by Steve Timmer

Oct 27, 2012, 10:00 PM

Kurt Bills approves this message

On Friday evening, Kurt Bills was on Almanac to discuss — and defend — the one and only television ad that his campaign has run. That is, of course, his odious smear of Amy Klobuchar, based on a couple of stories by Tucker Carlson’s baby, the Daily Caller.

The ad ran during the Vikings game against Tampa Bay on Thursday evening; the Vikings lost, too.

Sidekick Aaron has already written about the Daily Caller stories, and about “reporter” Matthew Boyle’s claim that Richard Hettler provided only “color commentary” to his stories. It’s all about the documents, according to Boyle, but Hettler was obviously Boyle’s only source.

In the briefest of recap of the Daily Caller and Kurt Bills’ claims: Tom Petters came to Amy Klobuchar’s attention in 1999 shortly after she first took office, while the Hennepin County Attorney’s office was prosecuting Richard Hettler for theft by swindle and failure to pay child support. The Daily Caller and Bills say that Klobuchar should have prosecuted Petters for fraud at the time; it was so apparent that he was a Ponzi schemer back in 1999.

By the beginning of 1999, there were at least a couple of promissory notes, made by Petters’ company, and guaranteed by Petters that were issued to Hettler, or to Capital Asset Management Group, a company that Hettler owned. Two promissory notes to Hettler and Capital Asset Management are in the Daily Caller’s documents on the web.

The notes represented a loan by Hettler to Petters. However, Hettler got the money to loan to Petters by taking it from his (Hettler’s) dead brother’s estate, for which Hettler was a trustee. But the notes were payable not to the trust for which Hettler was the trustee, but rather to Hettler personally, or to Capital Asset Management Group.

It is said that blood is thicker than water, but money is thicker than blood.

In January of 1999, Hettler and his company assigned the notes to Ruth Kahn, with whom he was sharing a residence at the time. According to the assignment — also one of the documents in the Daily Caller’s documents, linked above — Hettler and Co. received in exchange Kahn’s assets that, according to the agreement that “consistent predominantly of real estate equity and other assets.” That is as specific as Hettler and Kahn ever got. Swell.

A cynical person would say this was an effort to put the money outside of the reach of Hettler’s creditors and family.  As we will see in a moment, and to Richard Hettler’s surprise, it worked!

A little later in 1999, Richard Hettler pleaded guilty to the charges against him, and he spent some time at an exclusive resort in Moose Lake, Minnesota. He used to receive correspondence about various legal matters of pressing concern while sunning himself at 1000 Lake Shore Drive, Moose Lake and which you can also find in the Daily Caller documents.

Among the matters of pressing legal concern was Ruth Kahn’s bankruptcy. In Kahn’s bankruptcy estate, the trustee in bankruptcy found the assigned notes. Tom Petters and his company paid them, or at least enough of them to make the trustee go away, to the trustee, who distributed them according to law and final judgment of the bankruptcy court.

In May of 1999, the Hennepin County Attorney’s office commenced a civil suit to recover the promissory notes — and whatever underlying value was in them. This is the suit “against the promissory notes” described by Boyle. It was not a criminal action as Boyle intimates says; it was civil suit. It is common in suits to recover property, or enforce forfeitures, for suit to be commenced by the government naming the property as a defendant, e.g., the United States v. 283 Cases of Corn Whiskey, or the State of Minnesota v. One 2006 Mazda 626. These are called in rem actions. This suit was the Hennepin County Attorney’s office attempt to recover money for the victims of Hettler’s theft by swindle and his failure to pay child support that the county provided to Hettler’s former wife and child.

[Update: The “promissory notes were charged with a crime” stupidity is repeated by Bills on his campaign website. Again, just by looking at the summons prepared in the case — and in the same set of documents published by the Daily Caller — it is clearly marked as a forfeiture case. These actions are common in cases where law enforcement authorities attempt to recover property to provide restitution to crime victims. The failure to understand this, or even have the curiosity to investigate it, is a blot on the escutcheons of both Boyle and Bills.]

Of course, the notes didn’t belong to Hettler anymore; he’d sold them for a bag of beans.

These are also the promissory notes that Richard Hettler has howled for a decade belong to him, and for which Matthew Boyle has provided a sympathetic ear. But Richard Hettler was too clever by half, wasn’t he?

According to Hettler, in 1999 and when he was being prosecuted for fraud, Amy Klobuchar should have recognized Petters for the schemer that he was. Perhaps one fraudster is better at spotting another, but it is impossible to charge Amy Klouchar with the knowledge that Tom Petters was a Ponzi schemer in 1999.

No law enforcement authority recognized Tom Petters for what he was until an insider, Deanna Coleman, came forward in late summer of 2008 — nearly ten years after the events over which Boyle and Bills smear Klobuchar — and told her story to federal authorities, agreed to wear a wire, and smuggled documents out of the company — that the Petters ponzi scheme was discovered.

The obloquy of this episode is going to take a long time for Kurt Bills, Mike Osskopp, and everybody associated with the Bills campaign to live down. Bills said on Almanac he didn’t know if the charges contained in his own campaign commercial were true, an astonishing admission of his own recklessness.

N.B. The subject of Kurt Bills, Mike Osskopp, Matthew Boyle, Richard Hettler, and oh so tangentially, Amy Klobuchar that is discussed here and in two earlier stories on LeftMN, was also the subject of a segment on the LeftMN Radio Hour that aired on Sunday, October 28th at 2PM on AM950. Here’s the podcast.