Today’s Must Read

June 5, 2008 9:35 a.m.

As the Bush years wind to a close, and administration officials slink back to jobs in the private sector, the road ahead of Daniel Gonzalez, the chief of staff for Kevin J. Martin, chairman of the Federal Communications Commission, seems bleak.

From the New York Times:

Hoping to pursue a career in an entirely different field from telecommunications, Mr. Gonzalez invested in a small energy company three years ago and then joined the company’s board in 2006. The company, law enforcement officials say, turns out to have been a fraudulent venture that took more than $54 million from investors.

In what looks to be a Ponzi scheme, Gonzalez personally guaranteed bank loans to the company of over $10 million, even though his personal worth was only in the hundreds of thousands, the banks allege. Gonzales disputes that allegation.

The energy company, MCube Petroleum, was founded by Robert Miracle, who appears to have a more checkered past than he presented to investors. Gonzalez’s involvement with the company, began when he was introduced to Miracle by a childhood friend.

Mr. Miracle, who was born in 1960, represented himself as a seasoned businessman. In a company overview, he said he had more than 20 years of experience at Toyota and NASA and served as an adviser to Frank G. Wells, the former president of Disney.

But an affidavit by a criminal investigator for the Internal Revenue Service said that Mr. Miracle had never worked for Mr. Wells, and that in 1994, Mr. Miracle had been convicted of felony theft in Oregon for stealing textbooks from a community college. The affidavit said that, rather than working at Disney, Mr. Miracle might have been involved in reselling textbooks from universities.

Through his lawyer, Miracle denies any wrongdoing:

Mr. Miracle’s lawyer, Greg Hollon, denied that his client had committed fraud. “We are confident that when the whole story is heard, and all of the facts of this matter properly understood, he will be vindicated,” Mr. Hollon said. He added he could not discuss the details of the case because of the pending criminal investigation.

While it seems possible that Gonzalez was the victim of a con by Miracle, the question of why he would ever personally guarantee $10 million in company loans remains unknown.

Friends and colleagues are puzzled about why he took such a large risk. Asked why his client would guarantee a promissory note of $10 million when his net worth was so much smaller, Mr. Willey said, “I cannot give an answer.”

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