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Peter Paul and Sen. Hillary Clinton (Courtesy Hillcap.org)

A brief filed yesterday in a civil fraud case alleges Sen. Hillary Clinton engaged in criminal misconduct, citing a violation of federal code that carries a possible five-year prison sentence.

Business mogul Peter Franklin Paul, who claims he was the largest contributor to Clinton’s 2000 campaign, alleges the New York Democrat solicited and accepted his illegal contribution of more than $1 million and falsified statements to the Federal Election Commission.

Paul’s attorney, Colette Wilson of the U.S. Justice Foundation, argues in the brief filed with the California Court of Appeal that Sen. Clinton’s actions violated Title 2 section 437 of the U.S. federal code, which states: “Any person who knowingly and willfully commits a violation of any provision of this act which involves the making, receiving, or reporting of any contribution, donation, or expenditure aggregating $25,000 or more during a calendar year shall be fined under Title 18, or imprisoned for not more than 5 years, or both.”

The Clintons’ longtime attorney, David Kendall, told WND yesterday afternoon he had not seen Paul’s filing, but he offered a brief response to the charge Sen. Clinton violated the criminal statute.

“Any such allegation is totally false and totally unsupported,” he said.

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Clinton attorney David Kendall (PBS.org)

Arguing for the strength of his case, Paul asserted “even David Kendall can’t argue with the application of the law.”

“He’s going to try to use some magic tricks to divert attention from it, but Hillary Clinton has never denied any of my allegations,” Paul told WND. “Even when she filed a sworn declaration, which is her only comment about my allegations, there was not one denial.”

Paul called the declaration “a new first in non-denial denials, in which Hillary Clinton has extended her trademark poor memory to stating that if she doesn’t remember something happening, it didn’t happen.”

Nowhere in the declaration, Paul argues, “does she say Peter Paul was a liar.”

Paul’s new brief is an appeal pertaining to his civil fraud suit claiming Bill Clinton destroyed his entertainment company, Stan Lee Media, to get out of a $17 million deal in which the former president promised to promote the firm in exchange for Paul’s massive contributions to Sen. Clinton’s 2000 campaign.

The businessman claims he was directed by the Clintons and Democratic operatives to foot the bill for a lavish Hollywood gala and fund-raiser prior to the 2000 election that eventually cost about $2 million.

The brief filed yesterday is an appeal of an April 7, 2006, decision by Los Angeles Superior Court Judge Aurelio Munoz, granting Sen. Clinton her motion to be dismissed from the case based on the state’s anti-SLAPP law, which protects politicians from frivolous lawsuits during their election campaigns.

But in the brief, Paul’s attorneys argue Sen. Clinton violated the federal code and, therefore, according to the law, would not be covered by the anti-SLAPP statute.

In his April 2006 ruling, Munoz scheduled a trial to begin March 27 this year, but it was delayed when in September he ruled the discovery process – which likely would require the former president and his wife to testify under oath – could not proceed until the anti-SLAPP appeal is resolved.

Paul is asking that in the event the anti-SLAPP order is not reversed, the appeals panel allow him to proceed with limited discovery.

Paul’s current appeal likely will further delay the trial date. Wilson told WND she estimated oral arguments for the appeal might not take place before fall.

Paul said he finds it “perplexing” that the Federal Election Commission, in all its investigation and analysis of the funding of the Hollywood gala, never referred to the specific statute cited in his brief.

In January 2006, responding to a complaint by Paul, the FEC issued a $35,000 fine to a joint fund-raising committee that included Clinton’s campaign, New York Senate 2000, for failing to accurately report $721,895 in contributions from Paul.

In May 2005, Clinton’s former top fund-raising aide, David Rosen, was acquitted for filing false campaign reports that later were charged by the FEC to treasurer Andrew Grossman, who accepted responsibility in a conciliation agreement. Paul points out the trial established his contention that he personally gave more than $1.2 million to Sen. Clinton’s campaign, and his contributions intentionally were hidden from the public and the FEC.

He contends his new appellate brief is significant.

“This is the first time a court of competent jurisdiction – not a grand jury or prosecutor – will be reviewing a charge of criminal conduct against Hillary Clinton,” he said.

Paul acknowledged, however, that the appeals court could rule in his favor without a finding on the alleged criminal violation.

Wilson said that if the court does find Sen. Clinton engaged in criminal conduct, the finding would not compel the FEC to take action.

But it would be “very persuasive,” she said, and the FEC could refer the case to the attorney general for a criminal indictment.



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