While promising to put more Wall Street wrongdoers in jail, Democratic presidential front-runner Hillary Rodham Clinton pocketed the maximum campaign donation of $2,700 form former Waste Management CEO Phillip B. Rooney, who was part of a $30.8 million settlement to a financial fraud case by the Securities and Exchange Commission.
Mr. Rooney was cited with an $8.7 million share of the monitory relief and barred for life from serving as an officer or director of a public company as part of the 2005 settlement that ended SEC court action on allegations of cooking the books at the world’s largest trash hauler.
Mr. Rooney served as a top officer at the company for 28 years, beginning in 1969, and served as chief executive officer from 1996 to 1997, when he stepped down.
Mrs. Clinton not only collected cash from Mr. Rooney, who in the settlement did not admit or deny the SEC allegations of a “massive financial fraud,” but also took another maximum donation of $2,700 from his wife, Suzanne Rooney, according to federal campaign finance reports.
The Clinton campaign refused Monday to say whether it would return any of the money.
In a speech last week outlining her economic agenda, Mrs. Clinton vowed that, if elected president, she would crack down on Wall Street and more vigorously pursue criminal charges against corporate titans who break the law.
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“We will also prosecute individuals as well as firms when they commit fraud or other criminal wrongdoing,” Mrs. Clinton declared in the speech July 13 at the New School in New York City.
She took aim at Wall Street, which has been a close ally and campaign backer of Mrs. Clinton, a former U.S. Senator from New York, as she steered her presidential campaign to the left to appeal to the Democratic Party’s liberal base.
The party’s liberal base has demanded tough new laws to rein in Wall Street excesses and banks that are deemed too big to fail.
Mrs. Clinton remains the party’s all-but-inevitable nominee, with a big lead in the polls and a huge fundraising advantage. She raked in a record $47.5 million in the quarterly reporting period that ended June 30. Still, she faces a challenge on the left from Sen. Bernard Sanders, a Vermont independent, avowed socialist and longtime foe of Wall Street who has surged in the polls.
The SEC complaint against Mr. Rooney and three other former top officers at Waste Management Inc. alleged a massive financial fraud lasting more than five years, beginning in 1992 and continuing into 1997. The commission accused the men of a systematic scheme to falsify and misrepresent Waste Management’s financial results with profits overstated by $1.7 billion.
The fraud resulted in a restatement of profits in February 1998, which at the time was the largest restatement in history.
The alleged fraud artificially inflated the company’s stock price and garnered performance-based bonus pay for some of the company’s officers. The SEC noted that Mr. Rooney and Dean L. Buntrock, who preceded Mr. Rooney as CEO, avoided $3.5 million in losses from selling stock during the alleged fraud.
In addition to Mr. Rooney and Mr. Buntrock, the complaint named Thomas C. Hau and Herbert A. Getz as defendants.
The judgment entered in United States District Court for the Northern District of Illinois permanently barred the four defendants from acting as an officer or director of a public company, enjoined them from future violations of the antifraud and other provisions of the federal securities laws and requires payment of $30.8 million in disgorgement, prejudgment interest and civil penalties.
Waste Management agreed to pay $7.6 million of the fine for Mr. Rooney, leaving him to pay $1.1 million.
The Clinton campaign has returned other donations.
Her campaign on July 8 gave back a $1,000 donation from Allentown, Pennsylvania, Mayor Ed Pawlowski, six days after the FBI raided Allentown City Hall as part of an investigation of a pay-to-play scheme involving campaign donation and city contracts.
After the FBI raid, Mr. Pawlowski also suspended his U.S. Senate campaign.
• S.A. Miller can be reached at smiller@washingtontimes.com.
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