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Republican leader loses another round in campaign finance case
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Ron Eibensteiner has denied wrongdoing and questioned whether politics led to the charges. (MPR file photo/Tom Scheck)

St. Paul, Minn. — (AP) The Minnesota Supreme Court revealed Thursday it won't hear an appeal from Republican Party chairman Ron Eibensteiner, who is fighting gross misdemeanor charges in a campaign contribution case stemming from the 2002 governor's election.

It appears that Eibensteiner's case is bound for trial unless he can reach an agreement before then. He was indicted in Mower County in October 2003 over his role in a Florida insurance company's illegal contribution intended to help Tim Pawlenty's campaign.

Mower County Judge Fred W. Wellmann dismissed the case last April, but it was reinstated in December by the Court of Appeals. The Supreme Court's denial of the appeal was made Tuesday but not posted on the court's Web site until Thursday.

Eibensteiner has denied wrongdoing and questioned whether politics led to the charges. He wasn't immediately available for comment and his attorney didn't return a phone message.

"The indictment is not politically motivated. He's been indicted because he violated the law and we intend to fully prosecute," said special prosecutor Earl Gray, who is assisting Mower County attorney Patrick Flanagan in the case.

Gray didn't know when a trial would occur.

Eibensteiner is accused of facilitating a corporate contribution, which is illegal under Minnesota law. He faces four counts, each of which carries up to a year in prison and a $3,000 fine.

During the 2002 campaign, American Bankers Insurance Company made contributions totaling $15,000 to the Republican Party. The company, which was facing huge fines from Minnesota insurance regulators, contributed a similar amount through a national committee to assist DFL gubernatorial candidate Roger Moe.

The grand jury indicted Eibensteiner for aiding the contribution, partly on the basis of a "thank you" note he sent to an American Banker lobbyist. His lawyer, Bill Mauzy, maintains that the donations were mistakenly sent to the state Republican Party and Eibensteiner forwarded them to a national party account walled off from funds destined for the Minnesota elections.

In dismissing the case a year ago, Wellman said it didn't belong in Mower County. But prosecutors have contended that some of the money paid for advertising on an Austin television station.

In April, American Bankers settled with Mower County prosecutors in a related case over the donations. The company agreed to pay $1 million for the cost of prosecuting the case and the case against Eibensteiner. Flanagan has said any remaining money would go to the county.