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Great News! Bad news for repugs grows as Tom Delay indicted
The exterminator just might get exterminated.
Corrupt thug Texas repug will have to step down as leader, at least temporarily, hopefully forever. Investigations will include examining emails and all sorts of things. Odds are other things will come to light. Only downside is with repugs in control of Congress, they will try their best to undue this. Fortunately, this is in Texas court and largely out of their control.
Stay tuned for more as the story evolves and more info becomes available.
Stay tuned for more as the story evolves and more info becomes available.
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DeLay Indicted in Campaign Finance Probe
- By LARRY MARGASAK, Associated Press Writer
Wednesday, September 28, 2005
(09-28) 09:44 PDT WASHINGTON (AP) --
A Texas grand jury on Wednesday charged Rep. Tom DeLay and two political associates with conspiracy in a campaign finance scheme, an indictment that could force him to step down as House majority leader.
DeLay attorney Steve Brittain said DeLay was accused of a criminal conspiracy along with two associates, John Colyandro, former executive director of a Texas political action committee formed by DeLay, and Jim Ellis, who heads DeLay's national political committee.
The indictment against the second-ranking, and most assertive Republican leader came on the final day of the grand jury's term. It followed earlier indictments of a state political action committee founded by DeLay and three of his political associates.
The grand jury action is expected to have immediate consequences in the House, where DeLay is largely responsible for winning passage of the Republican legislative program. House Republican Party rules require leaders who are indicted to temporarily step aside from their leadership posts.
However, DeLay retains his seat representing Texas' 22nd congressional district, suburbs southwest of Houston.
DeLay has denied committing any crime and accused the Democratic district attorney leading the investigation, Ronnie Earle, of pursuing the case for political motives.
Democrats have kept up a crescendo of criticism of DeLay's ethics, citing three times last year that the House ethics committee admonished DeLay for his conduct.
Earlier, DeLay attorney Bill White told reporters, "It's a skunky indictment if they have one."
As a sign of loyalty to DeLay after the grand jury returned indictments against three of his associates, House Republicans last November repealed a rule requiring any of their leaders to step aside if indicted. The rule was reinstituted in January after lawmakers returned to Washington from the holidays fearing the repeal might create a backlash from voters.
DeLay, 58, also is the center of an ethics swirl in Washington. The 11-term congressman was admonished last year by the House ethics committee on three separate issues and is the center of a political storm this year over lobbyists paying his and other lawmakers' tabs for expensive travel abroad.
- By LARRY MARGASAK, Associated Press Writer
Wednesday, September 28, 2005
(09-28) 09:44 PDT WASHINGTON (AP) --
A Texas grand jury on Wednesday charged Rep. Tom DeLay and two political associates with conspiracy in a campaign finance scheme, an indictment that could force him to step down as House majority leader.
DeLay attorney Steve Brittain said DeLay was accused of a criminal conspiracy along with two associates, John Colyandro, former executive director of a Texas political action committee formed by DeLay, and Jim Ellis, who heads DeLay's national political committee.
The indictment against the second-ranking, and most assertive Republican leader came on the final day of the grand jury's term. It followed earlier indictments of a state political action committee founded by DeLay and three of his political associates.
The grand jury action is expected to have immediate consequences in the House, where DeLay is largely responsible for winning passage of the Republican legislative program. House Republican Party rules require leaders who are indicted to temporarily step aside from their leadership posts.
However, DeLay retains his seat representing Texas' 22nd congressional district, suburbs southwest of Houston.
DeLay has denied committing any crime and accused the Democratic district attorney leading the investigation, Ronnie Earle, of pursuing the case for political motives.
Democrats have kept up a crescendo of criticism of DeLay's ethics, citing three times last year that the House ethics committee admonished DeLay for his conduct.
Earlier, DeLay attorney Bill White told reporters, "It's a skunky indictment if they have one."
As a sign of loyalty to DeLay after the grand jury returned indictments against three of his associates, House Republicans last November repealed a rule requiring any of their leaders to step aside if indicted. The rule was reinstituted in January after lawmakers returned to Washington from the holidays fearing the repeal might create a backlash from voters.
DeLay, 58, also is the center of an ethics swirl in Washington. The 11-term congressman was admonished last year by the House ethics committee on three separate issues and is the center of a political storm this year over lobbyists paying his and other lawmakers' tabs for expensive travel abroad.
Tom DeLay’s Transgressions: A Pattern of Misbehavior
Unprecedented four admonishments by unanimous votes of the bipartisan House Ethics Committee
* K Street Project (1999) – Admonished for threatening Electronic Industries Alliance for not hiring a Republican as its president. The Ethics Committee itself initiated this investigation.
Source: “Ethics Panel Chastises DeLay For Threatening Trade Group,” The Washington Post, May 14, 1999
* Westar Energy (2004) – Admonished for creating at least the “appearance” that Westar Energy executives were provided special access at a West Virginia golf retreat as result of $25,000 in corporate contributions to Texans for a Republican Majority, a political group affiliated with DeLay. At the time of the retreat, the House was about to consider an energy bill that Westar hoped to influence. A complaint filed by former Rep. Chris Bell (D-TX) initiated this investigation. Link
Source: Memorandum to Members of the House Ethics Committee
* Texas Redistricting (2004) – Admonished for using government resources for a political undertaking. Delay’s staff contacted the Federal Aviation Administration (FAA) during the 2003 Texas redistricting battle to obtain information from FAA databases on the whereabouts of Democratic Members of the Texas House who had fled Austin in a plane for the purpose of denying the House a quorum. A complaint filed by Bell initiated this investigation. Link
Source: Memorandum to Members of the House Ethics Committee
* Medicare Bill (2004) – Admonished for offering to endorse Rep. Nick Smith’s (R-MI) son, who would be running for Congress, on the House floor in exchange for Rep. Smith’s vote in favor of the Medicare/prescription drug bill. The Ethics Committee itself initiated this investigation. Link
Source: Investigation of Certain Allegations Related to Voting on the Medicare Prescription Drug, Improvement, and Modernization Act of 2003
Pending case
* Illegal Campaign Contributions (2005) – The House Ethics Committee last year was asked to investigate Rep. DeLay for allegedly using his political action committee, Texans for a Republican Majority (TRMPAC), to launder corporate money to Texas state campaigns in 2002, a violation of state law. The committee decided not to take action on the complaint until after Travis County (Austin), Texas District Attorney Ronnie Earle completes his investigation of TRMPAC activities and until indictments against DeLay associates in Texas are disposed of. Link
Source: Memorandum to Members of the House Ethics Committee
Questionable Conduct (not considered by House Ethics Committee)
* Celebrations for Children (CFC) – This charity, which counted DeLay political operatives among its officers, planned to sell tee times to Long Island golf courses, as well as VIP tickets to Broadway plays, yacht cruises and other events that offered access to DeLay during the 2004 Republican convention in New York. The plan was an attempt to misuse the charity’s IRS tax-exempt status to circumvent the ban on raising soft money. After the charity’s plan drew unfavorable attention from the House Ethics Committee, the charity backed away from its convention plans. Link
Source: “Charity Tied to DeLay Is Questioned; Group Asks Lawmakers To Demand Ethics Probe,” Washington Post, March 24, 2004
* Cruise Ship in N.Y.C. – DeLay proposed anchoring the 2,224-passenger Norwegian Dawn cruise ship in the Hudson to accommodate Republicans during the Republican National Convention as an exclusive hotel for lawmakers, lobbyists and special guests. This plan was criticized for providing an environment of special access for large contributors to elected officials. The idea was scrapped after unfavorable publicity.
Source: “They’ll Take Manhattan: Republicans Drop Ship Idea,” The New York Times, December 3, 2003
* Legal Defense Fund Contributions – After Public Citizen complained about possible ethics violations, DeLay was forced to return contributions to his legal defense fund from registered lobbyists because House ethics rules explicitly prohibit such contributions. Link
Source: “Gifts Broke Rules, DeLay Trustee Says,” The New York Times, December 8, 2004
The Latest Ethics Allegations Against Tom DeLay
* A trip DeLay took in 1997 to Moscow may have been underwritten by business interests lobbying on behalf of the Russian government. The $57,238 cost of the trip was reportedly transferred from a mysterious company registered in the Bahamas, Chelsea Commercial Enterprises Ltd., to the nonprofit group, the National Center for Public Policy Research, which officially paid for the trip. On the trip, DeLay met with two registered lobbyists for Chelsea, including Jack Abramoff.
Source: “A 3rd DeLay Trip Under Scrutiny; 1997 Russia Visit Reportedly Backed by Business Interests,” Washington Post, April 6, 2005.
* DeLay's political action and campaign committees have paid his wife and daughter more than $500,000 since 2001. According to disclosure forms, the payments were for “fund-raising fees,” “campaign management” or “payroll.”
Source: “Political Groups Paid Two Relatives of House Leader,” Washington Post, April 6, 2005.
* Accepting illegal gifts of foreign travel, lodging and an exclusive golf outing from lobbyist Jack Abramoff. Although DeLay listed the nonprofit National Center for Public Policy Research as the sponsor of a $70,000 trip, Abramoff reportedly had actually solicited checks from two of his clients, the Mississippi Band of Choctaw Indians and eLottery Inc., to pay for the trip through the nonprofit group. Two months after the trip, DeLay helped kill legislation opposed by the tribe and the company.
