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Eibensteiner acquitted

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Former state GOP Party Chair Ron Eibensteiner was acquitted Tuesday on charges he violated state campaign finance laws. (MPR file photo)
It took an Olmsted County jury just three hours to acquit former Minnesota Republican Party Chair Ron Eibensteiner. Prosecutors accused Eibensteiner of facilitating an illegal corporate campaign contribution. After the trial, Eibensteiner said the case was politically motivated.

Rochester, Minn. — Moments after the jury announced its verdict, Ron Eibensteiner was beaming.

"Obviously the jury saw it our way, and it was a brilliant decision by the jury," he said.

Prosecutors alleged Eibensteiner arranged an illegal corporate donation from American Bankers Insurance Company of Florida to the Pawlenty for Governor campaign in 2002.

The judge said in order to find Eibensteiner guilty, the prosecution had to prove he had intentionally aided the contribution or knowingly received it.

The prosecution's case revolved around two pieces of evidence. One was a letter signed by Eibensteiner sent to American Banker lobbyist Ron Jerich. The letter thanks Jerich for the $10,000 contribution to the Republican National State Election Committee in Washington D.C.

The second piece of evidence was a copy of the check made out to the national committee, but addressed to a Minnesota Republican party satellite office in St. Paul.

In his closing arguments, special prosecutor Earl Gray said the note constituted a solicitation of funds and proved Eibensteiner knew about a corporate contribution to the state. He also said the check's address proved that it was intended to be used by the state party.

When Eibensteiner took a stand in his own defense he said the note was one of hundreds he'd signed, and he had no recollection of a special note for Jerich.

While the prosecutors tried to portray this as a Republican Party conspiracy, Eibensteiner said the real wheeling and dealing was done by attorney general Mike Hatch, a DFLer.

"If you listen to all the court testimony, obviously Hatch was the fellow who perpetrated this whole thing," Eibensteiner said. "He's the guy who leaked the story to the St. Paul Pioneer Press. He's the one who set the whole thing in motion."

Hatch was the prosecution's first witness. On the stand, he said he passed the Ron Jerich letter to the solicitor general for investigation but took no further part in the case. Hatch also said a member of his staff apparently gave a copy to the Pioneer Press. Hatch is running for governor in next year's election.

In his closing arguments, defense attorney Bill Mauzy said the prosecution completely failed to show Eibensteiner had any connection to the insurance company's donation. After the verdict, Mauzy said there was little basis for the charges.

"I think this case demonstrates that when politics hits the criminal justice system, it's with a splash," he said. "Rarely is there evidence to back up the allegation, but the damage is done when the allegations are made."

A spokeswoman for Mike Hatch declined to comment.

But Brian Melendez, chairman of the DFL Party, said the criticism of Hatch was unwarranted.

"Mike Hatch was a witness in the case. The Mower County attorney made the decision to prosecute. Hatch did not," Melendez said. "Our criminal justice system is set up in such a way that the attorney general has very little to do with prosecution at this level.

"The criticism of Mike Hatch is misdirected. Its seems more likely to me that the criticism is more politically motivated than the prosecution was," Melendez said.

During the trial, a representative of American Bankers admitted the company made donations to the Republican and the Democratic parties to curry favor with both of them.

The company was in trouble with the Minnesota Department of Commerce during the Ventura administration. The state alleged American Bankers overcharged customers, and the company was hoping for a change in the commerce commissioner.

American Bankers eventually settled their dispute with the Department of Commerce for $200,000, plus court costs totaling $1.8 million. Mauzy said he found it ironic that the state settled with American Bankers and yet prosecuted Ron Eibensteiner.

"I think at a minimum it's ironic to take a million-dollar payment from a corporation that you're prosecuting for making an improper political contribution of $15,000," he said.

After the verdict, special prosecutor Earl Gray had no comment. However his colleague Patrick Flanagan said they respected the jury's decision.

(The Associated Press contributed to this report)

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