booking performers, even though he worked out of the same Los Angeles-area office where the event was being planned.

Rosen testified his only contact on budget matters came from Nock, the event coordinator, who e-mailed him an itemized list of costs several weeks after the event so he could forward them to the FEC.

"My job was to raise money and sell tickets," Rosen said.

Rosen, who accompanied Clinton on most of her campaign fund-raising events, said he attended the gala but was too busy escorting Clinton around the 112-acre Brentwood estate to question organizers about costs, including the entertainment.

"These overrun costs were hidden from me," Rosen contended.

"Did you ever intend to underreport or have any reason to underreport the production costs of this Hollywood fund-raiser?" Sandler asked.

"Absolutely not," Rosen answered repeatedly.

After 30 minutes of cross-examination, Rosen acknowledged to prosecutors that he was responsible for a "disastrous" fund-raising event at the Waldorf Hotel in New York a few weeks before the Hollywood tribute.

That fund-raiser, attended by the Clintons, cost more money than it brought in, according to Rosen.

He denied it caused him to fear that the fund-raiser in Los Angeles would become another debacle.

CNN's Stan Wilson contributed to this report.

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