AP Retracts Story Accusing Va. Gov. Candidate McAuliffe of Lying

Image: AP Retracts Story Accusing Va. Gov. Candidate McAuliffe of Lying

Thursday, 10 Oct 2013 11:21 AM

By Sandy Fitzgerald

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The Associated Press Wednesday quickly retracted a story alleging that Virginia Democratic gubernatorial candidate Terry McAuliffe had lied to a federal investigator probing a death benefits scam after the campaign flatly denied the accusation.

According to Politico, the story cited court documents allegedly identifying McAuliffe as "T.M." in a case against Rhode Island attorney Joseph Caramadre, who pleaded guilty last year to identity theft and wire fraud charges.

Caramadre was accused of running an annuities scheme in which he essentially paid the terminally ill to sign up for expensive annuities they would never collect. He then used their identities after their deaths to collect benefits and return a profit not only to himself, but to his investors, ProPublica reported nearly a year ago.

The "T.M." in the court files was listed as a Caramadre investor who "intentionally lied to the Postal Inspector" about a $2,000 check from the attorney. According to a report in the Providence Journal on Wednesday, prosecutors identified McAuliffe in new court filings as one of many of Caramadre's passive investors but did not accuse him of any wrongdoing.

At 9:45 p.m. Wednesday, the AP sent out a news alert and then a story that reported McAuliffe had lied to a postal inspector in the case, Politico reported. But by 11:25 p.m., the wire service issued a rare withdrawal of the story, after McAuliffe's campaign denied it to NBC 12 in Richmond.

A McAuliffe spokesman acknowledged that the candidate had invested at one point with Caramadre, but said the AP allegation that he was the "T.M." who lied to the postal inspector was completely false. He noted that McAuliffe was in Richmond in meetings when the interview with the inspector took place, reportedly on April 20, 2010.

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"Terry was one of hundreds of passive investors several years ago and had no idea about the allegations against the defendant —  who, at the time, was widely respected by business leaders and elected officials," spokesman Josh Schwerin said in an email to Politico. "The allegations are horrible and he never would have invested if he knew he was being deceived."

In withdrawing its story, the AP acknowledged the indictment against Caramadre and court documents in the case never specifically identified McAuliffe as the "T.M" who allegedly lied to an investigator.

"The initial alert moved on AP's Virginia state wire at 9:45 p.m.," AP spokesman Paul Colford said in a statement. "The story was withdrawn one hour and 38 minutes later. That was an hour and 38 minutes too long.”

Despite the retraction, Virginia Attorney General Ken Cuccinelli, the Republican nominee for governor, seized on the fact that McAuliffe had been an investor with Caramadre.

“There is no question that this is a deeply troubling story, and what it reveals most of all is yet another glaring example of Terry McAuliffe doing business with highly dubious individuals,” said Cuccinelli campaign strategist Chris LaCivita.

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