Chris Donovan is the Speaker of the House in the Connecticut State Legislature and is campaigning to win an open seat for the United States Congress in the 5th District of Connecticut. Donovan, the prohibitive favorite, had his dream of serving in Congress nearly shatter when members of his campaign staff were arrested and charged with accepting illegal campaign donations. Under a cloud of uncertainty, Donovan’s campaign hired former United States Attorney Stan Twardy to conduct an independent investigation into Donovan’s campaign. This is Twardy’s report, followed by Donovan’s reaction to the report, and the reaction of two of Donovan’s rivals for the seat in Congress.


TWARDY’S SUMMARY REPORT
   Day Pitney LLP was retained by the Chris Donovan for Congress Campaign Committee(“Campaign Committee”) on June 1, 2012 to conduct an independent internal inquiry todetermine whether or not Chris Donovan was involved either in concealing the true source of contributions to the Campaign Committee or in quid pro quo arrangements regarding legislationpending before the Connecticut General Assembly where he served as the Speaker of the House.We were engaged following the arrest of Robert Braddock, Jr., the former Campaign Committeefinance director, for allegedly participating in a conduit-contribution scheme.

1. The affidavit insupport of Braddock’s arrest also suggested Braddock was involved in conspiring to arrange a quid pro quo agreement relating to Senate Bill 357, an Act Concerning Various Statutes Relatedto the Department of Revenue Services. Senate Bill 357 would have designated Roll-Your-Own(“RYO”) smoke-shop owners to be tobacco manufacturers under Connecticut law, reversing aruling of a Connecticut Superior Court exempting RYO shops from certain tobacco taxes.

2. We interviewed Donovan and 12 current and former Campaign Committee employeesand legislative aides. We also reviewed financial records and documents, including electronic documents, maintained by the Campaign Committee and Donovan’s legislative office. Thisincluded our reviewing the following: paper documents at the Campaign Committee’s headquarters; approximately 140,000 pages of email messages from Donovan and CampaignCommittee staff; approximately 25,000 pages of emails from Donovan’s legislative office;approximately 41,000 files from computers used by Braddock, former Campaign Director JoshuaNassi, former Deputy Finance Director Sara Waterfall, and Donovan’s legislative staff, andvarious removable computer media, such as flash drives; and Donovan’s personal iPhone andiPad, including his text messages. Day Pitney also retained Blum Shapiro & Co., PC, to provideforensic accounting and computer analysis to assist in the review and analysis of the CampaignCommittee’s financial records, and the identification and collection of electronic documentsmaintained in the Campaign Committee’s computer systems and the computer systems of thelegislature.

3. The Campaign Committee gave us unfettered access to its employees, documents, andelectronically stored materials in its custody or control, and Donovan gave us similar access tohis legislative office. However, even with the Campaign Committee’s and Donovan’s fullcooperation, we were unable to interview everyone affiliated with the Campaign Committee orDonovan’s legislative office or review all emails that may be relevant. After the arrest of Braddock, the Campaign Committee fired Braddock, Nassi and Waterfall, who each retainedcounsel. We contacted each of their respective attorneys to arrange interviews, but none of themallowed us to do so in light of the pending criminal investigation. We also attempted tointerview Laura Jordan, one of Donovan’s legislative aides, but her counsel also refused to allowus to interview her. We did not interview any individual donors or other third parties in the course of our investigation. In addition, we learned that most—if not all—of the people whoworked at the Campaign Committee used their own, personal email accounts to some extent andtheir own computers to conduct Campaign-related work, and we did not have access to thosematerials because they were not in the custody or control of either the Campaign Committee orDonovan.Based on our interviews and review of documents, the results of our investigation are as follows:

• We found no evidence to indicate Donovan had any involvement in or knowledgeabout the alleged conduit contributions or any quid pro quo arrangement regardingthe RYO or any other legislation.

• We found nothing to indicate that any other campaign contributions were anythingother than legitimately provided by the donor to whom the donation was attributed.

