A George W. Bush fundraiser is now embroiled in an alleged $1 billion scam
Nov 13th 2009 2:00PM
Updated Dec 4th 2009 4:40PM
Not all the people who donate to presidential campaigns are good. This fact comes to mind as we find out more about one of George W. Bush's big campaign donors -- a pleasant fellow named Scott Rothstein. Of course, he had plenty of company in goosing Bush's campaign coffers -- recall subprime mortgage lender Ameriquest, which contributed a mere $7.8 million.
But that's old news. Bloomberg News reports that Rothstein is a lawyer who persuaded investors to give him $1 billion, in exchange for which they allegedly got a chance to earn a share of what Rothstein promised would be big legal settlements just a few months after those investors' checks cleared. Apparently, it was a yet another Ponzi scheme -- the legal settlements didn't exist. Federal authorities have sued Rothstein, but he hasn't yet been charged with any crime.
Not everyone fell for the scam. One lawyer told Bloomberg News he heard a pitch from Rothstein, but decided not to invest $1.98 million, with a promise of $2.7 million in 90 days, after Rothstein refused to let him meet the clients, see documents or meet the attorneys who supposedly worked on the cases.
But Bloomberg reports that neither Bush nor Florida Gov. Charlie Crist had any problems accepting campaign contributions from Rothstein. The Republican party also enjoyed Rothstein's largesse.
Now Rothstein's partner, Stuart Rosenfeldt says he believes $500 million of the investors' money might be missing.
There's a lesson to be learned here: Don't take the promises of investment salespeople at face value. If it sounds too good to be true, check out the details for yourself. As for politicians, most of them are too much in need of money to worry about their contributors' business methods.
It's too late for this revelation to embarrass form President Bush. As for Gov. Crist, he's trying to distance himself from Rothstein, according to The Palm Beach Post. We'll see whether he returns Rothstein's money.