Inside Politics

COLORADO

Lawmaker gets jail for tax evasion

DENVER —- The father of Colorado’s Taxpayer Bill of Rights was sentenced Monday to 180 days in jail and six years of probation for evading state taxes.

Douglas Bruce, a former Colorado lawmaker, said state officials went after him for promoting smaller government. He vowed to appeal.

“This is not the end. This is just — what do they call? — a strange interlude,” Bruce said. He was ordered to report to jail Friday.

Bruce was sentenced after his felony convictions for evading state taxes, filing a false return, and failing to file a tax return between 2005 and 2010.

Prosecutors said he hid millions of dollars in a sham charity he set up to avoid taxes.

Bruce was also ordered to pay nearly $50,000 in restitution and court costs, and to share personal financial information with the government, including his checking accounts and investments. His jail term comes from two consecutive 90-day terms.

CAMPAIGN

Romney’s top bundlers remain anonymous

Despite criticism of Fannie Mae by Republican presidential candidate Mitt Romney, his campaign accepted nearly $280,000 in donations raised by a registered lobbyist who once represented the government mortgage giant and whose clients now include a private equity firm and the drug company Pfizer.

Yet Mr. Romney has not identified all of his so-called fundraising “bundlers” who have raised hundreds of thousands of dollars, even after President Obama’s re-election campaign released the names of his top fundraisers. Rick Santorum and Newt Gingrich also haven’t disclosed their bundlers. Ron Paul’s campaign has said it doesn’t use them. For more than a decade, since the election of George W. Bush in 2000, presidential campaigns have identified their bundlers.

In an age of super PACs, which can pull in millions of dollars from anonymous donors, bundlers still matter to modern presidential campaigns. These well-connected executives collect or direct multiple individual contributions of up to $2,500 to a campaign in amounts that can range from $50,000 to more than $500,000. Wayne Berman, the chairman of Ogilvy Government Relations and a former Fannie Mae lobbyist, gathered $279,075 for Mr. Romney in 2011.

The lack of disclosure prevents voters from knowing who wields influence within a presidential campaign. Keeping their identities secret could end up stinging Mr. Romney — like the mishandled release of his income tax returns — if voters conclude he is withholding politically damaging information.

Federal law requires only that candidates disclose the identities of bundlers who also are registered lobbyists, which the Romney campaign has done. Mr. Berman and 15 other lobbyists representing a wide range of interests raised nearly $2.2 million for Romney in last year, according to Federal Election Commission records. Their clients included investment firms and a mortgage processing company accused of “robo-signing” foreclosure documents.

But just as disclosing income tax statements is commonplace for leading presidential candidates, voluntarily identifying bundlers has also become standard practice.

DEFENSE

Panetta defends military budget plan

Defense Secretary Leon E. Panetta is defending his department’s slimmed-down, $614 billion budget plan, telling senators that it’s time to step up and show they are serious about reducing the deficit.

In testimony prepared for a Senate Armed Services Committee hearing Tuesday, Mr. Panetta is warning lawmakers that budget cuts will affect all 50 states. But he says the reductions have been carefully planned, thus there is little room for changes.

Mr. Panetta and Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, can expect to meet resistance from lawmakers who have expressed reservations about gutting defense and eroding the country’s national security. The proposed defense budget for the year beginning Oct. 1 includes $525.4 billion in base spending and another $88.5 billion for the wars in Afghanistan and Iraq. The total is nearly $32 billion less than this year’s budget.

FHA

Agency could run out of cash in 2012

The Federal Housing Administration could run out of money over the next year and require a $700 million cash infusion from the Treasury Department to stay afloat, according to the Obama administration’s budget request sent Monday to Congress.

But administration officials said $1 billion from the government’s $25 billion mortgage settlement with the nation’s largest banks would be used to replenish the agency’s reserves.

The FHA’s losses have increased as more homeowners have defaulted on their loans. The FHA does not make loans but rather offers insurance against default. Borrowers are willing to pay for the insurance because FHA loans only require down payments of 3.5 percent of the purchase price.

Agency officials say they are making more loans to more creditworthy borrowers. But critics say those borrowers are still vulnerable to default, particularly if unemployment remains high and home prices continue to lag.

The agency is vital for the housing market because it insures roughly 30 percent of new loans and is the largest back of mortgages to first-time buyers. The FHA is expected to raise its insurance premiums this year.

DEA

Judge: Agency must explain suspension

A federal judge Monday ordered the Drug Enforcement Administration to explain its rationale for trying to shut down a Florida pharmaceutical distribution center.

U.S. District Judge Reggie B. Walton said at the end of a hearing that he will give the DEA until the end of next week to submit its reasoning for issuing an order against the distribution center run by Cardinal Health Inc. so he can determine whether it was appropriate.

Judge Walton said he wants to make sure the DEA is not shutting down a business without due process, and he can’t determine that from simply reviewing the suspension order without more information from the agency.

To combat the abuse of pain pills such as oxycodone, the DEA issued orders earlier this month to suspend the sale of controlled substances by two CVS pharmacies in the Orlando area and Cardinal Health’s Lakeland-based center that supplied drugs to the stores. The agency said the pharmacies were dispensing a voluminous amount of oxycodone far in excess of legitimate needs — the first time stores in a national pharmacy chain were targets of suspension orders to fight Florida’s prescription drug abuse problem.

But CVS and Dublin, Ohio-based Cardinal Health persuaded federal judges to halt the DEA’s suspension efforts. The companies argued the agency did not demonstrate an imminent danger to public safety required to shut down their sales and in fact could harm public health by cutting sick patients off from their medicines.

• From wire dispatches and staff reports