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FBI looking to see if lawmaker misused funds

A senior federal law enforcement official says the FBI is investigating whether federal money was misused when Democratic Congressman Tim Mahoney hired a mistress to work in his office.
/ Source: The Associated Press

The FBI is investigating whether federal money was misused when Democratic Congressman Tim Mahoney hired a mistress to work in his office, a senior federal law enforcement official said Thursday.

Federal agents also are examining whether a second affair Mahoney was having with a high-level official in his Florida district was behind his push for federal funds for her county.

The official spoke to The Associated Press on condition of anonymity because of the sensitivity of the investigation.

The FBI is investigating whether Mahoney put his first mistress on the federal payroll so she wouldn't reveal their affair.

The source said the other issue is whether Mahoney benefited sexually in return for spending or securing federal money.

Mahoney's attorney said Wednesday that the lawmaker did not use campaign funds to buy the silence of a former aide.

Mahoney, a wealthy venture capitalist, used his own money to pay Patricia Allen and her attorneys $121,000 when she threatened to file a lawsuit after Mahoney fired her from his campaign staff earlier this year, said his lawyer, Gary Isaacs.

In his most recent financial disclosure form filed with Congress, Mahoney listed his net worth as between $3.2 million and $12.7 million.

Isaacs provided documentation of the payments to The Associated Press in an attempt to quash rumors that Mahoney, 52, may have used campaign money to pay off Allen, which could be illegal. At the very least, Republicans charge, it would be highly unethical.

Second affair?
Mahoney, a first-term Democrat, also faces allegations of a second affair as he is embroiled in a tough re-election challenge in a district that traditionally leans slightly Republican.

A person close to Mahoney's campaign told the AP that Mahoney was having a relationship with a high-ranking official in Martin County in his Florida district in 2007.

At the time, he also was lobbying the Federal Emergency Management Agency for a $3.4 million reimbursement for hurricane damage there. FEMA approved the money late last year.

Mahoney's congressional staff declined comment on that alleged tryst, but noted Mahoney lobbies for FEMA funding throughout his district, and that Martin County has received $43 million from FEMA since 2004. Mahoney didn't take office until 2006.

Mahoney won his seat while promising to return morals and family values to Washington after former Republican U.S. Rep. Mark Foley resigned amid revelations that he sent lurid Internet messages to male teenage pages on Capitol Hill. Foley was later cleared of criminal wrongdoing.

On Wednesday, Isaacs showed The Associated Press canceled checks and wire transfers from Mahoney's personal account to him. He also provided documentation that shows the money was then sent to Allen's attorney to resolve the issue.

Filings show legitimate uses
An AP review of Mahoney's federal elections filings appeared to show that his campaign expenditures were for fundraising, advertising, polling and other legitimate uses and none went to Allen as part of the settlement.

While Mahoney clearly fired Allen, 50, the settlement also called for her to sign a letter of resignation indicating she left amicably.

All told, according to Isaacs, Mahoney spent $141,903 to resolve the Allen matter — $61,903 to Allen; $60,000 to her attorney; and $20,000 to his own attorney. The settlement also included a confidentiality agreement that prohibits both parties from discussing the details.

Isaacs spoke to AP two days after ABC News reported Mahoney's affair with Allen. Mahoney has not returned calls for comment and has not directly confirmed the affair. He said in a statement earlier this week he takes "full responsibility for my actions and the pain I have caused my wife Terry and my daughter Bailey."

After the report, Mahoney called for a House Ethics Committee investigation of his own conduct and said he would be cleared of wrongdoing. House Speaker Nancy Pelosi also called for an investigation.

Several people close to Mahoney have confirmed to AP the congressman began his affair with Allen in 2006 while campaigning for Congress. Mahoney campaign staff say she was fired for performance issues, not because of the affair.

That's when she threatened to sue. Mahoney reached the settlement with Allen to avoid a public airing.

Allen has not returned repeated telephone calls. Her attorney also did not return a telephone message Wednesday.