A Salesman Lends His Talents To Politics

Posted: April 16, 1986

In 1982, when Jeffrey Bell ran for the Republican nomination for the U.S. Senate from New Jersey, he turned to Robert Brennan, the owner of First Jersey Securities, for help in funding his underdog campaign.

Brennan became Bell's campaign finance chairman. And he delivered.

By Election Day, the Bell campaign had collected $561,000 in individual contributions - $179,000 alone was from First Jersey employees and their wives. That money poured in to Bell's unsuccessful campaign in groups of $1,000 checks from First Jersey salesmen in 12 states from California to Massachusetts.

In interviews, seven First Jersey salesmen said they were given money by First Jersey executives and instructed to contribute the funds to the campaign in their own names. Some others said they were reimbursed later for their contributions. Many of the salesmen and their wives - including some who said they had contributed their own money - said in interviews that they had never heard of Bell until they were urged to contribute by First Jersey executives.

Federal law prohibits individual contributions of more than $1,000 to any candidate for federal office. The law prohibits contributors from exceeding the limit by giving other people money to contribute.

A federal grand jury in the Southern District of New York is investigating possible election law violations by First Jersey in the Bell campaign, according to federal documents. The jury has granted immunity to several former First Jersey salesmen for their cooperation, according to witnesses who have been called before the jury in the past several months.

In addition, the House Energy and Commerce subcommittee on oversight and investigations, in its own inquiry, has found evidence of possible election law violations, according to a Feb. 14, 1986, letter from Rep. John D. Dingell (D., Mich.), the committee chairman, to Attorney General Edwin Meese 3d.

In that letter, Dingell said he believed that the contributions by First Jersey salesmen and their relatives were part of "a scheme to funnel well over $100,000 in apparent illegal campaign contributions to Bell's campaign using First Jersey Securities' salesmen as a front."

Most First Jersey employees who contributed to Bell declined comment when contacted by The Inquirer. When asked why he gave $1,000 to Bell, Mark Sottile, a First Jersey salesman in Atlanta, said: "I don't want to be discourteous, but I think you should get answers from the New York office."

In an interview, Brennan, who lives in New Jersey and has raised funds for political candidates for nearly a decade, said that he encouraged his colleagues and employees to contribute to Bell's campaign, but he denied that any salesman's contribution was funded by First Jersey.

"I don't believe that happened," Brennan said of those accusations. ''Certainly no person who has any sense of responsibility or any sense of loyalty to me would indeed do something like that. First of all, it wasn't necessary. It wasn't something that we needed to do. You don't do it. And it's wrong. And it's a known wrong. It's not something that's ambiguous. It's crystal clear."

In addition, Brennan said that after the contributions from First Jersey employees were received, he sent those employees statements to sign and return to him that stated that the contributions were "voluntary" and were made out of personal funds. "My support of Jeff Bell was not in any way related to or effected by my employment with First Jersey Securities, Inc.," the statement reads. He said those statements were distributed to avoid the kind of questions that are now being raised about the contributions.

Brennan said that he and W. Hunt Dumont, First Jersey's general counsel, had reviewed the grand jury matter "and we are convinced that if and when it becomes a matter for public disclosure, that there will not be any negative consequences or any problems as it related to my involvement with Jeff Bell and my role as finance chairman in that campaign." Brennan, whose firm has been involved in a 10-year legal battle with the U.S. Securities and Exchange

Commission over First Jersey's business practices, blamed the grand jury inquiry on the SEC's "vindictiveness and animosity" toward the firm.

Bell, now the deputy director of a conservative Washington lobbying firm called Citizens for America, said he had never heard any allegations of contribution irregularities. Bell lost the 1982 primary campaign to Millicent Fenwick, a former U.S. representative, who went on to lose the Senate race to Democrat Frank R. Lautenberg.


In interviews, former First Jersey salesmen detailed how they came to make contributions to Bell.

Robert Ferrara, a former salesman in New Jersey, said his contribution to Bell "certainly wasn't my idea. They (a First Jersey official) came to me and said, 'Are you looking for a tax write-off?' And I said, 'Sure.' "

Ferrara said that before he made the contribution, he signed a paper given to him by First Jersey officials stating that he was making the donation of his own free will and with his own money. He said that despite that statement, he was reimbursed for the contribution.

"I was looking for a tax write-off, and they more or less gave me one," Ferrara said. "It was a wash. What I gave, they gave back. I wrote a check and I received compensation."

A former salesman in a First Jersey office in New York State said his branch manager asked him to make a contribution to Bell and then gave him a check to finance the contribution. The salesman said that when he attempted to pay the manager back, the manager told the salesman it was a "gift."

Four former salesmen from the Wayne, Pa., office told The Inquirer that a First Jersey executive called approximately 20 salesmen into a meeting in 1982. He said First Jersey needed $20,000 from that office for Bell's campaign.

The salesmen said that each of the 20 was given a $1,000 check drawn on the executive's personal account and was told to deposit the check and write a personal check to the Bell campaign.

The House subcommittee investigating the contributions has obtained photocopies of two checks and a deposit slip that substantiate one salesman's account of how the contributions in the Wayne office were funded.

One former salesman in the Wayne office said he was repaid for his contribution, which he made at the request of a company executive. "I had no interest in the guy, none whatsoever. I don't even know who the guy is," the former salesman said of Bell. "And if it's a thousand dollars coming out of my own money, I never would have made the contribution."

Federal election records show that Bell's campaign received 20 $1,000 checks from salesmen in the Wayne office. Thirteen checks from Pennsylvania salesmen arrived on one day - May 25, 1982.

