US Representative Hunter pleads not guilty to campaign finance charges

SAN DIEGO/SACRAMENTO, Calif., Aug 23 (Reuters) - U.S. Representative Duncan Hunter and his wife Margaret pleaded not guilty on Thursday to federal charges alleging misuse of $250,000 in campaign funds, in a case that could hand the Trump supporter's otherwise safe seat to a Democrat.

Bail for Hunter was set at $15,000, and for Margaret Hunter at $10,000.

Hunter is the second Republican member of the U.S. House of Representatives to face criminal charges this month. On Aug. 8, Republican U.S. Representative Christopher Collins of New York was charged with taking part in an insider trading scheme.

"There are serious allegations in the indictment with a large amount of money stolen from the campaign by both defendants," Assistant U.S. Attorney Phillip Halpern said on Thursday, as protesters shouted "Shame! Shame!" outside.

Hunter has called the prosecution politically motivated and asserted that prosecutors on the case were supporters of failed Democratic presidential candidate Hillary Clinton.

"This is evidenced by the fact that after two years of investigating, the Department of Justice decided to take this action right before my election," he said on Wednesday.

The indictment against Hunter and his wife on Tuesday also came the same day that U.S. President Donald Trump's former campaign chairman, Paul Manafort, was found guilty of tax and bank fraud, and former Trump lawyer Michael Cohen pleaded guilty to crimes including tax evasion, bank fraud and campaign finance violations.

The highly detailed indictment by a grand jury in San Diego alleged that the Hunters used campaign accounts to pay for their children's private school tuition, lavish travel including a trip to Italy and restaurant meals that frequently cost hundreds of dollars.

It also alleges that the Hunters lied about what they spent the money on, saying that purchases of groceries, restaurant meals and clothing were for charity or for campaign events.

"The Hunters’ improper use of campaign funds for personal expenses occurred despite numerous warnings about the prohibition against using campaign funds for personal expenses and repeated inquiries from Duncan Hunter’s campaign treasurer about questionable purchases," U.S. attorney Adam Braverman, an interim Trump administration appointee, said in a news release.

(Reporting by Marty Graham in San Diego, California, and Sharon Bernstein in Sacramento, California Writing by Sharon Bernstein Editing by Robert Birsel and Matthew Lewis)