Source: “Probe of Abramoff and Nonprofits’ Money Opens; Senate Finance Committee Seeks Records on Trips by Reps. DeLay and Ney, Donations to Indian Tribes,” The Washington Post, March 17, 2005
* Taking trip to South Korea with other House Members and staff funded by Korea-U.S. Exchange Council, a business-financed group created with the help of a lobbying firm headed by DeLay’s former chief of staff. The Council is a registered foreign agent, and House rules state: “a Member, officer or employee may not accept travel expenses from a registered lobbyist or agent of a foreign principal.”
Source: “S. Korean Group Sponsored DeLay Trip; Visits May Have Broken House Rules,” The Washington Post, March 10, 2005
Protecting Delay: Changing Ethics Rules
* Changed House ethics rules to let a complaint die if the ethics committee cannot decide whether it should be investigated within 45 days. Link
Source: “After Retreat, G.O.P. Changes House Ethics Rule,” The New York Times, January 5, 2005
* Changed House ethics rules to allow either party to block an ethics investigation by voting along party lines, thus denying a majority vote to allow it to proceed.
Source: “After Retreat, G.O.P. Changes House Ethics Rule,” The New York Times, January 5, 2005
* Changed House ethics rules to allow several members involved in a single ethics investigation to hire the same attorney. House rules had prohibited this practice in order to ensure one attorney could not gain access to too much information and potentially coordinate testimony.
* The House Republican Conference changed its internal rules, rescinding a provision that required a member to step down from a leadership post if indicted. The rule change was itself later rescinded after adverse publicity. Link
Source: “GOP Pushes Rule Change To Protect DeLay’s Post,” The Washington Post, November 17, 2004
* Unsuccessful attempts were made to change House ethics rules to eliminate the broad rule that Members should conduct themselves in a manner that “reflects creditably” on the House. This had been the basis for sanctions by the ethics committee and the House. Link
Source: “House to Consider Relaxing Its Rules; GOP Leaders Seek Ethics Changes,” The Washington Post, December 31, 2004
Protecting Delay: Ethics Committee Purge
* Speaker Dennis Hastert removed Rep. Joel Hefley (D-CO) as chairman of the Ethics Committee that oversaw three admonishments of DeLay in 2004. Prior to his removal, Hefley said of Republican colleagues he would not name: “They said I was hurting my career here. The implication is that some form of retribution would be taken.” Hefley also told a newspaper after the third DeLay admonishment: “I’ve been attacked; I’ve been threatened.” Link
Sources: “Ethics Panel’s Chair Is the Toughest Seat in the House,” The Washington Post, January 7, 2005; “Hefley: ‘I was threatened’,” The Hill, October 13, 2004
* Replaced the two members of the Ethics Committee, Rep. Kenny Hulshof (R-MO) and Rep. Steve LaTourette (R-OH), who both admonished DeLay and voted against the Republican Conference rule changes to protect DeLay, with two Republican loyalists, Rep. Lamar Smith (R-TX) and Tom Cole (R-OK). Smith and Cole contributed $10,000 and $5,000, respectively, to DeLay’s legal defense fund. Smith also co-hosted a fundraiser with DeLay for Texans’ for a Republican Majority, which is now the subject of a grand jury instigation. Link
Source: “Ethics Purge,” The Washington Post, February 5, 2005
* Rep. Doc Hastings (R-WA), who replaced Hefley as Ethics Committee chairman, fired several longtime committee staffers, including John Vargo, the staff director and chief counsel, and Paul Lewis, a counsel. Hastings’ office defended his decision to replace Vargo and Lewis as standard practice for a new chairman, although both Vargo and Lewis had been working on the committee since before Hefley was its chairman. Link
Source: “Critics Slam Hastings’ Dismissal of Ethics Staff,” Roll Call, February 17, 2005
Protecting Delay: Intimidate Accusers
* After being scolded twice by the Ethics Committee in one week, DeLay responded through his lawyer with a letter to the chairman of the House Rules Committee alleging Rep. Bell’s complaint was filed in order to “raise funds for non-member groups,” specifically Citizens for Responsibility and Ethics in Washington (CREW). The letter stated “Bell and CREW lodged libelous and specious allegations against Majority Leader DeLay ... apparently with blatant disregard to the veracity of their statements.” In response, Ethics Committee Chairman Helfey said: “If DeLay and his lawyer feel he was treated unfairly, they can come back and we can open it all back up again.” Link
Source: “DeLay attacks accuser after ethics panel rebuke,” The Washington Times, October 9, 2004
* Even though the Ethics Committee admonished DeLay for two of the allegations raised in a complaint filed by Rep. Chris Bell (R-TX) (and is withholding a ruling on a third allegation pending the outcome of prosecutions in Texas), the Ethics Committee in November 2004 warned Bell against using “excessive or inflammatory language or exaggerated charges” and threatened disciplinary action against Members who filed complaints the committee considered excessive or inflammatory. This action serves to discourage the already rare Member-filed complaint to the ethics committee. Link
Source: “Foe of DeLay Rebuked By House Ethics Panel,” The New York Times, November 20, 2004
* Retaliation against Ronnie Earle, the Texas district attorney who is investigating possible violations by DeLay. Specifically, legislation introduced in the GOP-dominated Texas legislature to halt Earle’s high-profile grand jury probe. The legislation would have taken authority over campaign finance violations from the district attorney and given it to a special office in the Texas Ethics Commission that would have the power to stop district attorneys from prosecuting election code violations. Link
Source: “Texas Ethics Bill Could Allow Appointees to Bar Prosecutions,” The Washington Post, February 20, 2005
Fixing the Problem?
* Mollohan Resolution: Rep. Alan B. Mollohan (D-WV), the ranking member of the House Ethics Committee, introduced a resolution (H Res. 131) March 1, 2005 that would undo the controversial changes made to the House ethics rules at the beginning of the 109th Congress. The resolution would repeal the new rule allowing either party to block an investigation by voting along party lines; repeal the new rule allowing a case to die if the committee takes no action within 45 days; repeal the new “collusion” rule, allowing one lawyer to represent more than on individual involved in an ethics case. The resolution has 206 co-sponsors, including Rep. Christopher Shays (R-CT) and former Ethics Committee Chairman Rep. Joel Hefley (R-CO). It has been referred to the House Rules Committee and a subcommittee, ironically, also chaired by the new ethics committee chairman, Rep. Doc Hastings (R-WA), who can block the resolution from moving. Mollohan has threatened a discharge petition if the resolution is not brought to the House floor. Link
Source: “Mollohan Offers Resolution To Reverse Ethics Changes,” National Journal’s CongressDaily, March 02, 2005
* Committee Organization Stalls: Rep. Alan Mollohan (D-WV), ranking member of the Ethics Committee and his Democratic colleagues on the panel refused to allow the committee to operate under the new rules adopted at the beginning of the session. They blocked the committee from organizing or operating in the new Congress until the new rules changes are repealed. Link
Source: “Ethics Panel Faces Organizational Fight,” Roll Call, March 10, 2005
* Pelosi “Privileged” Resolution: Rep. Nancy Pelosi (D-CA), the House minority leader, introduced a “privileged” resolution (H. Res. 153) March 15, 2005, that would have established a bipartisan task force to recommend changes to House ethics rules. The House voted to table (kill) the motion, 223-194, along party lines, except that Rep. Joel Hefley (R-CO) voted against tabling. (To read the resolution and House debate on it, click here. For a breakdown of how House members voted, click here.)
Source: “Hefley joins Dems on ethics,” The Hill, March 16, 2005
* Slaughter Request of the House Rules Committee: In a March 17, 2005 letter, Rep. Louise Slaughter (D-NY), ranking member of the House Rules Committee, asked Rules Committee Chairman David Dreier (R-CA) to hold hearings on the House ethics process and move the Mollohan resolution. (link to Slaughter news release)
* Hastings Requests More Funding for Ethics Committee Despite Staff Cuts: Ethics Committee chairman Doc Hastings (R-WA) asked the House Administration Committee for an additional $1.7 million in its fiscal 2006 budget, 55 percent more than the $3.1 million it received this year. Hastings claims the additional money would be used to add staff to increase the committee’s “investigative capability” and improve ethics education for Members and staff. Ironically, this request comes a month after Hastings dismissed John Vargo, a member of the ethics committee staff since 1996, and Paul Lewis, a former Justice Department lawyer who joined the committee staff in 1997. Currently, the Ethics Committee can not conduct any business until the face-off over accepting the controversial new ethics rules forced through the Houseis resolved.
Source: “Hastings Seeks $1.7M Increase For Revamped Ethics Panel,” National Journal’s CongressDaily, March 17, 2005
Unprecedented four admonishments by unanimous votes of the bipartisan House Ethics Committee
* K Street Project (1999) – Admonished for threatening Electronic Industries Alliance for not hiring a Republican as its president. The Ethics Committee itself initiated this investigation.
