Ethics committee rejects complaint about use of lobbyists, see A31.When Sen. Orrin Hatch, R-Utah, attempted favors for Houston businessman Monzer Hourani, it mired him deeper into the Bank of Commerce and Credit International scandal and a yearlong Ethics Committee investigation.
Now Hourani, a business partner with Hatch in a rental townhouse in Texas, is in trouble for trying to do a favor for the senator - without Hatch's knowledge.Hourani has agreed to pay a $10,000 fine to the Federal Election Commission for paying his employees to donate to Hatch. He says he didn't know it was illegal.
But FEC officials charge Hourani schemed to exceed federal donation limits. After he paid the maximum-allowed $2,000 to Hatch in the 1988 campaign, Hourani persuaded his workers to give another $7,000 in their names and reimbursed them with cash.
That has pulled Hatch into minor trouble again.
Although the FEC found Hatch did not know of Hourani's pay for donations, it found Hatch's election committee did not return for five years a donation exceeding limits by a Hourani worker. Such overpayments by law must be returned within 60 days.
With that, the FEC found "reason to believe" Hatch's committee violated election laws, but took no further action.
That allows Hatch to keep the money Hourani gave illegally for the 1988 campaign, if he chooses. "I'm not sure what we will do," Hatch said. "I think the money was spent long ago."
The FEC just released documents about the probe it conducted quietly into the matter, and concluded about a month ago.
It began when the fraud division of the U.S. Justice Department wrote the FEC that it investigated violations by Hourani, decided against criminal prosecution but suggested that the FEC seek civil penalties.
FEC documents show five Hourani employees told the FBI that Hourani asked them to donate to Hatch and offered to reimburse them with cash. Two said they felt they might lose their jobs if they did not. One man said he initially refused, but relented under pressure by Hourani.
Hourani, however, said in an affidavit that he did not pressure or threaten any employee to contribute - which would have also violated federal law.
The FEC noted that four of the five employees made donations after Hourani had a $3,000 donation returned to him from the Hatch committee with an explanation that it would violate federal donation limits. Hourani had already donated the maximum allowable of $2,000.
FEC officials said that showed Hourani should have known more donations would violate limits, but he said he had never read the letter.
Hourani also said in an affidavit that he did not realize that reimbursing his employees for donations was illegal. "I made a mistake and take all the blame for my action," he said.
Only one employee, Hourani's bookkeeper Bonnie B. Davis, was also fined (for $1,000) because she helped solicit donations. She also donated $3,000 to the 1988 campaign - or $1,000 over the limits. The Hatch campaign did not return it until five years later in 1993 - which led to the hand slap by the FEC for the delay.
"How are you supposed to know someone went over the limit?" Hatch asked, noting that his campaign staff has been generally good about finding such instances faster.
Despite the problems, Hatch said Hourani "is like a brother and good man" whom he calls every week. He said they are both members of The Church of Jesus Christ of Latter-day Saints, and met when one of Hourani's church leaders suggested that Hatch get to know him and encourage his church activity as a convert from Islam. Hourani is a native of Lebanon.
Much of Hatch's problems in the scandal over BCCI - a bank closed because of money laundering for drug dealers and terrorists - came when he tried to do favors for Hourani that deepened his contacts with BCCI executives.
In 1990, Hatch had given a speech on the Senate floor defending BCCI and a settlement it reached with the Justice Department, based on text provided by BCCI lawyers who had convinced Hatch that BCCI was being unfairly criticized.
After it, Hatch called the head of BCCI - who thanked him for the speech - and suggested that he and Hourani "get together and do business" because Hourani was having trouble obtaining loans, and Hatch felt an Arab-controlled bank may be more sympathetic.
Critics questioned Hatch's doing and seeking favors with BCCI - which led to a yearlong investigation by the Ethics Committee, which eventually exonerated Hatch of any wrongdoing.