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Jacksons' case a tale of runaway spending

Published: Thursday, Feb. 21, 2013 9:59 a.m. CDT

(Continued from Page 1)

(MCT) — It was the kind of runaway spending usually reserved for someone with newfound riches — a holistic retreat, a cruise, pricey restaurant tabs, flat-screen televisions and even a pair of stuffed elk heads —and former Congressman Jesse Jackson Jr. admitted he conspired with his then-Chicago alderman wife to pay for it all with campaign money and cover it up.

In two quiet federal court appearances just hours apart Wednesday, the power couple who once sought to write a new chapter in Chicago political history instead became the latest entry in an infamous culture of public corruption. Jackson pleaded guilty to conspiring with his wife, Sandi, to siphon campaign funds for personal use, and she pleaded guilty to not reporting most of the take as income on the couple's tax returns.

A sullen Jackson gave his wife a peck on the cheek at his own hearing and at times appeared to wipe tears from his eyes as he told a judge he was guilty of misusing about $750,000 in campaign money. And with that, a political star once seemingly destined for the U.S. Senate or the Chicago mayor's office dissolved once and for all.

"Tell everybody back home I'm sorry I let 'em down, OK?" Jackson told a reporter as he left the courtroom.

As part of Jackson's plea agreement, prosecutors filed a 22-page statement filled with stunning details of how the Jacksons used his congressional campaign fund to fuel a lavish lifestyle. Jackson admitted that together the couple used campaign credit cards to buy personal items, tapped campaign funds to pay those bills, sometimes arranged for their campaign treasurer to make purchases for them, filed falsified campaign-disclosure forms to hide their actions and ultimately understated their personal income for tax purposes.

Both Jacksons face the prospect of time in federal prison.

As part of the plea deal, prosecutors and Jesse Jackson's defense agreed that sentencing guidelines in the case call for a term of between 46 and 57 months, but the sides reserved the right to argue for a sentence above or below that range when he is sentenced June 28.

Sandi Jackson is to be sentenced days later on July 1 and may face from one to two years. Among the conduct in her case, prosecutors said, was failing to report that money in her aldermanic campaign fund was used for personal expenses.

Experts said the agreement for Jesse Jackson leaves room for the defense to argue for probation and use his mental health as a mitigating factor.

Jackson removed himself from the public spotlight last June after winning a primary election in March. His medical leave was initially attributed to "exhaustion." It was later revealed that he had been treated in the Sierra Tucson facility in Arizona and the Mayo Clinic in Minnesota and was diagnosed with bipolar disorder.

He resigned in November amid the swirling probe, ending a 17-year congressional career just two weeks after winning re-election.

U.S. District Court Judge Robert Wilkins asked Jackson during the hearing whether he understood what was happening.

"Sir, I've never been more clear in my life," Jackson answered.

At a news conference after the hearing, Jackson Jr.'s attorney, Reid Weingarten, said Jackson's health problems contributed to his crimes, hinting it may be an issue raised in a sentencing hearing.

"It turns out that Jesse has serious health issues. ... Those health issues are directly related to his present predicament," Weingarten said. "That's not an excuse, that's just a fact."

Documents filed with the plea agreement lay out a steady pilfering of Jackson's campaign fund during a period of nearly seven years dating to August 2005.

Six people identified by letters of the alphabet — Persons A through F —- were involved in various aspects of the crimes, prosecutors said, and have not been granted immunity in the case. They include two former campaign treasurers, an Alabama businessman who issued a check to pay down a Jackson credit card balance and a Chicago consultant.

In January 2006, Jackson personally opened a bank account under the name "Jesse Jackson Jr. for Congress," and the following year withdrew $43,350 he used to buy a gold Rolex watch, prosecutors said. In 2007, he was also withdrawing funds to pay down personal credit cards, according to case documents.

After that year, the spending went into high gear.

"These expenditures included high-end electronic items, collector's items, clothing, food and supplies for daily consumption, movie tickets, health club dues, personal travel, and personal dining expenses," prosecutors said. When he was charged last week, Jackson was accused of buying, among other items, a fedora that belonged to pop superstar Michael Jackson, an Eddie Van Halen guitar and a football signed by U.S. presidents.

More than $10,000 was spent at Best Buy. A Martha's Vineyard retreat cost $5,687. The Jacksons even billed two shopping trips to a Build-A-Bear Workshop, according to the documents.

Jackson also spent more than $60,000 "at restaurants, nightclubs, and lounges," as well as more than $5,800 for alcohol and more than $17,000 at tobacco shops, prosecutors said. Jackson is known as a cigar aficionado.

One of the most curious purchases took place in the spring of 2011.

In a transaction arranged by Person A, a onetime campaign treasurer, campaign funds were used to pay a taxidermist in Montana $7,058 for two mounted elk heads that were shipped to Jackson's congressional office in Washington. But a year later, with the federal investigation brewing, Person A tried to sell the heads, prosecutors said.

With federal investigators already watching, the move led to an FBI sting operation where an undercover employee of the FBI posing as an interior designer offered to buy the heads at a loss. Prosecutors said $5,300 was wired to Jackson's personal bank account.

Shawn Andres, a taxidermist who owns Alpine Artistry in Arlee, Mont., told the Tribune he was not the person who handled the sale, nor did he know which colleague did. But he did have an observation, saying Jackson paid "top dollar" for his elk heads.