Source: “Ethics Panel Chastises DeLay For Threatening Trade Group,” The Washington Post, May 14, 1999
* Westar Energy (2004) – Admonished for creating at least the “appearance” that Westar Energy executives were provided special access at a West Virginia golf retreat as result of $25,000 in corporate contributions to Texans for a Republican Majority, a political group affiliated with DeLay. At the time of the retreat, the House was about to consider an energy bill that Westar hoped to influence. A complaint filed by former Rep. Chris Bell (D-TX) initiated this investigation. Link
Source: Memorandum to Members of the House Ethics Committee
* Texas Redistricting (2004) – Admonished for using government resources for a political undertaking. Delay’s staff contacted the Federal Aviation Administration (FAA) during the 2003 Texas redistricting battle to obtain information from FAA databases on the whereabouts of Democratic Members of the Texas House who had fled Austin in a plane for the purpose of denying the House a quorum. A complaint filed by Bell initiated this investigation. Link
Source: Memorandum to Members of the House Ethics Committee
* Medicare Bill (2004) – Admonished for offering to endorse Rep. Nick Smith’s (R-MI) son, who would be running for Congress, on the House floor in exchange for Rep. Smith’s vote in favor of the Medicare/prescription drug bill. The Ethics Committee itself initiated this investigation. Link
Source: Investigation of Certain Allegations Related to Voting on the Medicare Prescription Drug, Improvement, and Modernization Act of 2003
Pending case
* Illegal Campaign Contributions (2005) – The House Ethics Committee last year was asked to investigate Rep. DeLay for allegedly using his political action committee, Texans for a Republican Majority (TRMPAC), to launder corporate money to Texas state campaigns in 2002, a violation of state law. The committee decided not to take action on the complaint until after Travis County (Austin), Texas District Attorney Ronnie Earle completes his investigation of TRMPAC activities and until indictments against DeLay associates in Texas are disposed of. Link
Source: Memorandum to Members of the House Ethics Committee
Questionable Conduct (not considered by House Ethics Committee)
* Celebrations for Children (CFC) – This charity, which counted DeLay political operatives among its officers, planned to sell tee times to Long Island golf courses, as well as VIP tickets to Broadway plays, yacht cruises and other events that offered access to DeLay during the 2004 Republican convention in New York. The plan was an attempt to misuse the charity’s IRS tax-exempt status to circumvent the ban on raising soft money. After the charity’s plan drew unfavorable attention from the House Ethics Committee, the charity backed away from its convention plans. Link
Source: “Charity Tied to DeLay Is Questioned; Group Asks Lawmakers To Demand Ethics Probe,” Washington Post, March 24, 2004
* Cruise Ship in N.Y.C. – DeLay proposed anchoring the 2,224-passenger Norwegian Dawn cruise ship in the Hudson to accommodate Republicans during the Republican National Convention as an exclusive hotel for lawmakers, lobbyists and special guests. This plan was criticized for providing an environment of special access for large contributors to elected officials. The idea was scrapped after unfavorable publicity.
Source: “They’ll Take Manhattan: Republicans Drop Ship Idea,” The New York Times, December 3, 2003
* Legal Defense Fund Contributions – After Public Citizen complained about possible ethics violations, DeLay was forced to return contributions to his legal defense fund from registered lobbyists because House ethics rules explicitly prohibit such contributions. Link
Source: “Gifts Broke Rules, DeLay Trustee Says,” The New York Times, December 8, 2004
The Latest Ethics Allegations Against Tom DeLay
* A trip DeLay took in 1997 to Moscow may have been underwritten by business interests lobbying on behalf of the Russian government. The $57,238 cost of the trip was reportedly transferred from a mysterious company registered in the Bahamas, Chelsea Commercial Enterprises Ltd., to the nonprofit group, the National Center for Public Policy Research, which officially paid for the trip. On the trip, DeLay met with two registered lobbyists for Chelsea, including Jack Abramoff.
Source: “A 3rd DeLay Trip Under Scrutiny; 1997 Russia Visit Reportedly Backed by Business Interests,” Washington Post, April 6, 2005.
* DeLay's political action and campaign committees have paid his wife and daughter more than $500,000 since 2001. According to disclosure forms, the payments were for “fund-raising fees,” “campaign management” or “payroll.”
Source: “Political Groups Paid Two Relatives of House Leader,” Washington Post, April 6, 2005.
* Accepting illegal gifts of foreign travel, lodging and an exclusive golf outing from lobbyist Jack Abramoff. Although DeLay listed the nonprofit National Center for Public Policy Research as the sponsor of a $70,000 trip, Abramoff reportedly had actually solicited checks from two of his clients, the Mississippi Band of Choctaw Indians and eLottery Inc., to pay for the trip through the nonprofit group. Two months after the trip, DeLay helped kill legislation opposed by the tribe and the company.
Source: “Probe of Abramoff and Nonprofits’ Money Opens; Senate Finance Committee Seeks Records on Trips by Reps. DeLay and Ney, Donations to Indian Tribes,” The Washington Post, March 17, 2005
* Taking trip to South Korea with other House Members and staff funded by Korea-U.S. Exchange Council, a business-financed group created with the help of a lobbying firm headed by DeLay’s former chief of staff. The Council is a registered foreign agent, and House rules state: “a Member, officer or employee may not accept travel expenses from a registered lobbyist or agent of a foreign principal.”
Source: “S. Korean Group Sponsored DeLay Trip; Visits May Have Broken House Rules,” The Washington Post, March 10, 2005
Protecting Delay: Changing Ethics Rules
* Changed House ethics rules to let a complaint die if the ethics committee cannot decide whether it should be investigated within 45 days. Link
Source: “After Retreat, G.O.P. Changes House Ethics Rule,” The New York Times, January 5, 2005
* Changed House ethics rules to allow either party to block an ethics investigation by voting along party lines, thus denying a majority vote to allow it to proceed.
Source: “After Retreat, G.O.P. Changes House Ethics Rule,” The New York Times, January 5, 2005
* Changed House ethics rules to allow several members involved in a single ethics investigation to hire the same attorney. House rules had prohibited this practice in order to ensure one attorney could not gain access to too much information and potentially coordinate testimony.
* The House Republican Conference changed its internal rules, rescinding a provision that required a member to step down from a leadership post if indicted. The rule change was itself later rescinded after adverse publicity. Link
Source: “GOP Pushes Rule Change To Protect DeLay’s Post,” The Washington Post, November 17, 2004
* Unsuccessful attempts were made to change House ethics rules to eliminate the broad rule that Members should conduct themselves in a manner that “reflects creditably” on the House. This had been the basis for sanctions by the ethics committee and the House. Link
Source: “House to Consider Relaxing Its Rules; GOP Leaders Seek Ethics Changes,” The Washington Post, December 31, 2004
Protecting Delay: Ethics Committee Purge
* Speaker Dennis Hastert removed Rep. Joel Hefley (D-CO) as chairman of the Ethics Committee that oversaw three admonishments of DeLay in 2004. Prior to his removal, Hefley said of Republican colleagues he would not name: “They said I was hurting my career here. The implication is that some form of retribution would be taken.” Hefley also told a newspaper after the third DeLay admonishment: “I’ve been attacked; I’ve been threatened.” Link
Sources: “Ethics Panel’s Chair Is the Toughest Seat in the House,” The Washington Post, January 7, 2005; “Hefley: ‘I was threatened’,” The Hill, October 13, 2004
* Replaced the two members of the Ethics Committee, Rep. Kenny Hulshof (R-MO) and Rep. Steve LaTourette (R-OH), who both admonished DeLay and voted against the Republican Conference rule changes to protect DeLay, with two Republican loyalists, Rep. Lamar Smith (R-TX) and Tom Cole (R-OK). Smith and Cole contributed $10,000 and $5,000, respectively, to DeLay’s legal defense fund. Smith also co-hosted a fundraiser with DeLay for Texans’ for a Republican Majority, which is now the subject of a grand jury instigation. Link
Source: “Ethics Purge,” The Washington Post, February 5, 2005
* Rep. Doc Hastings (R-WA), who replaced Hefley as Ethics Committee chairman, fired several longtime committee staffers, including John Vargo, the staff director and chief counsel, and Paul Lewis, a counsel. Hastings’ office defended his decision to replace Vargo and Lewis as standard practice for a new chairman, although both Vargo and Lewis had been working on the committee since before Hefley was its chairman. Link
Source: “Critics Slam Hastings’ Dismissal of Ethics Staff,” Roll Call, February 17, 2005
Protecting Delay: Intimidate Accusers
* After being scolded twice by the Ethics Committee in one week, DeLay responded through his lawyer with a letter to the chairman of the House Rules Committee alleging Rep. Bell’s complaint was filed in order to “raise funds for non-member groups,” specifically Citizens for Responsibility and Ethics in Washington (CREW). The letter stated “Bell and CREW lodged libelous and specious allegations against Majority Leader DeLay ... apparently with blatant disregard to the veracity of their statements.” In response, Ethics Committee Chairman Helfey said: “If DeLay and his lawyer feel he was treated unfairly, they can come back and we can open it all back up again.” Link
Source: “DeLay attacks accuser after ethics panel rebuke,” The Washington Times, October 9, 2004
* Even though the Ethics Committee admonished DeLay for two of the allegations raised in a complaint filed by Rep. Chris Bell (R-TX) (and is withholding a ruling on a third allegation pending the outcome of prosecutions in Texas), the Ethics Committee in November 2004 warned Bell against using “excessive or inflammatory language or exaggerated charges” and threatened disciplinary action against Members who filed complaints the committee considered excessive or inflammatory. This action serves to discourage the already rare Member-filed complaint to the ethics committee. Link
Source: “Foe of DeLay Rebuked By House Ethics Panel,” The New York Times, November 20, 2004
* Retaliation against Ronnie Earle, the Texas district attorney who is investigating possible violations by DeLay. Specifically, legislation introduced in the GOP-dominated Texas legislature to halt Earle’s high-profile grand jury probe. The legislation would have taken authority over campaign finance violations from the district attorney and given it to a special office in the Texas Ethics Commission that would have the power to stop district attorneys from prosecuting election code violations. Link
Source: “Texas Ethics Bill Could Allow Appointees to Bar Prosecutions,” The Washington Post, February 20, 2005
Fixing the Problem?
