A major Democratic donor pleaded guilty to funneling hundreds of thousands of dollars in illegal campaign donations to local and federal politicians.

One of those campaigns was for an “unnamed” 2008 presidential candidate believed to be Hillary Clinton.

Jeffrey E. Thompson, a D.C. businessman, created an illegal shadow campaign to help the city’s mayor, Vincent Gray, get re-elected in 2010.

Yesterday Thompson pleaded guilty to conspiracy to violate campaign finance laws.

The Washington Times explained how the scam worked:

The scheme included diverting more than $608,000 in illicit funds to a New York marketing executive, Troy White, who organized “street teams” to raise Mrs. Clinton’s visibility in urban areas during her Democratic primary battle against Barack Obama. Mr. White pleaded guilty to a misdemeanor in the case.

Prosecutors said that from February to May 2008, Thompson used two firms to disburse $608,750 in “excessive and unreported contributions to pay for campaign services in coordination with and in support of a federal political candidate for president of the United States and the federal and the candidate’s authorized committee.” That candidate was Mrs. Clinton.

The Center for Public Integrity reported last year that Thompson and other donors who listed his firm as their employer gave at least $514,350 to federal candidates and political action committees since the 2002 campaign cycle. The biggest beneficiary of those funds was Mrs. Clinton, whose campaigns took in $50,400. Her presidential campaign committee received $40,300 from employees at Thompson’s firm in November 2007, when she attended a fundraiser at the company’s headquarters in the District.

There isn’t any evidence that Clinton knew about the source of the funding, according to U.S. Attorney Ron Machen.

Machen said that more charges may be coming as Thompson continues to cooperate with investigators. According to NBC News, “many other candidates were implicated in Thompson’s plea agreement, including a candidate for mayor in 2006, a candidate for D.C. Council At Large in 2008 and a candidate for Ward 4 council in 2007.”

Machen delivered the following statement about the scandal:

“Election after election, Jeff Thompson huddled behind closed doors with corrupt candidates, political operatives, and businessmen, devising schemes to funnel millions of dollars of corporate money into local and federal elections. Today’s guilty plea pulls back the curtain on years of widespread corruption. With Mr. Thompson’s cooperation, we have the opportunity to hold many wrongdoers accountable and to usher in a new era of honesty, integrity, and transparency in D.C. politics.”

Thompson was charged with two felony counts of conspiracy and faces up to two years in prison under his plea deal. If he fully complies with terms of his deal, he may only serve time for one count – which means his time will be reduced to six months.

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