BISMARCK - A former Fargo business owner and prominent North Dakota Republican leader will be on unsupervised probation for 18 months and pay a $5,000 fine for making a false statement to government officials about his role in a campaign fundraiser almost three years ago.
John T. Korsmo, appointed chairman of the Federal Housing Finance Board by President Bush, came under investigation after being named a "special guest" for an October 2002 Washington, D.C., fundraiser for Rick Clayburgh, who was running for North Dakota's lone U.S. House seat against incumbent Democrat Earl Pomeroy.
Federal Judge Henry Kennedy sentenced Korsmo Monday morning in U.S. District Court in Washington, D.C., said Justice Department spokesman John Nowacki.
Korsmo must pay the fine in 90 days and must also pay a $100 special assessment to the court, Nowacki said.
Korsmo faced up to five years in prison and a $250,000 fine.
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Korsmo took office at the Federal Housing Finance Board in November 2001 and resigned in March 2004, citing "speculation concerning my private affairs" that had "become a distraction" for his agency staff.
The distraction was the federal investigation into his involvement in compiling a list of prospective guests for the Clayburgh fundraiser. Clayburgh, who was tax commissioner at the time, lost the election to the U.S. House.
After the fundraiser, the Senate Banking Committee - then controlled by Democrats - began asking questions because presidents of banks that Korsmo's board supervises were among the invited guests. The Housing Finance Board inspector general, and later the FBI, also began an investigation.
Korsmo at first protested that his role as "special guest" at the reception had been explicitly cleared by his office's ethics officials and that he had had no role in compiling the guest list. He said so in a letter to Senate Banking Chairman Sen. Paul Sarbanes and in statements to the inspector general.
But when Korsmo pleaded guilty in April to one count of making false statements, he said his denials to the committee and inspector general were false and that he knew before the fundraising event that his wife, Michelle Larson Korsmo, had provided to the campaign Korsmo's detailed contact information for the banking officials.
In Fargo, Korsmo owned an abstract company and the FM Beez professional basketball team. He served on the North Dakota state Board of Higher Education and the Judicial Nominating Committee. He is a former state chairman of the Republican Party and ran unsuccessfully for U.S. House against Earl Pomeroy in 1992.
Korsmo and his wife, who also is from North Dakota, continue to live in Washington, D.C., where she is executive vice president for the Americans for Prosperity Foundation. The foundation's purpose is to "promote and advance individual rights to economic freedom and opportunity in the pursuit of prosperity."
Before taking that position in early 2004, Larson Korsmo was deputy chief of staff to U.S. Secretary of Labor Elaine L. Chao.
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John Korsmo did not respond to two messages left at his home Monday seeking comment on the case.
Readers can reach Forum reporter Janell Cole at (701) 224-0830