* Mollohan Resolution: Rep. Alan B. Mollohan (D-WV), the ranking member of the House Ethics Committee, introduced a resolution (H Res. 131) March 1, 2005 that would undo the controversial changes made to the House ethics rules at the beginning of the 109th Congress. The resolution would repeal the new rule allowing either party to block an investigation by voting along party lines; repeal the new rule allowing a case to die if the committee takes no action within 45 days; repeal the new “collusion” rule, allowing one lawyer to represent more than on individual involved in an ethics case. The resolution has 206 co-sponsors, including Rep. Christopher Shays (R-CT) and former Ethics Committee Chairman Rep. Joel Hefley (R-CO). It has been referred to the House Rules Committee and a subcommittee, ironically, also chaired by the new ethics committee chairman, Rep. Doc Hastings (R-WA), who can block the resolution from moving. Mollohan has threatened a discharge petition if the resolution is not brought to the House floor. Link
Source: “Mollohan Offers Resolution To Reverse Ethics Changes,” National Journal’s CongressDaily, March 02, 2005
* Committee Organization Stalls: Rep. Alan Mollohan (D-WV), ranking member of the Ethics Committee and his Democratic colleagues on the panel refused to allow the committee to operate under the new rules adopted at the beginning of the session. They blocked the committee from organizing or operating in the new Congress until the new rules changes are repealed. Link
Source: “Ethics Panel Faces Organizational Fight,” Roll Call, March 10, 2005
* Pelosi “Privileged” Resolution: Rep. Nancy Pelosi (D-CA), the House minority leader, introduced a “privileged” resolution (H. Res. 153) March 15, 2005, that would have established a bipartisan task force to recommend changes to House ethics rules. The House voted to table (kill) the motion, 223-194, along party lines, except that Rep. Joel Hefley (R-CO) voted against tabling. (To read the resolution and House debate on it, click here. For a breakdown of how House members voted, click here.)
Source: “Hefley joins Dems on ethics,” The Hill, March 16, 2005
* Slaughter Request of the House Rules Committee: In a March 17, 2005 letter, Rep. Louise Slaughter (D-NY), ranking member of the House Rules Committee, asked Rules Committee Chairman David Dreier (R-CA) to hold hearings on the House ethics process and move the Mollohan resolution. (link to Slaughter news release)
* Hastings Requests More Funding for Ethics Committee Despite Staff Cuts: Ethics Committee chairman Doc Hastings (R-WA) asked the House Administration Committee for an additional $1.7 million in its fiscal 2006 budget, 55 percent more than the $3.1 million it received this year. Hastings claims the additional money would be used to add staff to increase the committee’s “investigative capability” and improve ethics education for Members and staff. Ironically, this request comes a month after Hastings dismissed John Vargo, a member of the ethics committee staff since 1996, and Paul Lewis, a former Justice Department lawyer who joined the committee staff in 1997. Currently, the Ethics Committee can not conduct any business until the face-off over accepting the controversial new ethics rules forced through the Houseis resolved.
Source: “Hastings Seeks $1.7M Increase For Revamped Ethics Panel,” National Journal’s CongressDaily, March 17, 2005
For more information:
http://www.commoncause.org/site/pp.asp?c=d...
DeLay's Corporate Fundraising Investigated
Money Was Directed to Texas GOP to Help State Redistricting Effort
By R. Jeffrey Smith
Washington Post Staff Writer
Monday, July 12, 2004; Page A01
In May 2001, Enron's top lobbyists in Washington advised the company chairman that then-House Majority Whip Tom DeLay (R-Tex.) was pressing for a $100,000 contribution to his political action committee, in addition to the $250,000 the company had already pledged to the Republican Party that year.
DeLay requested that the new donation come from "a combination of corporate and personal money from Enron's executives," with the understanding that it would be partly spent on "the redistricting effort in Texas," said the e-mail to Kenneth L. Lay from lobbyists Rick Shapiro and Linda Robertson.
The e-mail, which surfaced in a subsequent federal probe of Houston-based Enron, is one of at least a dozen documents obtained by The Washington Post that show DeLay and his associates directed money from corporations and Washington lobbyists to Republican campaign coffers in Texas in 2001 and 2002 as part of a plan to redraw the state's congressional districts.
DeLay's fundraising efforts helped produce a stunning political success. Republicans took control of the Texas House for the first time in 130 years, Texas congressional districts were redrawn to send more Republican lawmakers to Washington, and DeLay -- now the House majority leader -- is more likely to retain his powerful post after the November election, according to political experts.
But DeLay and his colleagues also face serious legal challenges: Texas law bars corporate financing of state legislature campaigns, and a Texas criminal prosecutor is in the 20th month of digging through records of the fundraising, looking at possible violations of at least three statutes. A parallel lawsuit, also in the midst of discovery, is seeking $1.5 million in damages from DeLay's aides and one of his political action committees -- Texans for a Republican Majority (TRMPAC) -- on behalf of four defeated Democratic lawmakers.
DeLay has not been named as a target of the investigation. The prosecutor has said he is focused on the activities of political action committees linked to DeLay and the redistricting effort. But officials in the prosecutor's office say anyone involved in raising, collecting or spending the corporate money, who also knew of its intended use in Texas elections, is vulnerable.
Documents unearthed in the probe make clear that DeLay was central to creating and overseeing the fundraising. What the prosecutors are still assessing is who knew about the day-to-day operations of TRMPAC and how its money was used to benefit Texas House candidates.
Several weeks ago, DeLay hired two criminal defense attorneys to represent him in the probe. He previously created a fund for corporate donors to help him pay legal bills related to allegations of improper fundraising, and is now considering extending its reach to include the fees for these attorneys.
DeLay declined to comment for this article. Stuart Roy, his spokesman, said: "DeLay is doing everything moral, legal and ethical to increase the Republican majority and advance conservative ideas. He raised legal campaign money for effective political activity and that makes his critics enraged. Unfortunately, some Democrats are making an attempt to criminalize politics."
Cristen D. Feldman, the Texas lawyer who filed the suit, said in response, "I guess DeLay and his team forgot they were from Texas . . . [where] the prohibition against clandestine corporate cash is 100 years old."
Many corporate donors were explicitly told in TRMPAC letters that their donations were not "disclosable" in public records. But documents from several unrelated investigations offer an exceptional glimpse of how corporate money was able to influence state politics -- and also of DeLay's bold use of his network of corporate supporters to advance his agenda.
By investing as much as $2.5 million in corporate money in the 2002 election, TRMPAC and another group, the Texas Association of Business, were able to help elect 26 new Republican candidates to the Texas House. The new Republican majority then redrew the congressional district boundaries and, as a result, five Democrats are likely to lose in the Nov. 2 election, according to political experts.
This case "is only one piece of a much larger picture," said Ronnie Earle, the Travis County district attorney running the investigation. "And the larger picture is a blueprint of what is happening in the country, namely a saturation of the political process by large corporate interests with large amounts of money."
Earle, an elected Democrat who oversees the state's Public Integrity Unit, previously prosecuted four elected Republicans and 12 Democrats for corruption or election law violations. So far, he has issued about 100 subpoenas in this case, most of them secret.
Texas is one of 18 states that bar political contributions from corporations for election purposes. But the law has an exception for expenses incurred by political action committees. At issue in Earle's probe, and the lawsuit, is whether the law permits corporations to finance only routine administrative expenses, such as rent, as an official of the Texas Ethics Commission contends, or whether the law permits corporations to finance virtually any activity besides direct contributions to candidates, as TRMPAC's lawyer contends.
The Texas statutes involved -- barring the acceptance of prohibited contributions, the donation of corporate money for improper purposes and the expenditure of money for unauthorized uses -- have been invoked in only a few previous cases. Violations are punishable by as many as 10 years in prison.
Requests to Enron
DeLay's effort to build a Republican majority in the state legislature by channeling large campaign donations to Texas from lobbyists and corporations with interests before Congress dates at least from the 2000 election.
In an e-mail dated July 24 of that year, Enron Executive Vice President Steven J. Kean advised colleagues that DeLay had sent notes to company executives "about designating portions of their contributions for use in Texas."
