Federal corruption trial begins for Steve Stockman, former GOP congressman

Former U.S. Congressman Steve Stockman, left, and his attorney Sean Buckley walk into the Federal Courthouse for the start of federal corruption trial against Stockman Monday, March 19, 2018, in Houston. Former U.S. Congressman Steve Stockman, left, and his attorney Sean Buckley walk into the Federal Courthouse for the start of federal corruption trial against Stockman Monday, March 19, 2018, in Houston. Photo: Godofredo A. Vasquez, Houston Chronicle Photo: Godofredo A. Vasquez, Houston Chronicle Image 1 of / 5 Caption Close Federal corruption trial begins for Steve Stockman, former GOP congressman 1 / 5 Back to Gallery

A jury was selected Monday in the federal corruption trial of former U.S. Rep. Steve Stockman, accused of directing a scheme to divert charitable donations to pay campaign costs and personal expenses.

On Monday, Chief U.S. District Judge Lee H. Rosenthal explained that the lawyers were looking for jurors who could remain unbiased and refrain from being swayed by sympathy rather than facts.

"This case grows out of politics, but I don't care about politics," the judge said. "I only care if your opinions about politics are so firmly entrenched... for example, you just don't like Republicans or you just don't like Democrats and that's going to reflect in your opinion in this case."

Twelve jurors and four alternates could hear testimony from about 75 witnesses and sift through thousands of pages of evidence in what prosecutors have characterized as a “white-collar crime spree,” according to court documents.

The former Republican congressman has insisted he is innocent, and his defense attorney said he never intended to defraud anyone.

A joint team of prosecutors from Houston and the Justice Department’s Public Integrity Division contend that with the help of two aides, Stockman syphoned off $1.25 million in donations meant for three U.S. charitable groups and then laundered the money to fund his own campaigns and pay personal expenses without paying taxes on the money.

“The evidence at trial will show that over a four-year period (Stockman) used a series of sham nonprofit entities to raise over $1 million in fraudulent donations,” according to trial brief filed recently by Justice Department prosecutor Ryan Ellersick, who alleged the former congressman “funneled the fraud proceeds through a web of shell bank accounts before ultimately using the funds to pay for personal expenses and to illegally finance his campaign for federal office.”

Stockman, 61, a resident of Clear Lake, faces 28 criminal counts, including allegations of mail and wire fraud, conspiracy, making false statements to the Federal Election Commission, making excessive campaign contributions, money laundering and filing a false tax return.

Stockman’s lawyer, Sean Buckley, said he expects his client to be fully vindicated. He plans to argue that the upstart lawmaker, who opposed big government and failed to unseat Sen. John Cornyn in the 2014 Republican primary, did nothing intentionally wrong.

ACCUSED: Ex-Congressman Stockman accused of stealing $775,000 from foundations, federal courts say

“We are absolutely adamant that he didn’t intend to defraud donors or anyone else,” Buckley said. “There’s no allegation of an extravagant lifestyle. He was always one step away from the poverty line.”

Stockman is not currently employed, his lawyer said. His wife works at NASA, but he told a federal magistrate he couldn’t afford his own lawyer. Buckley’s legal fees are being covered by a friend of Stockman’s, whom Buckley declined to name.

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Two aides have entered guilty pleas to criminal conduct, and could be called to testify against the former congressman.

Thomas Dodd, a former special assistant in Stockman's congressional office, pleaded guilty on March 20, 2017, to conspiracy to commit mail and wire fraud and make false statements and conspiracy to make conduit contributions. And Jason Posey, pleaded guilty Oct. 11 to mail and wire fraud and money laundering.

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Federal investigators allege that between from May 2010 and October 2014, Stockman solicited about $1.25 million in donations based on false pretenses. Stockman allegedly diverted nearly $285,000 donated to charitable causes to pay for his and Dodd's personal expenses.

One example outlined in court documents was a pitch to the director of a charitable group by Stockman and Dodd to construct Freedom House, a project to remodel a house in Washington D.C. where congressional interns could live and be trained. A donor wrote a check for $350,000, and within 24 hours Stockman began using the funds to pay off campaign debts and $32,000 in credit card debt owed by Dodd.

Buckley said he expected the trial would hinge on the context in which the donations were solicited and the allocations were spent. The government will argue that Stockman solicited funds and used them in a self-serving manner, using it for his political campaign or to cover his day-to-day expenses.

The government is expected to present evidence to show that Stockman set out intentionally to commit fraud. Stockman’s lawyer said he will argue that the expenditures were legal and handled correctly.

“You have to have the specific intent to defraud (someone),” Buckley said. “Our position is he never acted with an intent to defraud.”

“If someone said he could have exercised better judgment about how to use resources or better judgment about how to allocate funds that’s different,” he said.