Caught in a feud
Should Obama dismiss a tainted fund-raiser?
One faction wants Obama to oust fund-raiser Michael Bauer from his finance committee and from a panel that advises the campaign on gay and lesbian issues.
The other faction respects Bauer as a nationally known fund-raiser who serves on U.S. House Speaker Nancy Pelosi’s finance committee as well as Obama’s and Sen. Dick Durbin’s. He was a delegate to the 2000 and 2004 Democratic National conventions.
Bauer’s critics note he is serving the seventh month of a nine-month suspension of his law license for taking $300,000 from his nieces’ and nephew’s trust fund. The nieces and nephew sued to have Bauer removed as trustee, saying he would not tell them what he did with the money. Bauer was never charged with any crime.
During the same time he was taking money from the trust fund, his donations to national and local candidates totaled $300,000. But Bauer said the trust fund money went into his failing court-reporting business, not into donations.
“It’s a family dispute, and I don’t think it’s anybody’s business,” said Bauer, 54, a consultant to the Res Publica public relations group. “My brother consented to me taking the money out. . . . I had a business at the time that was losing a lot of money. It was to try to keep the business afloat until I could sell it.”
The state agency that disciplines lawyers saw Bauer’s actions as a serious violation. Out of 4,000 complaints against lawyers last year, it disciplined only 144. Bauer’s nine-month suspension for “conduct which tends to . . . bring the courts or the legal profession into disrepute” was one of the more severe punishments.
Bauer signed a statement in July admitting he never asked his brother’s permission to write $197,000 in checks to himself from the trust. Bauer now says he only signed that to end the case. He says he got his brother’s OK.
“It is beyond me how you could have someone on your finance committee who has raided his nieces’ and nephew’s trust fund,” said Bauer rival Rick Garcia of Equality Illinois. “I’m a strong Obama supporter, and I conveyed my concerns to Obama’s people as far back as a year ago and as recently as April.”
Garcia is one of seven politically active gays who told the Sun-Times Obama should dump Bauer.
“It’s like the [Tony] Rezko thing: It’s association with someone he perceives might be able to do him some good, but somebody who has a tarnished image,” said Louis Weisberg, founding editor of the gay-oriented Free Press. “Between Rezko and Bauer, I wouldn’t vote for Obama. I question his judgment.”
Garcia and Sidetracks nightclub owner Art Johnson — another activist in the gay community — have both asked the Obama campaign to dump Bauer.
But Obama is standing by Bauer, who raised $60,000 for him this year.
“Mike has been a leader in the community and a good supporter of our campaign and many others. He is working through this difficult, private challenge with his family, and we wish them well,” Obama spokesman Bill Burton said.
Bauer’s business, Espiritu & Associates, got $650,000 in city, state and county contracts from 2002 to 2005. But the company struggled. Bauer took out a $100,000 home equity loan and went $300,000 into credit card debt. He loaned himself $100,000 from the trust fund in 1997, defaulted on it in 1999, then wrote himself $197,000 in checks from the fund from 2003-2004.
From 1999 to 2006, Bauer gave $300,000 to candidates including $15,000 to Attorney General Lisa Madigan and $10,000 each to Gov. Blagojevich and Cook County State’s Attorney Dick Devine.
Bauer’s nieces and nephew dropped their suit against him when Bauer pledged that after his mother dies, he will use his expected inheritance to pay back the $300,000. Their attorney felt he had to report Bauer’s actions to the state lawyer disciplinary board. The nieces and nephew wrote the board asking that their uncle not lose his license for his “lapse in judgment.”
Former state Rep. Larry McKeon said Garcia and Johnson are exploiting Bauer’s law license suspension because of a personal falling-out. McKeon always refused their entreaties to keep Bauer off his committees.
“In the gay and lesbian community, in the HIV/AIDS community, in the Jewish community, Bauer is very highly regarded,” McKeon said. “Is he controversial? Sure he is. And more power to him.”
Abdon M. Pallasch is the legal affairs reporter for the Chicago Sun-Times.