Three days later, Enron sent a check for $50,000 to the Republican National State Elections Committee (RNSEC) in Washington, and three top executives sent checks totaling $25,000. Around the same time, RNSEC transferred $1.2 million to the Texas Republican Party, which in turn donated $1.3 million to 20 legislative candidates that year, according to federal and state records.
Public records do not track the final destination of the Enron contribution. But Republican National Committee spokeswoman Christine Iverson said any corporate money sent to Texas by RNSEC was spent only for allowable purposes.
In 2001, DeLay assisted Enron in its efforts to secure deregulation legislation. Houston business lobbyist Anne Culver also sent executives at Enron and other energy firms an e-mail in March of that year stating that "Mr. DeLay is interested in what he and the other congressmen may be able to due [sic] legislatively to assist in addressing some of the issues we have" with new pollution-control rules.
DeLay's daughter, Dani Ferro, played a role in arranging access for corporations that gave money to DeLay's project and earned fees for planning fundraising events. On Oct. 10, 2001, Ferro called Enron's Washington-based lobbyists to remind them of an upcoming fundraising event in Florida. "As part of platinum sponsorship, we have the opportunity to have a dinner with Congressman DeLay either here or in Houston," said an e-mail from lobbyist Carolyn Cooney to colleague Linda Robertson. "Dani wants to know" when to schedule it, Cooney added.
Roy, the DeLay spokesman, said there was nothing unusual about DeLay's contacts with Enron, a major local employer that had not yet become notorious for accounting fraud.
Ferro, who has not been named as a target in the investigation but has turned over documents to the grand jury, declined to be quoted for this article.
For a Republican Majority
The efforts to collect money from Enron represented a small part of DeLay's overall campaign to build a GOP majority in the Texas House. DeLay conceived of TRMPAC as a way to counter Democratic spending and pour new money from corporations and their executives into the redistricting effort.
TRMPAC's startup expenses in 2001 were covered by $50,000 in corporate money from DeLay's principal political action committee, Americans for a Republican Majority (ARMPAC). A second payment of $25,000 was made in late 2002. TRMPAC then raised $525,000 in corporate money on its own, and spent less than $70,000 on its director's salary; the rest went mostly toward fundraising, receptions, polls, candidate evaluations, voter identification and private investigations of key Democratic candidates, according to files obtained by The Post.
TRMPAC's director was John Colyandro, a veteran of White House political adviser Karl Rove's direct-mail firm; one of its decision-makers was Jim Ellis, who runs DeLay's ARMPAC; and its chief corporate fundraiser was the same person who performed that function for ARMPAC. As it turned out, ARMPAC donated money to 15 of the same Republican candidates in Texas, sending along cover letters printed on TRMPAC stationery, lawyers said. No allegations of wrongdoing have been made about the ARMPAC donations.
DeLay chaired the TRMPAC advisory board, wrote his own cover letter for its fundraising brochure and received copies of memos that described Texas candidates being considered for TRMPAC funding. He also traveled to Texas to appear at fundraisers and meet with donors, flying at least once on a plane provided by a private company reimbursed by TRMPAC.
TRMPAC never incurred much in the way of expenses such as rent, utilities and supplies -- of the sort that the Ethics Commission says corporations are allowed to finance. "For all functional purposes," Colyandro said in his court deposition, it was run from the home office of its treasurer. Colyandro did not remember leasing any office space or paying a utility bill.
Colyandro set up a multi-tiered membership program for corporate donors: $100,000 bought a "private dinner" with board members such as DeLay, and $50,000 guaranteed a "special dinner" including two other contributors. But even smaller sums brought access: Jack Dillard, a Philip Morris official, sent $10,000 to TRMPAC in July 22, 2002, and in a letter expressed thanks "for the invitation to meet Congressman DeLay in Austin next week."
Some corporations were careful to specify that their contributions were solely meant to defray legally permissible administrative expenses. TRMPAC solicitations being investigated did not mention the restrictions. For example, DeLay was the featured "special guest" at a fundraising luncheon for TRMPAC at the Houston Petroleum Club, where donors were asked to contribute $15,000 to be considered a co-chair and $25,000 to be listed as an underwriter.
"Corporate checks are acceptable," the invitation stated, according to a copy obtained by The Post.
TRMPAC's appeals worked. More than $254,000, out of a total of $600,000, was collected from 14 corporations between the middle of May and early September in 2002. Only two were headquartered in Texas -- a beer distributor and a builder of prisons; the others were mostly firms with regulatory or policy interests in both Washington and Texas.
For example, Westar Energy, which in 2002 sought a federal tax break, gave $25,000 to win "a seat at the table" during congressional deliberations about the provision, even though it had no business in Texas, according to an internal company e-mail that surfaced in a criminal probe. Its executives joined DeLay -- and top officials from other TRMPAC contributors -- at a golf resort in Puerto Rico owned by a TRMPAC contributor that year. DeLay supported the tax break Westar wanted.
Two other internal documents point to heavy involvement by DeLay in TRMPAC's activities. State Rep. Dianne White Delisi, a TRMPAC board member, told oilman T. Boone Pickens in a letter before the 2002 election that "House Majority Whip Tom DeLay agreed to help us and has been an ardent advocate for us by raising money, making phone calls, serving as a special guest at events, and providing assistance with leading strategists," according to a copy. Pickens's company subsequently donated $5,000, and Pickens sent a personal check for $50,000.
A TRMPAC fundraiser also told members of its "finance" board around the same period that DeLay would participate in a conference call "to update everyone on TRMPAC's efforts to date and to discuss our strategy." Roy said DeLay appears to have participated in the call, adding that Delisi's letter accurately summarized DeLay's overall involvement.
RNC Involvement
Besides spending the corporate money it collected to benefit targeted candidates in 2002 -- through polls, fundraising events, voter identification efforts and investigations of Democratic opponents -- TRMPAC also sent corporate money to the Republican Party in Washington, starting a chain of events under review by prosecutors.
It worked like this: On Sept. 10, TRMPAC's director told its accountant that "a blank soft-dollar check" made out to the Republican National State Elections Committee should be sent overnight to Ellis, the ARMPAC director, at his headquarters in Washington, according to a copy of the director's e-mail. "Soft dollars" was a reference to corporate money. Ellis inscribed $190,000 on the check.
The national committee, in turn, sent the same total amount in seven checks ranging from $20,000 to $40,000 to Texas House candidates on Oct. 4, 2002, completing a transfer that Earle and others believe may have been intended to hide the corporate origins of the money and circumvent the law.
The RNSEC contributions were highly unusual. In no other instance did RNSEC spend more than $2,000 on a state legislative candidate in September, October or November; virtually all of its money went instead to Republican governors and attorneys general.
Earle is scrutinizing the Oct. 4 contributions and trying to determine who was involved in "the decision-making process," according to a copy of one of his subpoenas.
Iverson, the RNC spokeswoman, said the Oct. 4 donations were drawn from a non-corporate account, altogether different from the corporate-related account into which the TRMPAC check was deposited. The fact that the total incoming and outgoing amounts were identical was simply "coincidence," she said. She declined to make available documents she said would support the claim, citing the pending lawsuit.
Terry Scarborough, a lawyer for TRMPAC, similarly said he considers the transaction legal.
Jonathan D. Pauerstein, a lawyer for Ellis, who signed the TRMPAC check, said he also considers the transaction legal and noted that matching dollar exchanges of this kind between state organizations and federal parties are common among Democrats as well as Republicans. If they constituted improper laundering, "lots of Democrats and Republicans around the U.S. would have soap on their hands," he said.
Help From Friends
TRMPAC played a central, but not unique, role in DeLay's project, which included other political organizations and was assisted in the end by a key Texas lawmaker.
The nonprofit Texas Association of Business spent $1.9 million in corporate money in 2001 and 2002 to send 4 million letters to voters in many of the same districts where TRMPAC's efforts were concentrated. The group is now a target in the investigation, but its lawyer, Andy Taylor, said it is not subject to the same laws as TRMPAC and did nothing illegal.
The Texas lawmaker who played a critical role in the project was state Rep. Tom Craddick (R), a DeLay ally who was running for House speaker in 2002. On Oct. 21 of that year, TRMPAC sent checks for 14 Republican House candidates to Craddick's office; his office then mailed the checks. The grand jury is now looking into whether this or other actions taken in connection with the speaker's race amounted to using "money or things of value" to influence the outcome of the speaker's election, a violation of state law.
Craddick's lawyer, Roy Minton, said that "there is absolutely nothing illegal" about any actions Craddick took in connection with the race.
In all, 17 House members who received money from TRMPAC were elected. Craddick was elected speaker in a secret ballot, and in May 2003, as the redistricting plan came to the Texas House floor, he ordered state police to help track down Democratic lawmakers trying to boycott the vote. The effort was closely coordinated with DeLay, whose chief political aide Julie Ann Sullivan telephoned the Federal Aviation Administration to find a plane used by some of the Democrats.
The House approved the redistricting plan on Oct. 12, 2003. TRMPAC never reported the bulk of its corporate spending to the Texas Ethics Commission; it was reported only to the Internal Revenue Service, a discrepancy first noticed by a nonprofit advocacy group called Texans for Public Justice. Scarborough, the TRMPAC lawyer, said he believes reporting of this spending in Texas was not required by law.
