Zurik: Feds investigating legislative power broker Alario

Updated: Apr. 29, 2015 at 8:09 AM CDT
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NEW ORLEANS (WVUE) - Sources tell FOX 8 News and|The Times-Picayune that the FBI is investigating the campaign spending of Senate President John Alario. They launched the investigation following findings in our "Louisiana Purchased" series last year.

Our story on Alario showed how more than $20,000 of campaign spending could have been misreported by Alario on his campaign finance reports. Alario claimed tens of thousands of dollars of spending at Audubon Golf Club and on LSU tickets. But a review of Audubon and LSU records showed that what Alario paid them didn't match up with what he claimed he paid on his campaign reports.

"I would be surprised if federal authorities wouldn't look at it, as well," said Loyola law professor Dane Ciolino in a 2014 interview. "These are allegations of public corruption, of misuse of campaign funds and false reports to campaign finance authorities. Those are serious allegations and, if proven, serious misconduct."

Now we learn that an investigation is active and ongoing.

Here's one example of the irregularities we found. On September 7, 2011, Alario hosted a fundraiser at the Audubon Golf Clubhouse. According to Audubon's records, the event cost $6,100. That's what the Alario campaign paid Audubon.

But Alario's campaign reports show two payments. One account shows a nearly $3,200 expense. His PAC account shows another for $6,500. All totaled, that's $9,700 in payments for a fundraiser that should have cost $6,100.

If Alario didn't spend all of that money at Audubon, we wanted to know where it went. Remember, Alario is an accountant - in his private life, he runs a tax service.

Alario told us last year, "Audubon, along with other… campaign activities were grouped and reported as lump-sum." Alario told us he would "file amended campaign finance reports to show the correct distribution." But according to the State Ethics Board, Alario hasn't filed any amended reports.

We found a few significant instances of discrepancies. Dane Ciolino told us last year that federal authorities would be looking to see if more took place.

"To violate the campaign finance law doesn't require a showing of fraudulent intent," Ciolino noted. "Even if it's an innocent mistake, it's still a mistake and it's still potentially a violation of state law. Where the real problem can come in for some public officials is if the conduct is so pervasive and so repetitive that it starts looking like more than a simple mistake. And that's when the FBI usually would get involved with a full-blown criminal investigation."

What's unclear is whether investigators are looking at other issues with Alario and his spending of campaign money. Our "Louisiana Purchased" series showed Alario spending hundreds of thousands of dollars out of his campaign account on things not directly related to his campaign, such as tickets to sporting events and meals.

"I think it would be surprising only if the federal authorities were not now following up," says political analyst Elliott Stonecipher.

It's unclear if Alario is aware of the investigation. But what is clear is that, since our stories started airing, his spending has gone down...

"That is a significant drop," says Ed Chervenak, a political scientist at UNO. "I mean, that's huge."

Here's a yearly total of spending out of his campaign accounts. Alario hit a high mark of $230,000 in 2011 - but last year, 2014, spending dropped to $68,000.

"It's the best example that I have ever seen of how a public official responds in a way that, in essence, proves he knew all along he shouldn't be doing it," Stonecipher says.

The most dramatic drop in spending was for tickets. Alario hit a high of $76,000 on tickets in 2011. That spending fell to $1,700 last year, the majority of that on tickets for LSU in October.

Stonecipher tells us, "At the very, very minimum, what John Alario has done is everyone who is paying attention, no matter how few that may be... he's telling everyone who's paying attention, 'It is wrong, I got caught and called on it by you, the news media, and I'm going to quit doing it.' So he in essence proves his own violations of law, and it's because it's so dramatic. The cuts were so incredibly dramatic, that there is no other explanation."

Alario reduced the spending for his car lease. He moved from a $700/month BMW to a $511/month Kia.

"This basically tells me that he knows he's under the microscope, when it comes to his campaign finance spending," Chervenak tells us.

Alario also spent $3,000 on an attorney, Gray Sexton, who specializes in ethics cases. It's unclear if the Ethics Board has also launched an investigation - but Stonecipher says hiring Sexton is a sign that Alario was concerned.

This marks the third federal investigation prompted by our "Louisiana Purchased" series. All of the investigations deal at least in part with campaign spending.

The FBI is investigating whether La. Representative Joseph Harrison double dipped, receiving reimbursements for gas from taxpayers but also claiming the same expenses through his campaign. And just last week, the FBI indicted former St. Tammany and Washington Parish District Attorney Walter Reed on corruption charges. 13 of the 18 counts are related to misuse of campaign funds - the government claiming Reed spent more than $100,000 of his campaign money on personal expenses.

Our sources don't know if the FBI has found any wrongdoing with Alario's campaign spending, but they say the investigation into the so-called dean of the Louisiana legislature is active.

The FBI tells us they can neither confirm nor deny any investigation.

Alario told us by email he wasn't aware of any investigation. He says he reduced his campaign spending in preparation for the upcoming campaign year.

And in reference to not filing an amended campaign report for Audubon payments, Alario says, to his knowledge, he has complied with reporting requirements.

Mobile users can view an interactive graphic visualizing Alario's expenditures at this link.

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