Is Tony Coelho a Crook?

Is Tony Coelho a Crook?

Is Tony Coelho a Crook?

Answers to your questions about the news.
April 7 2000 4:19 PM

Is Tony Coelho a Crook?

The National Journal recently reported that Al Gore's campaign chairman, Tony Coelho, is the subject of a criminal investigation by the State Department, related to his work as the commissioner general of the United States Pavilion at the 1998 World Expo. What might Coelho have done?

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The State Department won't confirm or deny whether an investigation is underway. But here's a look at the some possible subjects of investigation:

Using government resources to fund a non-profit. In an audit last year, the State Department criticized the close financial ties between the U.S. Pavilion and a non-profit organization, which appears to be the Luso American Wave Foundation. Coelho created the Wave Foundation to collect money for a sculpture presented as a gift from Portuguese-Americans to the people of Portugal at the Expo. Auditors discovered that the government often paid for foundation expenses such as airline tickets and lodging.

In addition, Coelho took out a $300,000 personal loan to finance the foundation that, given his position as a representative of the U.S. government, might have become the federal government's financial responsibility. (Coelho personally repaid the loan after the release of the audit.)

• Living high on the hog. The State Department's audit reported that Coelho's official Lisbon apartment, which reportedly cost the government $18,000 a month, exceeded the department's per diem rate of just over $4,000 a month. The report also noted that Coelho improperly charged the U.S. government for several stays at a Lisbon hotel when he could have been living in his apartment instead.

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• Nepotism. The audit concluded that the U.S. Pavilion violated government policies against nepotism when it hired Coelho's niece as the Assistant to the Deputy Commissioner General. She was paid a salary of $2,500 a month during the Expo.

• Drumming up personal business on the taxpayers' dime. In addition to the issues raised in the audit, the National Journal article reports that Coelho may have violated laws by mixing his personal business with the government's. While he was in Portugal, Coelho was raising capital for an Internet mortgage firm called LoanNet. Coelho invited two lobbyists to Portugal, ostensibly for work related to his government position. The lobbyists were picked up at the airport by a chauffeur, which was paid for by the U.S. government, and spent part of their time at Coelho's apartment, also paid for by the government. The lobbyists may have used airline tickets that had been donated for the government's use. Each lobbyist subsequently invested $200,000 in LoanNet.

Coelho has not been accused of any criminal wrongdoing. If the State Department uncovers evidence of criminal activity, it will be forwarded to the Justice Department for possible prosecution.

This is not Coelho's first federal criminal probe. In 1989, Coelho, then a six-term congressman and House majority whip, resigned from Congress after reports surfaced that he had accepted a sweetheart loan from a troubled S&L operator. The loan helped Coelho buy a $100,000 junk bond, but he never reported it on his government disclosure form. The Justice Department decided not to bring charges against him.