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Schock's ties to donors raise questions about travel, condo, 'swaps'
Aaron Schock, left, with Rebecca Frye and Darren Frye at the Warriors in the Windy City event on Sept. 11, 2014.Aaron Schock, left, with Rebecca Frye and Darren Frye at the Warriors in the Windy City event on Sept. 11, 2014.During his six years in Congress, Rep. Aaron Schock could count on commodity trader Darren Frye and his wife, Becky, for campaign cash, transportation and use of an upscale condominium in Chicago, according to records and sources.But now that Schock has resigned from Congress and is under federal investigation, his dealings with donors such as the Fryes could prove far from beneficial to him.Schock's use of the Fryes' condo and travel services may run afoul of campaign laws and House ethics rules, according to legal experts.In addition, some of the Fryes' campaign contributions have raised questions about possible "donor swapping," a practice that falls into a gray area in the law and can allow political candidates to effectively collect more from a single donor than is legal.A federal grand jury in Springfield has been hearing testimony amid a state and federal probe of the former congressman's use of taxpayer and campaign money. The grand jury is expected to hear from more witnesses in early June.The Fryes have been important donors to Schock and other Republicans. The couple has given more than $383,000 to Republican political committees and candidates for federal office since 2008, including $121,500 to Schock's committees and an affiliated GOP party committee. Darren Frye was Schock's guest at President Barack Obama's 2012 State of the Union address.Records show Schock, 33, regularly traveled with help from a Frye company that operated a Cessna airplane. Sources said the former congressman frequently stayed at a condo off Chicago's Magnificent Mile owned by the couple.Neither Schock nor the Fryes responded to phone calls and emails seeking comment.Darren Frye is president and CEO of two Peoria firms. Water Street Advisory Inc. offers commodity brokerage services. Water Street Solutions gives financial advice to farmers and sells them crop insurance. Becky Frye co-founded Water Street Solutions with him and, according to the National Futures Association, is a principal at the brokerage.The Fryes, who live outside Peoria in Washington, Ill., were among four Illinois donors who accompanied Schock on a March 2011 trip to Saudi Arabia, sources said. The other donors on the trip were two Schock friends: Peoria car dealer Jeff Green and Galesburg beer distributor Adam Vitale.Schock never reported the trip, as required by the federal Ethics in Government Act. Vitale said he paid for his own ticket and declined to say more. Green has declined to comment on the trip. Schock's top aide and two other lawmakers on the trip said in travel disclosure reports the Saudi government paid their expenses.Condo and travelAccording to three sources, Schock regularly stayed at one or both of two high-end condominiums in downtown Chicago owned by the Fryes. The properties, one of which has since been sold, were held in the name of another Frye venture, D&B Developers LLC.House lawmakers are prohibited from accepting personal hospitality at a property owned by a corporation or firm. If the stays were a gift to Schock, he was required to put them on his annual financial disclosures. He did not.If Schock used a Frye condo for campaign business and did not reimburse the couple, that should have shown up in Federal Election Commission reports as an in-kind contribution. If he did pay them, it should have been reported to the FEC as an expenditure. Reports reflect neither.One source said Schock used a Frye condo at least five and as many as 15 times. One of the Frye condos "was Aaron Schock's condo, basically," he said. "They would allow him to have free rein."The transportation provided by the Fryes also could pose a problem for Schock.Using taxpayer funds in his office budget, Schock paid the Fryes' firm, D&B Jet Inc., nearly $26,000 for commercial transportation and travel expenses from 2011 to 2012. Records don't specify the mode of travel, but a Cessna 421C has been registered to D&B Jet since 2012. D&B Jet was incorporated in Illinois in 2008, but FAA spokesman Roland Herwig said he could find no other planes registered to the firm.Rules in effect when Schock used D&B Jet barred House lawmakers from taking flights on private or corporate aircraft. They could, however, fly on an airplane that was FAA-certified to conduct charter flights. The Cessna 421C was not certified for charters, the FAA said.Two other political funds tied to Schock paid D&B Jet more than $4,800 for airfare in 2012, records show.Campaign law is clear: Federal candidates are forbidden from using political contributions for noncommercial air travel, or those flights not conducted by a major airline or smaller charter service.Were donations swapped?Campaign finance reports show an unusual flurry of donations over three days in 2010 to Schock and Michael Grimm, a New York Republican who won a seat in Congress that year. The string of donations has led some to raise questions of donor swapping.Grimm, 45, a former FBI agent and Marine from Staten Island, pleaded guilty in 2014 to felony tax evasion and resigned from Congress this year. He awaits sentencing.The Fryes and seven other downstate Illinois donors to Schock gave Grimm a total of $15,600 between Oct. 28-30, 2010, public records show. In the same period, Schock's campaign collected a total of $16,300 from seven donors in New York and Texas who had previously given money to Grimm.According to one person who has been questioned by state and federal investigators probing Schock, donor swapping is one of the areas the investigators explored. The person, who spoke to the Tribune on condition of anonymity, said he was subpoenaed in the case but is cooperating with the government and has not been called to testify.There has been no definitive court ruling on whether donor swaps are legal, according to Brett Kappel, a Washington lawyer who has practiced political law for 25 years. Donors are rarely if ever prosecuted in such cases because the government would have to prove they had criminal intent, according to Kappel.Kappel said that if candidates or their campaign staffers agreed to a donor swap, prosecutors could argue it was a criminal conspiracy to avoid campaign contribution limits. But courts could also find donor swapping to be legal if the contributions were fully disclosed and none of the donors was secretly reimbursed, he said.Before their two $2,400 donations to Grimm in 2010, Darren and Becky Frye had "maxed out" on their general-election donations to Schock by giving him the same amount of money.On March 17, the day Schock announced he was leaving Congress at the end of the month, an Illinois native was sentenced in New York to three months in federal prison for recruiting "straw donors" who made campaign contributions to two House candidates. One of the candidates was Grimm, and the other has been reported to be Schock.The defendant was a friend of Grimm: Diana Durand, 49, a native of Monmouth, Ill., who lives in Houston. She was one of the seven Grimm donors who also gave to Schock during the three-day period.While donor swapping falls into a gray area, straw donations do not. It is illegal for a person to make a campaign contribution using another person's name.In the Durand case, two unidentified straw donors — they were a married couple, and the wife worked with Durand then — gave a total of $4,800 to "Candidate B" in late October 2010 after Durand cut them a check for that sum, according to the criminal complaint. The New York Times on March 18 identified Schock as Candidate B.The $4,800 in straw donations to Candidate B were made in the narrow time period that saw the Fryes give $4,800 to Grimm, records show.In 2010, federal election law limited primary and general election campaign contributions to $2,400 each, resulting in an overall limit of $4,800 in contributions that a person could contribute to any one candidate during the election cycle. But if a candidate emerged the winner of a primary election with no outstanding debt — as Schock and Grimm did that year — the maximum donation leading up to the general election was $2,400 per person.Six of the seven Grimm donors who later gave to Schock in the three-day period already had hit the contribution limit with the New York Republican.The Fryes, like all nine Schock donors who later gave to Grimm, likewise had hit the ceiling for giving to the Illinois Republican for the general election.After the complaint against Durand was unsealed in 2014, Schock said he didn't know her and denied wrongdoing.The Fryes have not been accused of any wrongdoing.kskiba@tribpub.comacaputo@tribpub.comTwitter @KatherineSkiba

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