• Everyone we interviewed, including Donovan, conveyed to us that the mostsignificant issue regarding fund raising for the Campaign Committee is that Donovandisliked being directly involved in it.

4. In fact, several people relayed to us that one of the ongoing struggles within the Campaign Committee is getting Donovan to attendhis scheduled “call time” during which he is to solicit campaign contributions directlyfrom donors.

• The Campaign Committee used a third-party vendor, the Campaign Finance Officers,LLC (“CFO”), to track and report the Campaign Committee’s contributions. Theinformation provided by CFO was checked by the Campaign Committee foraccuracy.

• Donovan received frequent emails (on an almost weekly basis) advising him of thedeposits made into the Campaign Committee’s accounts from donors, ranging from$10 to $2,500. From July 1, 2011 through May 31, 2012, a total of 8,122 peoplecontributed to his campaign. Of those, 211 gave $1,000 or more, including 79 whogave $2,500 or more. In addition, numerous PACs made contributions to the campaign.

• Donovan demonstrated his understanding of and compliance with the rules regardingconduit contributions. For example, in a February 23, 2012 email, an “aggregator”explained to Donovan that he had collected cash from donors and asked whether hecould simply put the total amount collected onto his credit card.


5. Donovan forwarded the email to Waterfall on March 1, 2012, instructing her to “educate the donor” thathe had to properly attribute each contribution to the proper donor. Waterfall followed up with that “aggregator,” explaining that she would help him put the cash into donation envelopes to ensure that each donation was properly attributed to the correctdonor.

• In the fall of 2011, Donovan met for breakfast with two individuals whom heunderstood to own RYO smoke shops, but whom he had never met before. Thebreakfast meeting was arranged by Ray Soucy, who supported the CampaignCommittee and who had known Donovan for a long period of time. During thatmeal, these individuals explained the tax issue then pending in the Superior Court.Apparently, that was the first time Donovan learned about the RYO issue.Individuals who owned such smoke shops subsequently donated money to theCampaign Committee. Donovan believes the donors included the two individuals hemet for breakfast, but does not know for sure.

• After the ruling by the Superior Court, Donovan recalls thinking that the individualshe had met were likely pleased with the court’s ruling.

• Toward the end of the 2012 legislative session, at a lunch of the House DemocraticCaucus, Donovan was seated near legislators who were discussing the then-pendingRYO legislation. That is the first he learned about that legislation, but at the timeDonovan did not focus on it.

• On April 25, May 9 and June 5, 2012, Donovan received several emails at hislegislative office email address from smoke-shop owners concerning the RYOlegislation. These emails appear to be form letters seeking Donovan’s help inopposition to the legislation. There is no record that Donovan responded.

• After the conclusion of the legislative session, legislators were working on the budgetimplementor bill for the special session of the General Assembly. At that time,Donovan learned from the Office of State Representative Patricia Widlitz, the Co-Chair of the Finance Committee, that the Attorney General’s Office had suggestedthat if the RYO smoke shops were not taxed as tobacco manufacturers, the Statewould be at risk of losing its share of the money resulting from its settlement with thetobacco industry. In connection with this, Donovan asked Jordan, his legislative aide,to contact the Attorney General’s Office to follow up on Representative Widlitz’sinformation. In an email, dated May 25, 2012, Jordan wrote to other legislative aides,in relevant part, concerning this information.

• Among the documents we recovered from the Campaign Committee headquarterswas an undated, handwritten list of what appear to be seven bills that were introducedbefore the legislature in the 2012 legislative session. The note was written on a pieceof paper emblazoned with “ChrisDonovanforCongress.com.” Among the notationson the list was, “SB 357 – Cigs.” Donovan, who said he had not seen this pagebefore we showed it to him, identified the handwriting as Nassi’s.

Footnotes

1. The details of the allegations against Braddock are set forth in the Affidavit of Special Agent William B.Aldenberg, Docket No. 3:12-mj-00171-DFM (May 30, 2012).