On that day, Bell's campaign received 51 checks, each for $1,000, every one

from a First Jersey employee or his wife. The checks came from nine states - $13,000 from Pennsylvania, $12,000 from New York, $8,000 from Massachusetts, $6,000 from Florida, $5,000 from Virginia, $2,000 from Louisiana, $2,000 from California, $1,000 from Texas and $1,000 from Georgia. An additional $1,000 came from the District of Columbia.

Five days earlier, on May 20, 1982, nine $1,000 checks arrived at Bell headquarters from salesmen in First Jersey's Atlanta office.

On the federal election reports, 148 contributors identified themselves as First Jersey employees and 32 women identified themselves as wives of those employees. According to the reports, 178 of those sent checks for $1,000 and two salesmen sent checks for $500.

Some salesmen said they contributed to Bell's campaign because of political beliefs. One of the checks to arrive on May 25 was from Ronald Migliore Jr., a First Jersey salesman in Buffalo, N.Y. Migliore said he has contributed to other conservative candidates. He said "the suggestion was made" by someone in "the management" of First Jersey, whom he did not specify, that he make a contribution.

"I know that Mr. Brennan, the president, was a supporter of Mr. Bell, and (I was) just following his example," Migliore said.

He said he was not compensated for the contribution, nor was he offered compensation by First Jersey officers.

Dean Mercurio, a First Jersey salesman in Florida, said he contributed to Bell's campaign because "Mr. Bell stood for things that I believe in." He said that "basically, the whole thing is you look for people to run this country no matter where they are."

Becky Spangler, whose husband heads First Jersey's Buffalo office, contributed $1,000 to the Bell campaign on May 3, 1982. In an interview, she said she had no recollection of ever making the donation.

"I remember hearing about Bell, but I don't remember contributing to Bell," she said. "Ask my husband about it."

Jamie Spangler, her husband, made a $1,000 donation on May 31, 1982, according to the federal election report. Spangler did not return a phone message left at his office.

The House subcommittee, in its letter to Meese, said it encountered difficulty in interviewing former First Jersey salesmen.

"A number of ex-salesmen seem genuinely terrified that First Jersey or Brennan would learn that they were talking to the Subcommittee," the letter says. "Some would listen to a description of the (campaign contribution) scheme and indicate it sounded familiar, but then refused to comment, on the advice of counsel. It has occurred to a number of these former salesmen that they may have violated tax laws by writing off the contribution for which they received reimbursement, as well as having violated Federal campaign spending laws."

In exchange for their testimony, former salesmen were granted immunity by the federal grand jury in New York from prosecution for possible violations of election and tax laws. The office of the U.S. attorney for the Southern District of New York, where the investigation is being conducted, declined comment on the investigation.

The subcommittee letter to Meese states that information on the contributions to Bell from First Jersey was brought to the attention of the U.S. attorney in Manhattan as far back as a year and a half ago. Witnesses before the grand jury say that they have testified as recently as January.

Brennan said he believes the accounts of the campaign contributions are the result of former salesmen "trying to strike out at their former manager and former colleagues." He said some former salesmen are unhappy because First Jersey prohibits them from taking their customer accounts with them when they leave.

These former salesmen, Brennan said, are using their made-up versions of the campaign contributions as "salvos of mud" against the firm.

"I think it's very easy for . . . people in general to just make allegations and . . . those kinds of things have a tendency to feed on themselves a little bit, even in the sense that one person comes up with an idea that this is a good way to strike out and all of a sudden that becomes the latest bit of gossip among the alumni club, to strike out in a dishonest and negative way against their former manager or former firm," Brennan said.

Brennan said he encouraged his employees to contribute to Bell and invited some of them to fund-raising events that he sponsored. He said that he always encourages his employees to contribute to causes, from the March of Dimes to political campaigns.

"It costs a tremendous amount of money to run a campaign, and if you have a political philosophy that you want to see as part of the governmental process, then I think you have to be willing to sacrifice and make contributions and dig in your pockets and in effect support that with and vote for that with your money," Brennan said.

Brennan began raising political funds in 1977 when he was an active fund- raiser for Ray Bateman, the unsuccessful Republican candidate for New Jersey governor.

In 1981, during the Democratic gubernatorial primary in New Jersey, Brennan contributed to the campaign of John Degnan, the former state attorney general, who is now a director of International Thoroughbred Breeders, the horse- racing company controlled by Brennan. When U.S. Rep. James J. Florio became the Democratic nominee facing Thomas Kean, Brennan called Florio to his Manhattan office and wrote a $50,000 check to the state committee for Florio. When Florio lost, Brennan became a major financial supporter of Kean's.

In addition, Brennan is a Republican "Eagle," having contributed $10,000 to the National Republican Committee. He also supports a string of other politicians, including Rep. Jack F. Kemp (R., N.Y.) and New York Mayor Edward I. Koch.

Brennan signed on to Bell's campaign in early 1982. The first checks to Bell's campaign from First Jersey Securities employees arrived at campaign headquarters in Westfield, N.J., on Feb. 12, 1982, with $1,000 checks from Robert Brennan and four other First Jersey executives.

Bell, in an interview, said he approached Brennan about helping his campaign and that he became "one of my best high-dollar fund-raisers."

He said he was aware of the large number of contributions from First Jersey employees but did not think it was unusual. "Bob Brennan was my finance chairman and he has always been good at hitting up people," Bell said.

Bell's politics are in line with Brennan's support of free enterprise and reduction of government regulation of business.

"He's a very bright guy," Brennan said of Bell. "The unfortunate thing about his loss is that he would have been a great United States senator,

because he's a great thinker. And he would have been a real team legislator, as opposed to a chief executive. And I think he would have been real good for the state. The guy is a legitimate person."

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