Coleman denies claims that donor funneled money to his wife

Coleman denies allegations
At a news conference in Moorhead today, U.S. Sen. Norm Coleman denied allegations in a lawsuit that a friend and donor funneled $75,000 to an insurance company that employs Coleman's wife.
MPR Photo/Dan Gunderson

Coleman rearranged his campaign schedule to give reporters an angry response to the allegations that a friend and contributor funneled money to him through his wife's employer.

"In a few days we will have one of the most important elections of our time," he said. "But instead of focusing on the issues my opponent and his political allies want to divert attention away from this campaign with a false and malicious political attack."

Coleman said he and his family are the victims of an outrageous smear campaign. He said the allegations were delivered to newspaper reporters before the lawsuit was even filed and he believes Democrats are behind the charges.

"And I just want to make it very clear, we've got an election in three days. I know Minnesotans," he said. "They will reject this, see it for what it is. These are sleazy campaign tactics that pop up three days before an election, and I am very confident that Minnesotans will reject this. This is not the way that we campaign in Minnesota."

[I believe Minnesotans will] "see it for what it is - sleazy politics - and reject it out of hand."

The lawsuit was filed by Paul McKim, the former CEO of Deep Marine Technology. That's an oil services company that offers underwater construction and maintenance services in the Gulf of Mexico, the North Sea and Brazil. It has four ships and several manned submarines.

McKim founded the company and claimed in his lawsuit that one of his investors, Nasser Kazeminy, took over the firm and started diverting funds to other companies, including a major Louisiana shipping firm. Kazeminy was at the center of another controversy earlier in this election season, when critics alleged he'd purchased thousands of dollars in clothing for Coleman.

The lawsuit focuses on the struggle over management of Deep Water Technology. But McKim also said that Kazeminy ordered Deep Marine Technology to pay $100,000 to a Minneapolis insurance consulting firm where Coleman's wife, Laurie, works.

The lawsuit includes two exhibits purportedly showing $50,000 in payments to the company, as well as ledger entries showing another $25,000 payment.

The lawsuit also includes a copy of a service agreement between Hays and Deep Marine Technology for insurance consulting. McKim alleges that Kazeminy called Deep Marine Technology's chief financial officer and ordered the payments.

Norm and Laurie Coleman
U.S. Sen. Norm Coleman, R-Minn., and his wife Laurie, outside their St. Paul home.
MPR Photo/William Wilcoxen

Kazeminy allegedly told the chief financial officer they were actually meant for the Coleman family.

McKim was forced out of the company and his attorney, Casey Wallace, told Minnesota Public Radio that there had been at least two unsuccessful rounds of settlement negotiations between McKim and the firm's owners.

Neither attorneys for Kazeminy or the Hays Companies returned calls seeking comment on the suit.

Coleman said that his wife never received any money Deep Marine Technologies and that she didn't handle the company's account for Hays Companies.

McKim's lawyer denied the litigation has anything to do with politics.

At a campaign rally at the University of Minnesota Duluth, Al Franken denied any connection to the allegations.

Franken's campaign insists it was not aware of the the lawsuit until reporters confronted Coleman about it earlier this week at a campaign stop in St. Cloud.

But what Coleman called "sleazy campaign tactics," Franken called serious sworn allegations.

"These are made under oath in a lawsuit, and I do think that Sen. Coleman is going to have to answer these charges before the election," he said. Independence Party candidate Dean Barkley said nothing surprises him in politics these days, and that he suspects Minnesota voters are so cynical about the Senate race that the allegations are not likely to have a big impact.

"I don't now if it's true or not," said Barkley. "If it is true hopefully that lawsuit will bring out the truth. Norm is assumed innocent until proven guilty, but it does disturb me, the fact that they may be doing some things behind the scenes."

Carleton College political science professor Steven Schier said he's suspicious about the timing.

"It's not clear whether there is a serious controversy here or not, but the fact that it's occuring four days before an election, I think, indicates that it's being done to have a political effect," he said.

According to the latest Minnesota Public Radio News/ University of Minnesota Humphrey Institute poll, Coleman and Franken are in a statistical dead heat.

Schier said 11th hour campaign revelations can tilt elections, but he suspects, given the tone of Minnesota's 2008 Senate race, voters will look skeptically at the story.

"I think the public, as they watch this, and they've been hearing a lot about this Senate campaign, too much for too long, I have a feeling that it's not going to be easy to convince voters with last-minute news of this sort one way of the other," he said.

Schier said he wishes the news media could determine the facts of cases like this before reporting the story, but information about the case is all over the Internet. Voters will likely have to make their own judgement on how seriously the charges should be taken.