2. State v. Tracey’s Smoke Shop & Tobacco, LLC, No. X04HHDCV116024334S, 2012 Conn. Super. LEXIS572 (Super. Ct. Feb. 24, 2012).

3. A summary of the steps of Blum Shapiro’s forensic-accounting investigation and its findings is appended to this Report.

4. We note that campaigns for Connecticut’s state offices are publically financed, unlike the races for federal offices.

5. An “aggregator” is someone who sought to raise money for the Donovan campaign from multiple donors.

 

Chris Donovan’s Statement on Former United States Attorney Stan Twardy’s Independent Internal Investigation, July 5, 2012

   Former United States Attorney Stan Twardy has completed his independent internal investigation and, after receiving unfettered access to the campaign and the materials under its control, including tens of thousands of emails, records, and documents, “found nothing to indicate that Donovan had any knowledge of” alleged wrongdoing.

   “Chris is looking forward to talking about his record of success fighting for Connecticut families, including the country’s strongest state campaign finance reform law, the first statewide paid sick leave law in the country, and clean contracting standards,” said Tom Swan, campaign manager for Chris Donovan for Congress.

   “I am very happy that Attorney Twardy’s investigation is complete, and the results and his statements speak for themselves,” said Donovan. “I am looking forward to continuing my conversation with the voters of the 5th district about the issues that matter to them – protecting Medicare and Social Security from Republican attacks, bringing great jobs with good salaries and solid benefits to the families of the district, and protecting access to quality, affordable health care for every man, woman, and child in Connecticut.”

 

Dan Roberti’s Reaction

Fifth District Democratic congressional candidate Dan Roberti released this statement on an internal investigation of Chris Donovan’s campaign finances:

   “In the wake of findings in an internal investigation by former U.S. Attorney Stanley Twardy, many questions remain regarding alleged illegality in fund-raising operations of Chris Donovan’s congressional campaign.

   These questions stem in part from impediments to the investigation that was commissioned by Chris Donovan himself. For example, key Donovan staff members could not be interviewed on advice of their attorneys. Also, while Mr. Twardy did interview Chris Donovan, no transcript is available of their discussion. Notes from their meeting should be released so that the public can have an accounting of what questions were asked of Mr. Donovan, and how he responded.

   In addition, Mr. Twardy did not interview Ray Soucy, who has been described in media reports as a central figure in the ongoing FBI investigation into Donovan campaign finances. According to Mr. Twardy, Mr. Soucy arranged a meeting in the fall of 2011 between Chris Donovan and owners of roll-your-own tobacco stores. Legislation that could have a negative impact on the roll-your-own stores is at the heart of the FBI investigation, and Mr. Donovan needs to answer questions regarding the substance of that meeting.

   It must also be noted that this investigation is being paid for by Chris Donovan or his campaign, thus questions can be raised about the impartiality of the findings. Moreover, Chris Donovan was not available today to make his own statement or supplement the information provided by Mr. Twardy.

   The scope and results of the investigation are impacted by all these factors. Serious questions remain about the conduct of Chris Donovan’s campaign fund-raising. He needs to come forward and directly answer questions from the public and the press.”

 

Senator Andrew Roraback’s (R) Statement on Twardy Report

   The most important statement Stanley Twardy, Jr. made today about the scandal swirling around Chris Donovan’s campaign was, “There may be evidence out there that we don’t know of.” Whether subsequent legal proceedings in connection with the arrest of Donovan’s campaign finance director reveal that Donovan did or did not know of the alleged illegal activity, neither outcome will reflect well on Chris Donovan. If it is shown he knew of the activity, it makes him unfit as a candidate for Congress. If it is proven he had no knowledge of the alleged illegal activity, it calls into question the manner in which he is conducting his campaign and his abilities to give a kind of focused attention, which will be required to find solutions for the many complex challenges facing the 5th District and our nation.