Grand jury indicts Republican chairman

MINNEAPOLIS (AP) -- Minnesota Republican Party Chairman Ron Eibensteiner has been indicted by a grand jury in connection with an alleged improper corporate campaign contribution, his lawyer said.

Attorney Bill Mauzy said Thursday that special prosecutor Earl Gray called him Wednesday afternoon to tell him that the Mower County grand jury, which convened Wednesday morning, had indicted Eibensteiner on four gross misdemeanor criminal counts.

Mauzy said he hadn't seen the charges because they were part of a sealed indictment. But he said he believed the party chief was accused of aiding and abetting an illegal corporate contribution by American Bankers Insurance Co. of Florida.

Gray declined to comment on the status of the case, and Mower County Attorney Patrick Flanagan Flanagan did not return a call from The Associated Press on Thursday.

Eibensteiner called the indictment "preposterous" but declined further comment.

Mauzy said there was no basis for the indictment and that he would move immediately to have the charges dismissed.

"There is no crime here," he said. "We have a runaway grand jury."

At issue is a $15,000 campaign contribution that American Bankers Insurance Co. made last September and intended to benefit the campaign of gubernatorial candidate Tim Pawlenty.

The check was made out to the Republican National State Election Committee, Mauzy said, and "mistakenly" sent to the state Republican Party. Eibensteiner sent the contribution to the national party, where it was deposited in an account separate from funds destined for the Minnesota elections, Mauzy said.

Minnesota law prohibits corporate campaign contributions.

"It is our belief that no crime took place," Mauzy said. "This was a corporate contribution to the national Republican Party, so no Minnesota crime took place. There was nothing improper about this contribution."

Mauzy said he suspected other people had been charged, too, but that Gray had not told him so directly.

"If there is an aider and abetter, there has to be a principal," Mauzy said.

Tim Thornton, a lawyer for American Bankers Insurance, refused to confirm or deny whether the company had been indicted, but acknowledged having spoken to Gray.

Mauzy challenged the authority of the Mower County attorney to impanel a grand jury. "There is simply no connection to Mower County," he said. "They have no jurisdiction in this matter."

State law, Mauzy said, requires an alleged offense to have taken place in the same county where charges are brought.

"It's obviously a politically motivated deal," Thornton said of the county probe.

The indictment is the latest flashpoint in a feud between Gov. Pawlenty and other Republicans, on one hand, and DFL Attorney General Mike Hatch.

The dispute erupted in February, when Pawlenty's Commerce Department came under fire from a previous commerce chief and Hatch for allegedly giving a lighter penalty to American Bankers Insurance in a consumer fraud case because it had attempted to donate to Pawlenty's campaign. The Pawlenty administration denied any connection between the contribution and the enforcement action. A report by the nonpartisan legislative auditor in May said it could not substantiate any connection.