Federal authorities have been investigating 30 lawyers who worked in the now-defunct firm of Scott Rothstein, who yesterday was sentenced to 50 years in prison for running an elaborate Ponzi scheme.

According to his lawyer and media reports, the convicted felon is giving up the names of people involved and has even gone “undercover” which will likely lead to the arrest of lawyers, business associates and perhaps even politicians.

Tomorrow, Rothstein’s chief operating officer, who personally gave McCain’s political committees at least $30,000, is scheduled to plead guilty to assorted criminal activity.

The lawyers, along with 15 other Rothstein employees, made about $2.2 million in state and federal campaign contributions while he was running the Ponzi scheme from 2005 to 2009.

“McCain is knee-deep in this scandal and he needs to come clean,” said Mark Sanders, spokesman for U.S. Senate Candidate J.D. Hayworth (R-AZ). “He first lied to the media when his campaign said the entire $1.1 million Rothstein collected was given to charity and it was old news. Then he tried to cover it up by saying he gave back the few thousand dollars Rothstein and his wife gave directly.”

Federal officials are examining Rothstein’s use of money from his $1.2 billion Ponzi scheme to pay salaries and give huge bonuses to senior attorneys on the condition that they donate generously to his favorite politicians, including McCain.

“Rothstein and his wife Kimberly held fundraisers for McCain,” Sanders said. “His partner Stuart Rosenfeldt and his wife Susanne gave to McCain and to others, including Florida Gov. Charlie Crist.

“McCain likes to say character matters, but he is displaying his lack of it by keeping the $1.1 million and returning to Rothstein two small individual contributions,” Sanders said.

One employee close to Rothstein, chief operating officer Debra Villegas, donated about $46,000 to McCain, other politicians and political committees in Florida. They gave the dirty money back, while McCain kept his million.

“Everybody seems to get it but McCain,” Sanders said. “He needs to fully account for the distribution of the money he collected from everyone at this corrupt firm and explain to Arizona voters why accepting and keeping money gained from a criminal activity makes him worthy to serve in any public office.”

The racketeering charges against Rothstein allege that the firm’s donations to politicians and campaign committees were largely illegal because they were funded with money from the now-disbarred lawyer’s illegal Ponzi scheme.

“According to media reports, agents for the FBI and the IRS are investigating campaign records to determine how Rothstein used his investment scam to fund the political donations,” Sanders said. “Their next stop needs to be in Phoenix to interview McCain. If he didn’t know how his top contributor was making money he should have. Ignorance is not a defense when this contributor is the number one donor to the ‘McCain Victory 2008′ fund and the ‘McCain-Palin Victory 2008′ fund.”

Sanders said McCain should not try to hide behind his spokesman when it comes to answering these questions.

“McCain’s mouthpiece is the same guy who lied to the media in the first place and prior to joining the Senator’s campaign  was the research director for Al Gore while Gore was trying to convince everyone that planet Earth was about to turn into a fireball because of global warming,” Sanders said. “It’s time for Mr. McCain to step up and personally disavow his acceptance of more than a million dollars he took from a convicted felon.”

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