But Karen Lundquist, the Ethics Commission's nonpartisan executive director, said all expenditures derived from corporate money -- whether for administrative purposes or not -- should have been reported. She also said the rules governing spending by political action committees are clear: Corporate money cannot be used for politically related expenses, such as fundraising and vote drives.
Staff researcher Lucy Shackelford contributed to this report.
Money Was Directed to Texas GOP to Help State Redistricting Effort
By R. Jeffrey Smith
Washington Post Staff Writer
Monday, July 12, 2004; Page A01
In May 2001, Enron's top lobbyists in Washington advised the company chairman that then-House Majority Whip Tom DeLay (R-Tex.) was pressing for a $100,000 contribution to his political action committee, in addition to the $250,000 the company had already pledged to the Republican Party that year.
DeLay requested that the new donation come from "a combination of corporate and personal money from Enron's executives," with the understanding that it would be partly spent on "the redistricting effort in Texas," said the e-mail to Kenneth L. Lay from lobbyists Rick Shapiro and Linda Robertson.
The e-mail, which surfaced in a subsequent federal probe of Houston-based Enron, is one of at least a dozen documents obtained by The Washington Post that show DeLay and his associates directed money from corporations and Washington lobbyists to Republican campaign coffers in Texas in 2001 and 2002 as part of a plan to redraw the state's congressional districts.
DeLay's fundraising efforts helped produce a stunning political success. Republicans took control of the Texas House for the first time in 130 years, Texas congressional districts were redrawn to send more Republican lawmakers to Washington, and DeLay -- now the House majority leader -- is more likely to retain his powerful post after the November election, according to political experts.
But DeLay and his colleagues also face serious legal challenges: Texas law bars corporate financing of state legislature campaigns, and a Texas criminal prosecutor is in the 20th month of digging through records of the fundraising, looking at possible violations of at least three statutes. A parallel lawsuit, also in the midst of discovery, is seeking $1.5 million in damages from DeLay's aides and one of his political action committees -- Texans for a Republican Majority (TRMPAC) -- on behalf of four defeated Democratic lawmakers.
DeLay has not been named as a target of the investigation. The prosecutor has said he is focused on the activities of political action committees linked to DeLay and the redistricting effort. But officials in the prosecutor's office say anyone involved in raising, collecting or spending the corporate money, who also knew of its intended use in Texas elections, is vulnerable.
Documents unearthed in the probe make clear that DeLay was central to creating and overseeing the fundraising. What the prosecutors are still assessing is who knew about the day-to-day operations of TRMPAC and how its money was used to benefit Texas House candidates.
Several weeks ago, DeLay hired two criminal defense attorneys to represent him in the probe. He previously created a fund for corporate donors to help him pay legal bills related to allegations of improper fundraising, and is now considering extending its reach to include the fees for these attorneys.
DeLay declined to comment for this article. Stuart Roy, his spokesman, said: "DeLay is doing everything moral, legal and ethical to increase the Republican majority and advance conservative ideas. He raised legal campaign money for effective political activity and that makes his critics enraged. Unfortunately, some Democrats are making an attempt to criminalize politics."
Cristen D. Feldman, the Texas lawyer who filed the suit, said in response, "I guess DeLay and his team forgot they were from Texas . . . [where] the prohibition against clandestine corporate cash is 100 years old."
Many corporate donors were explicitly told in TRMPAC letters that their donations were not "disclosable" in public records. But documents from several unrelated investigations offer an exceptional glimpse of how corporate money was able to influence state politics -- and also of DeLay's bold use of his network of corporate supporters to advance his agenda.
By investing as much as $2.5 million in corporate money in the 2002 election, TRMPAC and another group, the Texas Association of Business, were able to help elect 26 new Republican candidates to the Texas House. The new Republican majority then redrew the congressional district boundaries and, as a result, five Democrats are likely to lose in the Nov. 2 election, according to political experts.
This case "is only one piece of a much larger picture," said Ronnie Earle, the Travis County district attorney running the investigation. "And the larger picture is a blueprint of what is happening in the country, namely a saturation of the political process by large corporate interests with large amounts of money."
Earle, an elected Democrat who oversees the state's Public Integrity Unit, previously prosecuted four elected Republicans and 12 Democrats for corruption or election law violations. So far, he has issued about 100 subpoenas in this case, most of them secret.
Texas is one of 18 states that bar political contributions from corporations for election purposes. But the law has an exception for expenses incurred by political action committees. At issue in Earle's probe, and the lawsuit, is whether the law permits corporations to finance only routine administrative expenses, such as rent, as an official of the Texas Ethics Commission contends, or whether the law permits corporations to finance virtually any activity besides direct contributions to candidates, as TRMPAC's lawyer contends.
The Texas statutes involved -- barring the acceptance of prohibited contributions, the donation of corporate money for improper purposes and the expenditure of money for unauthorized uses -- have been invoked in only a few previous cases. Violations are punishable by as many as 10 years in prison.
Requests to Enron
DeLay's effort to build a Republican majority in the state legislature by channeling large campaign donations to Texas from lobbyists and corporations with interests before Congress dates at least from the 2000 election.
In an e-mail dated July 24 of that year, Enron Executive Vice President Steven J. Kean advised colleagues that DeLay had sent notes to company executives "about designating portions of their contributions for use in Texas."
Three days later, Enron sent a check for $50,000 to the Republican National State Elections Committee (RNSEC) in Washington, and three top executives sent checks totaling $25,000. Around the same time, RNSEC transferred $1.2 million to the Texas Republican Party, which in turn donated $1.3 million to 20 legislative candidates that year, according to federal and state records.
Public records do not track the final destination of the Enron contribution. But Republican National Committee spokeswoman Christine Iverson said any corporate money sent to Texas by RNSEC was spent only for allowable purposes.
In 2001, DeLay assisted Enron in its efforts to secure deregulation legislation. Houston business lobbyist Anne Culver also sent executives at Enron and other energy firms an e-mail in March of that year stating that "Mr. DeLay is interested in what he and the other congressmen may be able to due [sic] legislatively to assist in addressing some of the issues we have" with new pollution-control rules.
DeLay's daughter, Dani Ferro, played a role in arranging access for corporations that gave money to DeLay's project and earned fees for planning fundraising events. On Oct. 10, 2001, Ferro called Enron's Washington-based lobbyists to remind them of an upcoming fundraising event in Florida. "As part of platinum sponsorship, we have the opportunity to have a dinner with Congressman DeLay either here or in Houston," said an e-mail from lobbyist Carolyn Cooney to colleague Linda Robertson. "Dani wants to know" when to schedule it, Cooney added.
Roy, the DeLay spokesman, said there was nothing unusual about DeLay's contacts with Enron, a major local employer that had not yet become notorious for accounting fraud.
Ferro, who has not been named as a target in the investigation but has turned over documents to the grand jury, declined to be quoted for this article.
For a Republican Majority
The efforts to collect money from Enron represented a small part of DeLay's overall campaign to build a GOP majority in the Texas House. DeLay conceived of TRMPAC as a way to counter Democratic spending and pour new money from corporations and their executives into the redistricting effort.
TRMPAC's startup expenses in 2001 were covered by $50,000 in corporate money from DeLay's principal political action committee, Americans for a Republican Majority (ARMPAC). A second payment of $25,000 was made in late 2002. TRMPAC then raised $525,000 in corporate money on its own, and spent less than $70,000 on its director's salary; the rest went mostly toward fundraising, receptions, polls, candidate evaluations, voter identification and private investigations of key Democratic candidates, according to files obtained by The Post.
TRMPAC's director was John Colyandro, a veteran of White House political adviser Karl Rove's direct-mail firm; one of its decision-makers was Jim Ellis, who runs DeLay's ARMPAC; and its chief corporate fundraiser was the same person who performed that function for ARMPAC. As it turned out, ARMPAC donated money to 15 of the same Republican candidates in Texas, sending along cover letters printed on TRMPAC stationery, lawyers said. No allegations of wrongdoing have been made about the ARMPAC donations.
DeLay chaired the TRMPAC advisory board, wrote his own cover letter for its fundraising brochure and received copies of memos that described Texas candidates being considered for TRMPAC funding. He also traveled to Texas to appear at fundraisers and meet with donors, flying at least once on a plane provided by a private company reimbursed by TRMPAC.
TRMPAC never incurred much in the way of expenses such as rent, utilities and supplies -- of the sort that the Ethics Commission says corporations are allowed to finance. "For all functional purposes," Colyandro said in his court deposition, it was run from the home office of its treasurer. Colyandro did not remember leasing any office space or paying a utility bill.
Colyandro set up a multi-tiered membership program for corporate donors: $100,000 bought a "private dinner" with board members such as DeLay, and $50,000 guaranteed a "special dinner" including two other contributors. But even smaller sums brought access: Jack Dillard, a Philip Morris official, sent $10,000 to TRMPAC in July 22, 2002, and in a letter expressed thanks "for the invitation to meet Congressman DeLay in Austin next week."
