The Rutherford Institute, the conservative legal foundation paying Paula Jones' legal bills in her sexual
misconduct suit against President Clinton, has sent letters to a federal judge accusing the Paula Jones Legal Fund of misleading and possibly defrauding the
public in its fund-raising practices, Salon has learned.
The Rutherford Institute has also threatened to report alleged fraud by Jones' legal fund to the Internal Revenue Service and other authorities.
Rutherford's letters to the federal judge are under court seal and have not been previously disclosed.
The Rutherford Institute contacted representatives of
the Paula Jones Legal Fund late last year after it learned that money
raised by the fund to pay Jones' legal expenses was not going to the lawyers representing her in her lawsuit against Clinton.
Instead, the funds were going directly to Jones and to the direct-mail firm that is helping her legal fund attract contributions.
It has previously been reported that Jones signed a contract last November with Bruce W. Eberle and Associates Inc. of MacLean, Va., a conservative fund-raising business, which guarantees her a minimum net income of $300,000.
Sources familiar with the agreement say Jones already has been paid a $100,000 advance, as called for under the contract,
which also guarantees her another $200,000 from the donated funds. The
contract calls for the remainder of the donated funds to go to Eberle to
pay for the fund-raising effort.
The direct-mail appeal for donations to Jones' legal fund recounts her alleged 1991 encounter with Clinton in a Little
Rock, Ark., hotel room, where she claims then-Gov. Clinton dropped his pants,
exposed himself and asked for oral sex. Clinton has denied the charge, and
a trial is set for May 27.
In her direct-mail letter, Jones says any contributions to her legal fund are
not for her personal use. "It's all going to help my legal case," she writes.
Her legal fund also has a solicitation Web site, which promises donations will be used for
"litigation expenses ... depositions, investigations and court
But according to a source familiar with the institute's concerns, Rutherford has not seen a penny of the money raised by the Paula Jones Legal Fund. "As far as I know, the fund is still going strong, they're still mailing these letters and Rutherford hasn't seen any money," said the source.
After not receiving any money for Jones' legal bills and after
learning about Jones' contract with Eberle, the Charlottesville, Va.-based
Rutherford Institute became concerned that her legal fund's appeals for
contributions were misleading -- and possibly fraudulent -- and sent
letters late last year to Eberle and lawyers for the fund, expressing its
"The Rutherford Institute is on record with you, as counsel for the
Paula Jones Legal Fund, that the direct mail solicitations of the fund
create a false impression and mislead the public that others besides the
Rutherford Institute are paying court costs and legal expenses," said one
of the letters, which was obtained by Salon.
One person familiar with the correspondence put it more bluntly:
"We're talking mail fraud here, and that's just
unacceptable," the source told Salon.
Rutherford's letters also threatened to report the alleged fraud by
Eberle and the Paula Jones Legal Fund to the Internal Revenue Service, the
Better Business Bureau and attorneys general in all 50 states. "Whatever it
took to make them stop lying," this source said.
One of those who received Rutherford's letters was Braden
Sparks of Dallas, the legal fund's attorney. On Dec. 15, after only
three months on the job and several heated telephone conversations with
Rutherford lawyers, Sparks resigned his post. Sparks told Salon he stepped
down because he had completed his work and because, "there was a possibility
that I might be asked to testify" in the Paula Jones trial. Under the
circumstances, he said, "I felt the ethical thing to do was to withdraw."
He declined to say why he might be asked to testify.
The Rutherford Institute wrote more letters to Sparks' successor,
Dallas attorney Brent Perry, urging a review of the legal fund's
direct-mail solicitations. According to one knowledgeable source, the
letters essentially said, "Your fund-raising letters aren't true. You're
misleading and defrauding the public. Please stop it."
Perry tried to contact Rutherford's lawyers by telephone, but they
would not take his calls, preferring to communicate in writing, sources
said. Perry declined to write back, apparently concerned his letter might
be handed over to Clinton's lawyer, Robert Bennett, as part of the
discovery phase of Jones' trial. Under an order from Susan Webber Wright,
the U.S. District judge presiding over the sexual misconduct case, Jones'
attorneys already have turned over some of the Paula Jones Legal Fund
records to Bennett. In a further effort to show that Jones is suing the
president to enrich herself, Bennett also has filed a discovery motion in
federal court in Charlottesville to obtain other records from the
Unable to get Jones' fund-raisers to alter their pitch, the
Rutherford Institute sent one last letter to the legal fund. "Since it
appears we cannot achieve a resolution of these concerns with you, we are
obliged to turn the matter over to other appropriate organizations who
are charged with responsibility for such matters," the letter said. At that
point, the Rutherford Institute, concerned its reputation could be
tarnished by the legal fund's activities, handed over copies of its
letters to U.S. District Judge James Henry Michael in Charlottesville. If
Michael approves Bennett's discovery request, the letters will be handed
over to Clinton's lawyers.
Direct-mail fund-raiser Eberle did not return a telephone call, but Perry, the fund's
attorney, defended the group's fund-raising practices. "The Paula Jones Legal
Fund is raising funds for expenses that are relevant to the lawsuit," he
told Salon. "Frankly, a lawsuit of this magnitude puts a lot of strain on
the Joneses. There are expenses associated with that: high long-distance
bills, cell phone bills, investigative expenses, travel expenses. The fund
also has its own overhead expenses that have to be covered. This is not
going to enrich Paula Jones' lifestyle. There is no proof of it."
Asked how these expenses squared with the fund's appeal for
contributions to pay for Jones' legal expenses, Perry said: "The money
doesn't necessarily go to expenses incurred by lawyers, but it goes to
expenses that are related to the lawsuit."
Responding to the Rutherford Institute's charges that the fund was
misrepresenting how it spent its money, Perry declined to discuss the
matter further. "I would rather talk to the Rutherford Institute directly
about that rather than through you," he said, abruptly ending the
In a separate interview, Sparks, the fund's former attorney, also
insisted the group was not misrepresenting itself in its public
solicitations. He said Jones' legal expenses went far beyond the costs
being picked up by the Rutherford Institute. He said she faced additional
attorneys' fees in connection with an IRS audit and any possible appeals. He
also said some of the expenditures for which Jones has been criticized in the media -- for new clothes, a new hairdo and boarding her dog in a kennel -- were also "reasonable and legitimate" costs connected to her case.
Sparks also said Jones needs money to pay travel expenses and
the services of Susan Carpenter MacMillan, her spokeswoman -- a claim that
makes critics of Jones' fund-raising operation bristle.
"The answer to that is $300,000 for incidental travel is a lot
of money," one source said. "But more importantly, that's not what the
fund-raising letter says. The letters of the Paula Jones Legal Fund say
it's going to the lawyers. That's not true. This case can be fought without
Susan Carpenter MacMillan, and some would say, better."