Gov. Tim Pawlenty, Sens. Norm Coleman and Amy Klobuchar and Rep. Jim Oberstar on Thursday all washed their hands of thousands of dollars in political donations from Petters to their campaigns or political action committees.
Petters, the founder of Petters Group Worldwide, is charged with mail fraud, wire fraud, money laundering and obstruction of justice.
His attorney has said Petters denies wrongdoing, but according to court documents and testimony, for 14 years Petters has been the mastermind behind a scheme that duped investors of more than $3 billion.
Petters' political giving was prolific. According to federal records, he spread $226,000 around to federal candidates, party accounts and political action committees since the beginning of this decade.
In that same period, Petters pumped nearly $200,000 into state-level campaigns, Minnesota records show. Most of those donations went to the GOP, including $50,000 checks to the state Republican Party and the campaign committee for state House Republicans. Democrats received at least $70,000 from him.
A statement on Thursday from the Pawlenty for Governor Committee said the campaign was returning $4,000 in donations from Petters.
Luke Friedrich, press secretary for Coleman's re-election campaign, said the senator was donating $14,600 to the Boys and Girls Club. That includes $4,600 that Petters donated to Coleman's current re-election campaign, and $10,000 that he donated to Coleman's political action committee.
Tom Perron, who was finance director for Klobuchar's 2006 campaign, said she directed the donation of a total of $19,500 to various charities - $5,000 that Petters gave in August to Klobuchar's political action committee, and $14,500 that Petters and several of his indicted colleagues had donated to Klobuchar's 2006 campaign.
The $5,000 to Klobuchar's PAC went to the American Red Cross, Perron said. The other $14,500 was split among four beneficiaries: $3,500 to Big Brothers Big Sisters; $4,000 to the Red Cross; $3,500 to Habitat for Humanity; and $3,500 to the Pacer Center, an advocacy group for children with disabilities.
Perron said Klobuchar felt it was important to get rid of the donations "given the serious nature of the charges."
Oberstar, a Democrat, plans to donate the $3,300 he's received from Petters to charity. Political director Blake Chaffee said Oberstar hasn't picked a charity yet.
Prosecutors say Petters and his associates created phony retail transactions to lure investors. The scheme involved Petters Co. Inc., a unit of Petters Group.
Petters Group Worldwide had $2.3 billion in revenue in 2007. The company has investments in dozens of companies. Its holdings include Polaroid and Sun Country Airlines, which filed for Chapter 11 bankruptcy on Monday after it couldn't turn to its parent company for a short-term loan because of the federal investigation.
Petters resigned as chairman and CEO of Petters Group before his arrest last week. And on Wednesday, a federal magistrate judge ordered that Petters must remain in custody until the time of his trial.
Petters Group's assets have been frozen and the company has been placed in receivership.
David Anderson, a spokesman for the U.S. Attorney's Office, said any contributions that are returned would go into the receivership estate and eventually could "be part of any kind of restitution that is awarded back to potential victims."
(Copyright 2008 by The Associated Press. All Rights Reserved.)