After inquiry, Frank gives up campaign money from gamblers accused of fraud

By Donovan Slack, Globe Staff

WASHINGTON – Massachusetts Representative Barney Frank pledged yesterday to give up tens of thousands of dollars in campaign contributions he received from board members of an online poker company accused by federal prosecutors this week of running an international Ponzi scheme.

Frank had taken in $18,600 from the board members of Full Tilt Poker since 2007 and another $14,000 from the Poker Players Alliance, a group largely funded by the board members.

Federal prosecutors in New York on Tuesday filed a civil complaint alleging that Full Tilt Poker and board members Howard Lederer, Christopher Ferguson, and Rafael Furst, among others, defrauded players and lined their pockets with $444 million of players’ money.

After the Globe inquired about their campaign contributions, Frank said he wants to find a way to give the money to those who were defrauded.

“If not, I’ll just give it to charity,” he said.

“I’m really very unpleasantly surprised that these guys were defrauding people,” Frank said.

Lederer, Ferguson and Furst -- all noted poker players themselves -- could not immediately be located for comment. The Associated Press also reported they could not be located.

Frank could be called the pit boss of poker politics for his advocacy of gambling interests. The industry has been trying for years to legalize online gambling, and Frank has been at the forefront of that push, repeatedly filing legislation that would allow Internet gaming companies to operate in the United States.

The representative said he has long backed allowing such an operation and the donations came after he proposed legislation allowing it. “Subsequent to my filing it, I found myself with a whole lot of new friends in the poker industry,” Frank said.

He said the allegations against Full Tilt have not caused him to reverse his stance, but he said he now plans to amend the latest bill with a requirement that players’ money be kept in a trust.

A Globe review of campaign finance records found that Lederer, Ferguson, and Furst have been generous congressional campaign contributors, doling out nearly $200,000 since 2007.

Frank tied Nevada Representative Shelley Berkley, a Democrat, for the highest amount received.

The three board members gave political contributions mainly to Democratic lawmakers, who received $131,000. Republicans received $42,000. In addition to lawmakers, Democratic Party committees and causes received $110,000 from the group.

The Poker Players Alliance received $90,000, accounting for a third of its funding. The alliance, formed to help lobby lawmakers to legalize online gaming, then doled out most of that money to lawmakers.

Frank, of Newton, received more than anyone else from the group.

In April, the US Attorney’s office in the Southern District of New York filed a civil complaint and unsealed a criminal indictment against 11 defendants, including at least one board member of Full Tilt, alleging they engaged in money laundering and other offenses.

The civil complaint filed this week names Lederer, Ferguson and Furst and alleges that they and Full Tilt “cheated and abused its own players.”

“Full Tilt insiders lined their own pockets with funds picked from the pockets of their most loyal customers while blithely lying to both players and the public alike about the safety and security of the money deposited with the company,” Manhattan US Attorney Preet Bharara said in a statement.

The company is based outside of Dublin, Ireland.