Some corporations were careful to specify that their contributions were solely meant to defray legally permissible administrative expenses. TRMPAC solicitations being investigated did not mention the restrictions. For example, DeLay was the featured "special guest" at a fundraising luncheon for TRMPAC at the Houston Petroleum Club, where donors were asked to contribute $15,000 to be considered a co-chair and $25,000 to be listed as an underwriter.
"Corporate checks are acceptable," the invitation stated, according to a copy obtained by The Post.
TRMPAC's appeals worked. More than $254,000, out of a total of $600,000, was collected from 14 corporations between the middle of May and early September in 2002. Only two were headquartered in Texas -- a beer distributor and a builder of prisons; the others were mostly firms with regulatory or policy interests in both Washington and Texas.
For example, Westar Energy, which in 2002 sought a federal tax break, gave $25,000 to win "a seat at the table" during congressional deliberations about the provision, even though it had no business in Texas, according to an internal company e-mail that surfaced in a criminal probe. Its executives joined DeLay -- and top officials from other TRMPAC contributors -- at a golf resort in Puerto Rico owned by a TRMPAC contributor that year. DeLay supported the tax break Westar wanted.
Two other internal documents point to heavy involvement by DeLay in TRMPAC's activities. State Rep. Dianne White Delisi, a TRMPAC board member, told oilman T. Boone Pickens in a letter before the 2002 election that "House Majority Whip Tom DeLay agreed to help us and has been an ardent advocate for us by raising money, making phone calls, serving as a special guest at events, and providing assistance with leading strategists," according to a copy. Pickens's company subsequently donated $5,000, and Pickens sent a personal check for $50,000.
A TRMPAC fundraiser also told members of its "finance" board around the same period that DeLay would participate in a conference call "to update everyone on TRMPAC's efforts to date and to discuss our strategy." Roy said DeLay appears to have participated in the call, adding that Delisi's letter accurately summarized DeLay's overall involvement.
RNC Involvement
Besides spending the corporate money it collected to benefit targeted candidates in 2002 -- through polls, fundraising events, voter identification efforts and investigations of Democratic opponents -- TRMPAC also sent corporate money to the Republican Party in Washington, starting a chain of events under review by prosecutors.
It worked like this: On Sept. 10, TRMPAC's director told its accountant that "a blank soft-dollar check" made out to the Republican National State Elections Committee should be sent overnight to Ellis, the ARMPAC director, at his headquarters in Washington, according to a copy of the director's e-mail. "Soft dollars" was a reference to corporate money. Ellis inscribed $190,000 on the check.
The national committee, in turn, sent the same total amount in seven checks ranging from $20,000 to $40,000 to Texas House candidates on Oct. 4, 2002, completing a transfer that Earle and others believe may have been intended to hide the corporate origins of the money and circumvent the law.
The RNSEC contributions were highly unusual. In no other instance did RNSEC spend more than $2,000 on a state legislative candidate in September, October or November; virtually all of its money went instead to Republican governors and attorneys general.
Earle is scrutinizing the Oct. 4 contributions and trying to determine who was involved in "the decision-making process," according to a copy of one of his subpoenas.
Iverson, the RNC spokeswoman, said the Oct. 4 donations were drawn from a non-corporate account, altogether different from the corporate-related account into which the TRMPAC check was deposited. The fact that the total incoming and outgoing amounts were identical was simply "coincidence," she said. She declined to make available documents she said would support the claim, citing the pending lawsuit.
Terry Scarborough, a lawyer for TRMPAC, similarly said he considers the transaction legal.
Jonathan D. Pauerstein, a lawyer for Ellis, who signed the TRMPAC check, said he also considers the transaction legal and noted that matching dollar exchanges of this kind between state organizations and federal parties are common among Democrats as well as Republicans. If they constituted improper laundering, "lots of Democrats and Republicans around the U.S. would have soap on their hands," he said.
Help From Friends
TRMPAC played a central, but not unique, role in DeLay's project, which included other political organizations and was assisted in the end by a key Texas lawmaker.
The nonprofit Texas Association of Business spent $1.9 million in corporate money in 2001 and 2002 to send 4 million letters to voters in many of the same districts where TRMPAC's efforts were concentrated. The group is now a target in the investigation, but its lawyer, Andy Taylor, said it is not subject to the same laws as TRMPAC and did nothing illegal.
The Texas lawmaker who played a critical role in the project was state Rep. Tom Craddick (R), a DeLay ally who was running for House speaker in 2002. On Oct. 21 of that year, TRMPAC sent checks for 14 Republican House candidates to Craddick's office; his office then mailed the checks. The grand jury is now looking into whether this or other actions taken in connection with the speaker's race amounted to using "money or things of value" to influence the outcome of the speaker's election, a violation of state law.
Craddick's lawyer, Roy Minton, said that "there is absolutely nothing illegal" about any actions Craddick took in connection with the race.
In all, 17 House members who received money from TRMPAC were elected. Craddick was elected speaker in a secret ballot, and in May 2003, as the redistricting plan came to the Texas House floor, he ordered state police to help track down Democratic lawmakers trying to boycott the vote. The effort was closely coordinated with DeLay, whose chief political aide Julie Ann Sullivan telephoned the Federal Aviation Administration to find a plane used by some of the Democrats.
The House approved the redistricting plan on Oct. 12, 2003. TRMPAC never reported the bulk of its corporate spending to the Texas Ethics Commission; it was reported only to the Internal Revenue Service, a discrepancy first noticed by a nonprofit advocacy group called Texans for Public Justice. Scarborough, the TRMPAC lawyer, said he believes reporting of this spending in Texas was not required by law.
But Karen Lundquist, the Ethics Commission's nonpartisan executive director, said all expenditures derived from corporate money -- whether for administrative purposes or not -- should have been reported. She also said the rules governing spending by political action committees are clear: Corporate money cannot be used for politically related expenses, such as fundraising and vote drives.
Staff researcher Lucy Shackelford contributed to this report.
Frist Stock Sale Raises Questions on Timing
By R. Jeffrey Smith and Jeffrey H. Birnbaum
Washington Post Staff Writers
Thursday, September 22, 2005; A10
Senate Majority Leader Bill Frist (R-Tenn.) has maintained for years that his stock holdings in the nation's largest for-profit hospital chain posed no conflict of interest for a policymaker deeply involved in health care matters. He even received two rulings in the 1990s from the Senate ethics committee that blessed the holding of the stock in blind trusts.
So when Frist decided in June to dump all the stock, and later cited as the reason his desire to avoid the appearance of a conflict of interest, eyebrows went up among ethics experts and congressional watchdogs. Why did he do it at that time?
Precisely a month later, after the stock was sold, its price tumbled 9 percent when executives in the company -- HCA Inc., which was founded by Frist's father and on whose board Frist's brother serves -- disclosed that hospital admissions of insured patients were lower than expected, depressing profits in the second quarter.
The timing thus raised questions about whether Frist had somehow traded on information he obtained in advance from the company. "Frist has been in the Senate for many years now, and the conflict is not new," said Melanie Sloan, executive director of the watchdog group, Citizens for Responsibility and Ethics in Washington. "Why did he decide to sell it then? Why not years ago? What's changed? Did he know that the stock was about to take a fall?"
Frist spokeswoman Amy Call said yesterday that Frist "did not have any conversations with HCA executives about HCA stock when he was making the decision to divest." Asked more generally whether he had discussed the company's performance with its executives, she replied, "No."
She said Frist's decision was based "purely on wanting to avoid any future appearances of conflict" while pursuing new health initiatives, and said he had no way of knowing -- under the rules of the blind trusts -- how quickly the stock would be sold. Call promised to provide recent examples of criticism directed at Frist's stock holdings, but all those she eventually cited occurred before May 2004.
Until the sale, Frist's holdings in HCA formed a significant source of his wealth. His political career was launched in part by a loan secured by the stock; in 1994, he valued his holdings at $13 million, and the following year he placed them in a blind trust. In 2000, he transferred the HCA stock into a new blind trust, a transaction that could have given him insight into its value.
Frist's signed financial disclosure statements indicate that the overall value of his blind trusts did not substantially change from 2003 to 2004. As one of the Senate's multimillionaires, Frist has other non-HCA-stock holdings outside of the trusts.
Several ethics experts and watchdogs said they found it odd that Frist could intervene to order such a sale when the HCA stock was ostensibly out of his reach in blind trusts. Fred Wertheimer, president of Democracy 21, said, "The notion that you have a blind trust but you can tell your trustee when to sell stock in it just doesn't make any sense. It means you have a seeing eye trust and not a blind trust. It's ridiculous."
Larry Noble, executive director of the nonpartisan Center for Responsive Politics, agreed that the arrangement "seems to defeat the purpose of a blind trust. Somebody else is supposed to have control over it to avoid potential conflicts of interest. If you can just reach in and sell stock, it seems it defeats the whole purpose."
A sample agreement for blind trusts published by the Senate ethics committee staff on its Web site states that there should be no "direct or indirect communication" between senators and trustees unless the senator is directing the trustee "to sell all of an asset . . . [which] creates a conflict of interest or the appearance thereof due to the subsequent assumption of duties" by the senator.
