Lindauer convicted, avoids jail

Past contender for governor's office pleads no contest on campaigns violations

Posted: Friday, January 07, 2000

ANCHORAGE - Former Republican gubernatorial candidate John Lindauer avoided a possible jail term Thursday by pleading no contest to charges that he violated Alaska's campaign laws.

As part of a plea agreement, Lindauer received a one-year suspended sentence and was placed on probation for two years. He agreed not to run for political office again in Alaska and will write a public apology to be published in the state's three largest newspapers. He also agreed to perform 100 hours of community service and pay a $15,000 fine.

To end his legal problems, Lindauer pleaded no contest to providing false or misleading tax information, violating campaign expenditure law and unsworn falsification, a felony perjury charge that was reduced to a misdemeanor.

The former University of Alaska chancellor and state lawmaker had said he was innocent of the charges against him - one count of felony perjury and 22 counts of violating state campaign laws.

Lindauer, who was present in District Court, showed no expression and responded to Judge Stephanie Rhoades with one-word answers.

Peter Gruenstein, Lindauer's lawyer, read his client's apology to the court. In it, Lindauer apologized for making misleading statements during the 1998 campaign.

Gruenstein said Lindauer made mistakes while pursuing a ``laudable goal'' of running a campaign that did not rely on special-interest money.

``He has paid a very dear political price in respect to those mistakes,'' Gruenstein said.

The judge strongly rejected Gruenstein's explanation. She said Lindauer engaged in a deceitful pattern of behavior.

``It was a grouping of lies, flat-out lies, and that is something that cannot be tolerated,'' the judge said. ``It is this type of behavior that is truly reprehensible.''

Prosecutor Helen Valkavich said the sentence and Lindauer's public apology would send a message to other politicians.

``I would expect most candidates would be anxious to avoid a similar experience,'' she said.

Gruenstein said Lindauer does not plan to return to Alaska, but will pursue business interests in Chicago.

Lindauer ran unsuccessfully for governor in 1998, winning the primary after running a lavish campaign. He at first said he financed the $1.7 million campaign with his own money. But his drive for the governor's office self-destructed and the Republican Party of Alaska eventually withdrew its support after hearing admissions that nearly all the money came from his wealthy second wife, Dorothy Oremus, heiress to her family's Chicago concrete business.

The perjury charge stemmed from Lindauer's claim that he received a 1997 Alaska Permanent Fund check. That claim came after he was accused of only moving back to the state from Chicago to run for governor. But Lindauer's statement came back to haunt him when it came out that his 1998 application for a dividend correctly stated he had not received a check the previous year.

After getting 23 percent of the vote in the primary, Lindauer finished third in the generally election with only 17 percent of the vote, behind Democrat Tony Knowles, who won, and write-in candidate Robin Taylor, a Republican state senator from Wrangell.

Lindauer, a former publisher of rural Alaska newspapers, left the state shortly after his first wife died. He reappeared on Alaska's political scene after marrying Oremus in 1995. Most of the campaign charges concerned money and loan guarantees from Oremus to her husband and money from Edward Heil, a wealthy businessman with ties to the Oremus family.

In 1997, before announcing his run for governor, Lindauer obtained a $700,000 loan from LaSalle Bank of Chicago. Lindauer's wife and her brother guaranteed the loan, according to a court affidavit. Oremus guaranteed another $300,000 loan for her husband in late December, about a month after he announced his candidacy. Prosecutors have said Lindauer had no relationship with the bank before receiving the loans and put up no collateral.

Under state campaign laws, contributions are limited to $500 per individual.

Prosecutors said Lindauer also received five direct payments from his wife during a three-week period in the fall of 1998 totaling $527,498.

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