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Hanging in the Balance

Mayor L. Douglas Wilder's missing gubernatorial campaign funds could determine his political future.



It's an epic nearly 20 years in the making, but it may turn out to be the city's political blockbuster of the year: What happened to $172,571.04 missing from Mayor L. Douglas Wilder's gubernatorial campaign fund?

The investigation into the unaccounted-for funds could determine whether Wilder is eligible to run for re-election.

For two years, the case of the missing money has failed to cool while it sat in Commonwealth's Attorney Michael Herring's office. In early May, Herring told Style his office had completed the investigation and was considering possible criminal charges against Wilder's son, Larry Wilder. He'd served as his father's campaign treasurer during his successful and historic run for governor in 1989.

Because Wilder's campaign failed to submit a final campaign-finance report, there's no record resolving the campaign's last distributions.

In 2004, the State Board of Elections referred the case to Herring's office as required by law. Since then, Herring says, the investigation has been contained within tight parameters. It used only information available in the files forwarded by the State Board of Elections.

Aside from the fate of Larry Wilder — Herring says a decision on whether to pursue charges against him is imminent — what's left unresolved is how to close the files on those old election reports. The answer to that question is of central importance to the Board of Elections.

It may be of even greater importance now because of campaign-law changes that went into effect July 2006.

The new law dictates that no candidates may qualify for office — or be certified to hold that office — if they've failed to file any campaign-finance reports, pay fines for late filings or return leftover contributions that may be required.

The code stipulates that "no officer authorized by the laws of this Commonwealth to issue certificates of election shall issue one to any person determined to be elected to any such office, until copies of the reports cited have been filed as required in this [law]."

When Wilder ran for his first term as mayor, the law applied only to candidates for statewide office and not an office like city mayor, state election officials say.

Now that it applies to all candidates, however, its effect on Wilder's re-election is a giant question mark. Wilder has hinted strongly in recent months that he will run again.

Whether he could run may hinge on the outcome of Herring's investigation.

"The matter is in the hands of the commonwealth's attorney, so we don't have any comment on whether [Wilder] would qualify," says Chris Piper, administrator of the election board's campaign finance division. "The matter is out of the state board's hands."

State code, as Piper says, spells certain things out: "The law states that if there are any missing campaign finance reports, [candidates] can't be issued any certificates of elections."

And Wilder has missing campaign finance reports.

On Jan. 15, 1999, Larry Wilder, then-gubernatorial campaign treasurer, filed his final finance report with the state board. He reported a $41.75 deposit Dec. 31, 1998, and a campaign treasury balance of $172,571.04. The deposit was interest paid on Wilder's campaign account by Consolidated Bank & Trust, the Richmond bank that still holds the account.

Like the Consolidated account, the campaign remained open and active, with no final report to the state board to close it out.

Six years elapsed before a statewide review conducted by election officials discovered 70 delinquent accounts, Wilder's among them. Most were cleared quickly with a few phone calls to the former candidates, who filed their reports and/or paid necessary fines.

Resolving Wilder's problems wasn't so simple. His treasury balance was by far the largest of the delinquent accounts, and when asked to report on its status, Wilder's campaign was unable — or unwilling — to provide the records, other than to report that the money it was supposed to have simply wasn't there.

Instead, between that last report in 1999 and 2005, when the board asked for an accounting, the $172,000 had shrunk to $2,571.04.

In March 2005, Larry Wilder resigned from the campaign's treasurer's post, saying in a letter to the election board that he was "no longer in possession of the [bank] materials."

Enter Paul Goldman, Wilder's longtime adviser. In a conversation with the state board, documented in an internal office memo, Goldman told officials that the missing "$170,000 went to Larry" and reported the remaining balance of just over $2,500.

Initially, Goldman suggested this amount would be transferred to the Wilder for Mayor campaign in order to allow the Wilder for Governor campaign account to be closed. But the possibility of penalties for the delinquent reports appears to have changed Goldman's mind.

In a final letter to the board in August 2006, Goldman reported his resignation as treasurer and the intention to leave the election account — as well as the Consolidated bank account — open with a balance of $3,289.32 to pay those fines.

After Goldman's final report, the election board's leadership met, getting legal advice on the matter from the state attorney general's office. State election officials then decided that any fines that might be outstanding would need to be determined by the Richmond commonwealth's attorney, which prosecutes all statewide campaign finance violations.

That's where things have stood until now. The file the election board forwarded to Herring's office is a slim one. Piper confirms that his office simply sent copies of its files, which contain fewer than a half-dozen official letters from Larry Wilder and Goldman to the board, a handful of internal memos and letters between election officials, and campaign reports from 1996 until Wilder's final 1999 report. It also contains Goldman's only report in 2006 providing an update.

But Herring says this less-than-three-inch stack has overwhelmed his office. And it's the same stack that Herring told Style was all his office would consider as evidence in weighing a decision to prosecute Larry Wilder.

Herring's office, contacted again for this story, did not return calls by press time. Mayor Wilder's office similarly did not return calls.

But those close to Wilder's past political efforts — both as supporters of his election bids and as appointees within his administration — say Herring's office has reason to stall on its decision. They also say Herring should never have accepted the task of reviewing the matter — he has admitted to having close ties to the Wilder family — and that he should immediately have brought in a special prosecutor.

One called it "worse than home cooking," saying that the whole matter "stinks."

"It appears to me that Herring may be attempting to cover up the lawbreaking," says one person who previously worked for Wilder's campaign. "Mike is way too close to Wilder, his son and daughter to be impartial."

Herring told Style his friendship with Wilder's daughter drove him to ask his assistant, Chris Bullard, to pursue the investigation. He also said that Bullard doesn't intend to subpoena any of Wilder's campaign account bank records from Consolidated Bank & Trust, records that Goldman told the state election board no longer existed. Instead, Herring insists that Bullard has constructed "a day-by-day accounting" of the money in the account. He adds that Bullard has determined "where the money went."

What he didn't say was whether his office would give an opinion on the state election board's question: What should it do to rectify its accounts, to close the matter and provide Wilder with the clean slate he may need to run for re-election? S

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