Fundraisers linked to corruption cases

WASHINGTON -- Democrat Barack Obama and Republican John McCain have made government ethics a centerpiece of their campaigns, and each has sought to distance himself from Washington's influence business.

Yet Obama and McCain have relied on key fundraisers whose names surfaced in separate federal corruption cases relating to lobbying for government contracts.

In 2003, James Reynolds, a Chicago investment banker who is a member of Obama's national finance committee, was recorded on FBI wiretaps arranging what prosecutors said was a "sham" consulting contract with a woman they called the "paramour" of a mayoral adviser in Philadelphia. His firm later won $300,000 worth of city contracts.

In 2004, Fred Malek, a co-chairman of McCain's fundraising committee, and his investment firm, Thayer Capital Partners, were censured by the Securities and Exchange Commission for not disclosing payments to a friend of former Connecticut treasurer Paul Silvester.

Silvester, who pleaded guilty in 1999 to racketeering charges, admitted in his plea agreement that he persuaded Malek and his company to pay a "finder's fee" on a state investment to the friend, who didn't do any work.

Malek and his company settled the administrative case without admitting or denying wrongdoing by paying the SEC $250,000.

Neither Reynolds nor Malek was charged with a crime.

However, both campaigns have pledged to break ties with staffers, advisers and fundraisers for actions that, although legal, raised the appearance of a conflict of interest or other ethical questions. Both candidates have said campaign activists are being held to a strict ethical standard.

In a statement, Reynolds said, "After a thorough examination, no charges were ever brought against me … I can assure you, if the U.S. attorney's office believed that (my company) or I had violated any law, they would have brought charges." He would not answer questions.

The Obama campaign released a statement that said: "Jim Reynolds has admitted that he made mistakes, but he has not been charged with any wrongdoing."

Malek said in a statement: "I was pleased to have assisted the SEC in reaching a satisfactory conclusion to what is now a 10-year-old event."

McCain campaign spokesman Brian Rogers declined to comment on Malek.

'Broken' system

Both Obama and McCain have said they want to reduce the role of lobbyists and special interests in Washington.

"We're going to drain the swamp in Washington, D.C., and we're going to take on the special interests, and we're going to reform government," McCain said at a Sept. 8 rally in Missouri.

Obama echoed that sentiment during a forum on national service on Sept. 11, declaring that "Washington is broken." Obama said "the domination of special interests, the domination of lobbyists, the loss of a civic culture in Washington" led to disasters such as the bungled response to Hurricane Katrina in 2005.