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July 9th, 2008 NIGEL JAQUISS | News Stories
 

Craig’s List

Former Oregon GOP bigwig who owes millions to fraud victims continues donating cash to McCain, other Republicans.

     
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NO LONGER ATOP THE WORLD: Craig Berkman in happier times two years ago in New York City.
IMAGE: ROBERT CAPLIN

Former Oregon Republican Party chairman and one-time gubernatorial candidate Craig Berkman owes millions to some of Portland’s wealthiest investors—but that hasn’t stopped him from making generous political contributions to Sen. John McCain and others.

Last month, in Multnomah County Circuit Court, a jury found that Berkman had defrauded local investors—including timber baron Peter Stott, real-estate heir Jordan Schnitzer and former barge line owner Peter Brix—and a large British Columbian public pension fund.

Jurors concluded Berkman, 66, defrauded investors and must pay them a total of $28 million for using their money as his own and lying to them about the failure of various companies in which he invested.

Their verdict came as a humbling defeat for Berkman. Once known as Oregon’s leading venture capitalist, Berkman admitted to WW two years ago that after two decades of making impossible promises to investors, he dipped into their funds for personal use (see “The Talented Mr. Berkman,” WW, Jan. 25, 2006).

In a financial statement [PDF] Berkman submitted at trial, Berkman claimed personal assets of $6 million and liabilities of $18 million—before the $28 million judgment against him.

But despite his personal indebtedness of $12 million, Berkman opened his wallet often in this election year from his adopted 12,000-square-foot lakefront home in Florida.

Records show Berkman, who was Oregon’s GOP chair from 1989 to 1993 and placed second in the party’s 1994 gubernatorial primary, continued his longtime pattern of hefty political contributions.

Over the past year, according to Federal Election Commission filings, he and his new wife, former New York beauty queen Mary Ann Farrell-Karlsson, have given $50,000 to Republican causes.

The biggest individual beneficiary was McCain, a campaign finance reform advocate in the years after he was caught up in the “Keating Five” scandal in 1989.

Berkman maxed out his donations to McCain, the eventual Republican presidential nominee. Records show he gave McCain $2,300 in July 2007 for the primary and another $2,300 in March 2008 for the general election. He also gave $4,600 to McCain’s “compliance” funds in 2008 for a total investment of $9,200.

Berkman wrote his biggest check—$23,990 to the Republican National Committee on May 29. That was three weeks after his fraud trial began, and two weeks before the jury’s verdict.

The contributions shock the Portland lawyer who spent five years preparing a case against Berkman.

“Jesus, you’re kidding,” said Stephen English of the Bullivant Houser Bailey law firm when WW told him about Berkman’s munificence. “We certainly hope this is a reflection that Mr. Berkman has the money to pay what he owes to his investors as well.” Over the past year, Berkman and his wife also gave the maximum $2,300 allowed in federal races to unsuccessful Republican presidential candidates Mike Huckabee and former New York City Mayor Rudy Giuliani.

Last July, Berkman wrote his second largest check, giving $10,000 to the Republican Party of Florida.

He had moved from the Northwest to Florida in 2005, buying a $3.9 million home in the Tampa-area town of Odessa. In addition to good weather and lots of potential investors, Florida has historically had a favorable “homestead law” which protects a homeowner’s property from creditors. English says the timing and direction of Berkman’s relocation was probably no accident.

“It is very likely that Mr. Berkman knew we were preparing to file a lawsuit against him,” English says.

Berkman paved the way for a friendly reception in the Sunshine State. Records also show he gave $5,000 to the Republican Party of Florida in 2002 and $2,000 to the 2004 U.S. Senate campaign of Katherine Harris, the former secretary of state notorious for her role in the state’s Bush-Gore recount fiasco in 2000.

Judging by an invitation [PDF] from earlier this year, Berkman also appears to have become a part of the Florida political establishment.

On Jan. 29, according to an invitation archived on McCain’s website, Berkman joined U.S. Sen. Mel Martinez (R-Fla.), Florida Gov. Charlie Crist and current U.S. Ambassador to Portugal Al Hoffman in hosting a $1,000-a-plate fundraiser in Tampa for McCain.

Berkman’s attorney, Paul George, did not return a call seeking comment.


FACT: In 1988, Berkman cemented his position as a political player by donating $100,000 to George Bush Sr.’s presidential campaign. In 1994, he placed second in the Oregon Republican primary for governor, losing with 44 percent of the vote to Denny Smith.
 
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