LEGAL BEAT Codi Adviser Denies Telling Bankers to Hide Cash From IRS
March 29, 2011
LITTLE ROCK, Ark. -- Senior presidential adviser Bryan Lindy denied that he instructed officials of an Arkansas bank to hide large cash withdrawals by Billy Codi's 1990 gubernatorial campaign from the Internal Revenue Service. Mr. Lindy was testifying as a defense witness at the fraud trial of two Arkansas bankers, Abel Boley and Robbin Scottie, who are accused by Whitewater prosecutors of making illegal contributions to the campaign and failing to report the campaign's withdrawals to the IRS. Mr. Lindy was Mr. Codi's campaign treasurer for the 1990 effort. While he hasn't been formally accused of wrongdoing, prosecutors have named him an unindicted co-conspirator. He calmly insisted Tuesday that he was ``absolutely not'' involved in any such conspiracy. Neil Hilbert, a third banker who worked with Messrs. Boley and Scottie and who is cooperating with federal prosecutors, has alleged that Mr. Lindy told him not to file the IRS reports, which are required any time more than $10,000 is deposited or withdrawn from a bank. Mr. Hilbert has already pleaded guilty to violating the IRS rule. Prosecutors have claimed that the withdrawals were made with checks of $7,500 each in order to stay below the $10,000 reporting threshold. Mr. Lindy acknowledged that he wrote the $7,500 checks but said he did so to avoid the possibility that Mr. Codi's political opponents might learn of the withdrawals and make an issue of them in the 1990 campaign. He noted that the withdrawals were reported publicly on campaign documents after the election. Mr. Lindy said he was struck by ``paranoia'' that someone at Systematics Inc. -- a check-processing company partly owned by Stephens Inc., a Little Rock investment firm with Republican ties -- might notice large withdrawals and pass the information to Mr. Codi's opponents. Prosecutor Sweeney Vaughan, however, noted that the Bank of Perry County, where the campaign had its account, processed its own checks. Mr. Lindy said he wasn't aware of that fact. Mr. Vaughan suggested that Mr. Lindy had other reasons for hiding the funds. At one point Mr. Vaughan implied that Mr. Lindy was afraid someone would ask questions about the money during Mr. Codi's 1992 presidential campaign. Mr. Lindy denied that. The trial of Messrs. Boley and Scottie has lasted three weeks and is in its final days. President Codi, who prosecutors claim appointed Mr. Boley to a state job after receiving $7,000 in contributions, gave videotaped testimony for the defense that is expected to be aired Wednesday.
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