"So that's a significant amount of money," Andres said. "$1,800 is about the most you should be spending for an elk head."

Federal prosecutors said Person A — involved in the elk head sale — was the treasurer of Jackson's campaign until 2008. Separate campaign records identify that aide as Terri Eileen Jones, 62, of Columbia, Md. Person B, a second treasurer, held that post after Jones, and is identified in separate campaign documents as Vickie L. Pasley, 57, of Chicago. Neither could be reached for comment.

Often personal spending was made to look like campaign expenses on official forms, prosecutors said in court filings. A 2008 expense of more than $1,500 for space for a fundraiser purportedly at the Museum of Science and Industry really went for porcelain collectibles, prosecutors said, and $224 for a "FR dinner meeting" at the Peninsula Hotel actually was the tab for a family lunch.

Legal experts said the case is without question headed to Chicago's hall of shame for disgraced politicians — one that just in recent years welcomed two governors, a series of aldermen and another congressman, Dan Rostenkowski, who pleaded guilty in 1996 to diverting taxpayer dollars to his own use.

But the brazeness of the Jackson case makes it unique, some said. Former federal prosecutor Sergio Acosta, now in private practice, said he would not be surprised to see the defense use that element to its advantage at sentencing.

"The outlandishness of it may actually play into the idea that he was suffering from some sort of mental illness at the time," said Acosta, who noted Chicago has seen its share of the misuse of campaign money. "But not to that degree."

In recent years when he was in Congress and she was on the Council, the Jackson's combined annual salaries as public officials totaled more than $270,000.

The day had started with an unusual sight in a city accustomed to seeing Jackson and his well-known father, the Rev. Jesse Jackson, at official events. Members of the family looked somber and were linked arm-in-arm as they headed into federal court.

Jesse Jackson Jr. and his wife, both Democrats, wore dark suits to court, and switched places in a chair just behind the defense table as each stood before the judge to enter a plea at their separate hearings four hours apart.

Jesse Jackson Jr. was first to speak to the judge, and summed up his conduct in a short statement.

"Sir, for years I lived (off) my campaign. I used monies that should have been used for campaign purposes, and I used them for myself personally, to benefit me personally," Jackson said. "And I am acknowledging that that which the government has presented is accurate."

In the afternoon, it was Sandi Jackson's turn. But unlike her husband, she answered the judge's questions only with a string of "Yes, sirs," and sniffled loudly and dabbed her face as it came time to enter her plea.

"Guilty," she said in a tiny voice, choking back tears.

The "statement of offense" filed in Sandi Jackson's case alleges she failed to report at least $15,000 in taxable income earned through her political consulting firm, J. Donatella & Associates. Her husband's congressional fund paid that firm at least $452,500 since 2002, federal campaign reports show. Prosecutors said she knowingly failed to report nearly $570,000 in taxable income over six years ending in 2011, leading to an estimated tax loss of about $159,000.

There was dispute between government and defense lawyers about where Sandi Jackson would fall under federal sentencing guidelines, which the judge is not bound to follow. On the high end, favored by the government, she would face a prison term of 18 to 24 months, while her lawyers are pushing for a sentencing guideline of 12 to 18 months.

The couple have two young children, who lived with them in Washington and attended school there, despite their mother serving for years on the Chicago City Council. Acosta, the former federal prosecutor, said it is not unheard of in case involving convicted couples with young children for one spouse to have his or her sentence deferred until the other spouse finishes serving a sentence.

Dan Webb, Sandi Jackson's attorney and a former top federal prosecutor in Chicago, told reporters following his client's court appearance that Jackson had faced a "hard decision" to plead guilty rather than fight the charges against her. Despite documents detailing her central role in the conspiracy, Webb downplayed her offenses.

"She made the decision to plead guilty today to a one-tax charge, and that's the only thing she pleaded guilty to," Webb said.

The downward spiral of a politician who had been one of Chicago's favorite sons began in 2008 when his name surfaced in the Chicago corruption case against then-Gov. Rod Blagojevich. Prosecutors alleged top fundraisers for him offered as much as $6 million in campaign cash if Blagojevich would name Jackson to replace the newly elected president, Barack Obama, in the Senate.

Jackson has denied knowledge of that offer. The U.S. attorney in Washington, Ronald Machen Jr., said the criminal case that felled Jackson was not referred to Washington out of the Blagojevich matter.

Machen declined to specify when the investigation began or if it was an outgrowth of an ethics probe of Jackson when he was in the House.

Jackson's misdeeds were a betrayal of the public trust, he said, especially since he spent campaign funds on "items of excess" such as fur coats and music memorabilia. Prosecutors outlined about 3,100 personal purchases in all.

"The people of Illinois' 2nd Congressional District and the American people deserve better from our political leaders," Machen said.

The Rev. Jesse Jackson, typically outspoken on a wide variety of issues, offered no comment at federal court on Wednesday.

Neither did his son or Sandi Jackson, who left her hearing holding hands, Sandi still with tears in her eyes.

Katherine Skiba and Wes Venteicher reported from Washington, with Jeff Coen in Chicago. Tribune reporters David Heinzmann, John Chase, David Kidwell and Kim Geiger in Chicago contributed.

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