Florida bankruptcy attorneys have sent a letter to a now-defunct California ballot measure committee, asking it to return a $250,000 contribution it received in 2008 from a well-connected Fort Lauderdale lawyer who pleaded guilty to running a billion-dollar Ponzi scheme, the Miami Herald is reporting.
The donor, Scott Rothstein, gave the cash to a campaign supporting Proposition 11, the 2008 measure that put the job of drawing the state's legislative districts in the hands of the Citizens Redistricting Commission, rather than lawmakers. The ballot measure was a pet project of Gov. Arnold Schwarzenegger.
Earlier this year, Rothstein pled guilty to federal racketeering, money laundering and fraud charges after investigators unraveled a $1.2 billion Ponzi scheme orchestrated out of his law firm's Florida offices between 2005 and 2009, when he turned himself in to federal authorities.
The attorneys are apparently trying to get back campaign donations made by Rothstein's firm to at least 60 donors, totaling nearly $650,000, according to a list given by the attorneys to the Herald. The money would go toward satisfying the many creditors left in a lurch by Rothstein's conviction and victims of his scheme. The Prop. 11 donation is the largest the attorneys are attempting to retrieve, though the committee was dissolved last summer.
Schwarzenegger took some heat last year for attending a fund-raiser hosted by Rothstein in 2008 to raise money for Proposition 11. At the time, Schwarzenegger's spokesman, Aaron McLear, said the governor had no ties to Rothstein and met him for the first time at the event.
Much of Rothstein's estate was liquidated in January. Among the items auctioned off was at least one letter sent by Schwarzenegger. The South Florida Sun-Sentinel apparently scored pictures of one of the letters, accompanied by a shot of Arnold wearing a scarlet bathrobe:
Dear Scott and Kimberly,
Since I look so great in this bathrobe, I wanted you to have one, too.
Thank you for your support and friendship this year.
Many recipients of Rothstein's largesse – including a number of charities, schools and hospitals – gave the money back when the Rothstein's bankruptcy trustee came calling earlier this year.
There's no telling yet what, if anything, the Proposition 11 committee will do. Kathay Feng, executive director of California Common Cause, which was a primary backer of the measure, said yesterday that she was not aware of the letter. Feng said she would check with the attorneys who helped oversee the ballot measure's committee. We'll post an update if we hear anything.
The Herald report says that donors have until Friday to respond to the letter.