Major McHenry '04 funds from fraudulent donor

Delay-related funding almost $200,000, nearly 20% of McHenry's campaign total

Also, two major in-district fundraisers reportedly under investigation for Medicaid fraud [scroll to bottom for this one]

Why McHenry's Delay-related chunk of funds was not covered during the 2004 primary season lies at the hands of the pathetic 10th District press and the Charlotte Observer's total incompetence. And the whole sordid story certainly makes you wonder about Pat's Republican opponents. Of course, Delay wasn't in trouble then.

And still, when the organization funneling so much money to NC's 10th district settled an FEC lawsuit last week, the Charlotte Observer failed to mention McHenry's faulty funding even then. When you think that the 85-vote 2004 margin of victory is already suspect by one, you have to consider that the local newspapers have something to gain by covering up negative McHenry-related news.

Last week the Citizens Club for Growth PAC paid $350,000 to settle an FEC lawsuit which

arose after the Democratic Senatorial Campaign Committee filed a complaint with the FEC in 2003 alleging that the group was violating federal election laws. After an investigation, the FEC concluded that the 527 was required to register as a political action committee because it was accepting contributions and engaging in activities intended to influence the outcome of federal elections.

According to FEC Schedule E report the Citizens Club for Growth had funneled the McHenry donations through an organization called Red Sea LLC:

Red Sea LLC
1111 19th Street NW
Suite 211
Washington, DC 20036

Purpose of Expenditure: tv air buy
This Committee SUPPORTS The Following Candidate: PATRICK TIMOTHY MCHENRY
Candidate ID: H4NC10047
Office Sought: House of Representatives
State is North Carolina in District 10
Date Expended = 08/12/2004
Amount Expended = $49790.00
Calendar YTD Per Election for Office Sought = $182440.7

Red Sea is an invention of a former communications director for the disgraced Tom Delay, Jonathan M. Baron.

This information is right there in the FEC's Schedule E for the Citizens Club for Growth PAC. From Sourcewatch when the lawsuit was filed:

"The Federal Election Commission filed a lawsuit Monday [September 20, 2005,] in U.S. District Court in Washington against the Club for Growth, the first case of its kind to arise from high-dollar fundraising during the 2004 elections. The pro-Republican group spent at least $21 million in the 2003-2004 election cycle. ... The FEC contends the club spent enough in federal races to require it to file with the commission as a political committee and to follow contribution and spending limits. It wants the court to fine the group and order it to comply with campaign finance rules." --Associated Press, September 19, 2005

So, at least $182,000 of McHenry's $923,975 came from an organization donating fraudulently.

And now former North Carolina Conservative Coalition Chair Donnie Young is reporting that two of Pat's fundraisers, two Gaston County businessmen, are under investigation for Medicare fraud. According to Donnie Young's exploratory campaign website:

In the 1994 [sic -- should be 2004] campaign that sent Patrick McHenry to the Hill as the Congressman for the 10th Congressional District of North Carolina, his biggest behind-the-scenes fundraisers were a pair of Gaston County businessmen named William T. Duffy and Bernard H. Sullivan. Mr. Sullivan is, among other things, a Baptist minister and the former owner of a small, fairly moribund chain of at-risk-youth centers called Success Intervention Services. Duffy is or was a real estate investor of moderate success and married to a woman named Brenda, a masseuse and some time exotic-dancer (stripper).

In the year leading up to Patrick McHenry’s questionable win of 85 votes (now 84 and counting after Aaron Lays admitted voter fraud) virtually every fundraiser was hosted and orchestrated by Duffy or Sullivan. Patrick was so thankful to Duffy and Sullivan after he was sworn in to Congress in January of 2004, that Duffy and Brenda later became his special guest in the House seats at the Presidential Inauguration of George W. Bush. Also in 2004, the non-profit Success expanded rapidly and both Duffy and Sullivan began living extravagant lifestyles, reflected in real estate purchases.

It is known that both Sullivan and Duffy are under Federal Investigation. According to an article in the Gaston Gazette by Geoffrey Graybeal both have filed bankruptcy owing creditors millions in unpaid bills. It’s also rumored that Brenda-the stripper has left Mr. Duffy. Sometime in late 2005 the head office of Success Behavioral Healthcare in Gaston County was shutdown. Many former employees were let go, and most are still listed as creditors in the pair’s bankruptcy fillings. Several former employees were contacted and have confirmed knowing of a federal investigation.

There has also been confirmation through a source in North Carolina Department of Social Services that the offices of Success were raided and shutdown by the Feds. This is also around the same time there was rumors the Hickory Congressional offices of Patrick McHenry were also visited (raided) by the Feds. There was a former employee in McHenry’s office who was leaking information and stated, “There were papers shredded” that employee has since been released. There is still a source available however who writes the checks for contract facilities like Success who said that Success was illegally subcontracting their Federal Medicaid contracts and padding their invoices to the tune of millions of dollars, amounting to substantial fraud of a Medicaid contract.

This is significant because this period matches Patrick McHenry’s arrival in Congress and Sullivan and Duffy winning the Medicaid contract to supply legitimate therapy services to at-risk-youth away from the State agency that had been doing the job for years.

It’s also believed, though not confirmed at this time, that the Feds are or were investigating Patrick McHenry and that Minority Whip Roy Blount’s office had been notified. These men and their connection with Patrick is very troubling because it’s apparent the young Congressman has a history of surrounding himself with people of questionable moral fiber. This could however shine some light on the young Congressman’s going from being impoverish in 2004 to having a net worth of almost one million dollars in less than eighteen months.

The young Congressman needs to clarify to the working people of this district if he assisted Sullivan and Duffy in their securing the contract with Medicaid. Now would also be a good time for Patrick to clarify how Aaron Lay (and others) could be living in his home and commit voter fraud without his knowledge.

Crossposted at Scru Hoo and Sayonara Pat.