Jan W. Baran, a Republican ethics expert at Wiley Rein & Fielding LLP, said, "That's the question, 'What changed?' " to compel Frist to sell his stock when he did.
According to Senate ethics rules, Baran said, Frist "can tell somebody to dispose of all of an asset that was initially placed into the blind trust. As a matter of Senate ethics rules, he is in compliance. The question that remains is, why did he sell the stock at that time? What conflicts arose in June that did not exist beforehand?"
"For the Securities and Exchange Commission," Baran added, "the answer is probably very important."
According to Thomson Financial, a reporting service, seven senior HCA executives sold 574,882 shares worth $19,942,610 between May 17 and June 10. A company spokesman, Jeff Prescott, said the executives are entitled "like other stockholders [to] make personal decisions . . . about when to sell." He said the executives complied with "blackout restrictions" imposed by the SEC to prevent dealing within a certain period prior to restatements of earnings.
An SEC spokesman said it is the commission's policy not to comment on investigations, and would neither confirm nor deny that it is probing insider trading at HCA.
Researcher Richard Drezen, in New York, contributed to this report.
By R. Jeffrey Smith and Jeffrey H. Birnbaum
Washington Post Staff Writers
Thursday, September 22, 2005; A10
Senate Majority Leader Bill Frist (R-Tenn.) has maintained for years that his stock holdings in the nation's largest for-profit hospital chain posed no conflict of interest for a policymaker deeply involved in health care matters. He even received two rulings in the 1990s from the Senate ethics committee that blessed the holding of the stock in blind trusts.
So when Frist decided in June to dump all the stock, and later cited as the reason his desire to avoid the appearance of a conflict of interest, eyebrows went up among ethics experts and congressional watchdogs. Why did he do it at that time?
Precisely a month later, after the stock was sold, its price tumbled 9 percent when executives in the company -- HCA Inc., which was founded by Frist's father and on whose board Frist's brother serves -- disclosed that hospital admissions of insured patients were lower than expected, depressing profits in the second quarter.
The timing thus raised questions about whether Frist had somehow traded on information he obtained in advance from the company. "Frist has been in the Senate for many years now, and the conflict is not new," said Melanie Sloan, executive director of the watchdog group, Citizens for Responsibility and Ethics in Washington. "Why did he decide to sell it then? Why not years ago? What's changed? Did he know that the stock was about to take a fall?"
Frist spokeswoman Amy Call said yesterday that Frist "did not have any conversations with HCA executives about HCA stock when he was making the decision to divest." Asked more generally whether he had discussed the company's performance with its executives, she replied, "No."
She said Frist's decision was based "purely on wanting to avoid any future appearances of conflict" while pursuing new health initiatives, and said he had no way of knowing -- under the rules of the blind trusts -- how quickly the stock would be sold. Call promised to provide recent examples of criticism directed at Frist's stock holdings, but all those she eventually cited occurred before May 2004.
Until the sale, Frist's holdings in HCA formed a significant source of his wealth. His political career was launched in part by a loan secured by the stock; in 1994, he valued his holdings at $13 million, and the following year he placed them in a blind trust. In 2000, he transferred the HCA stock into a new blind trust, a transaction that could have given him insight into its value.
Frist's signed financial disclosure statements indicate that the overall value of his blind trusts did not substantially change from 2003 to 2004. As one of the Senate's multimillionaires, Frist has other non-HCA-stock holdings outside of the trusts.
Several ethics experts and watchdogs said they found it odd that Frist could intervene to order such a sale when the HCA stock was ostensibly out of his reach in blind trusts. Fred Wertheimer, president of Democracy 21, said, "The notion that you have a blind trust but you can tell your trustee when to sell stock in it just doesn't make any sense. It means you have a seeing eye trust and not a blind trust. It's ridiculous."
Larry Noble, executive director of the nonpartisan Center for Responsive Politics, agreed that the arrangement "seems to defeat the purpose of a blind trust. Somebody else is supposed to have control over it to avoid potential conflicts of interest. If you can just reach in and sell stock, it seems it defeats the whole purpose."
A sample agreement for blind trusts published by the Senate ethics committee staff on its Web site states that there should be no "direct or indirect communication" between senators and trustees unless the senator is directing the trustee "to sell all of an asset . . . [which] creates a conflict of interest or the appearance thereof due to the subsequent assumption of duties" by the senator.
Jan W. Baran, a Republican ethics expert at Wiley Rein & Fielding LLP, said, "That's the question, 'What changed?' " to compel Frist to sell his stock when he did.
According to Senate ethics rules, Baran said, Frist "can tell somebody to dispose of all of an asset that was initially placed into the blind trust. As a matter of Senate ethics rules, he is in compliance. The question that remains is, why did he sell the stock at that time? What conflicts arose in June that did not exist beforehand?"
"For the Securities and Exchange Commission," Baran added, "the answer is probably very important."
According to Thomson Financial, a reporting service, seven senior HCA executives sold 574,882 shares worth $19,942,610 between May 17 and June 10. A company spokesman, Jeff Prescott, said the executives are entitled "like other stockholders [to] make personal decisions . . . about when to sell." He said the executives complied with "blackout restrictions" imposed by the SEC to prevent dealing within a certain period prior to restatements of earnings.
An SEC spokesman said it is the commission's policy not to comment on investigations, and would neither confirm nor deny that it is probing insider trading at HCA.
Researcher Richard Drezen, in New York, contributed to this report.
For more information:
http://www.washingtonpost.com/wp-dyn/conte...
Posted 9/27/2005 7:48 PM
Prosecutors seek to question Limbaugh docs
WEST PALM BEACH, Fla. (AP) — Prosecutors want to question Rush Limbaugh's physicians in their probe of the conservative commentator's possible "doctor shopping" for prescription painkillers, according to a motion filed Tuesday.
Prosecutors believe Limbaugh illegally deceived multiple doctors to receive overlapping prescriptions for painkillers. He has not been charged with a crime.
Limbaugh's attorneys argue the request for depositions from the doctors and their employees could reveal privileged medical information.
Limbaugh has acknowledged an addiction to pain medication, attributing it to severe back pain, and took a five-week leave from his radio show to enter a treatment program in October 2003.
The criminal investigation into Limbaugh's drug use has been ongoing for nearly two years. Throughout, his attorneys have fought vigorously over privacy concerns.
Assistant State Attorney James Martz told the court Tuesday he would ask the doctors and their employees only about matters relating to Limbaugh's possible "doctor shopping."
Limbaugh has accused Palm Beach County State Attorney Barry Krischer, a Democrat, of a "fishing expedition" that's politically motivated.
Prosecutors seek to question Limbaugh docs
WEST PALM BEACH, Fla. (AP) — Prosecutors want to question Rush Limbaugh's physicians in their probe of the conservative commentator's possible "doctor shopping" for prescription painkillers, according to a motion filed Tuesday.
Prosecutors believe Limbaugh illegally deceived multiple doctors to receive overlapping prescriptions for painkillers. He has not been charged with a crime.
Limbaugh's attorneys argue the request for depositions from the doctors and their employees could reveal privileged medical information.
Limbaugh has acknowledged an addiction to pain medication, attributing it to severe back pain, and took a five-week leave from his radio show to enter a treatment program in October 2003.
The criminal investigation into Limbaugh's drug use has been ongoing for nearly two years. Throughout, his attorneys have fought vigorously over privacy concerns.
Assistant State Attorney James Martz told the court Tuesday he would ask the doctors and their employees only about matters relating to Limbaugh's possible "doctor shopping."
Limbaugh has accused Palm Beach County State Attorney Barry Krischer, a Democrat, of a "fishing expedition" that's politically motivated.
Ex-Lobbyist Is Focus of Widening Investigations
By Susan Schmidt
Washington Post Staff Writer
Friday, July 16, 2004; Page A19
Former powerhouse lobbyist Jack Abramoff and public relations entrepreneur Michael Scanlon are the focus of widening investigations this summer, one by Congress and the other a criminal probe involving five federal agencies.
A criminal task force of investigators from the FBI, Internal Revenue Service, the Justice Department's public integrity section, the National Indian Gaming Commission and the Interior Department inspector general's office is looking into payments Abramoff and Scanlon received from an array of clients, including 11 wealthy Indian tribes that operate gambling casinos, according to officials familiar with the investigation.
In Congress, the Senate Indian Affairs Committee has set a deadline of this week for responses to subpoenas it has issued. Congressional staff members from the Indian Affairs Committee and the Commerce Committee have spent five months gathering documents and interviewing tribal members and others in preparation for a public hearing in September, officials said.
Government sources and people who have been interviewed said the twin investigations are examining tens of millions of dollars in fees that Abramoff and Scanlon received from clients, including, in Abramoff's case, a number of foreign entities. Investigators also are looking into ties the two have to members of Congress, into campaign donations and into whether criminal or tax codes were violated in the work they contracted to do or by the fees they collected, the sources said.
The Washington Post reported earlier this year that Abramoff, who is well-connected to conservative Republicans in the White House and Congress, and Scanlon, a former spokesman for House Majority Leader Tom DeLay (R-Tex.), received more than $45 million in lobbying and public affairs work from four newly wealthy tribes in the past three years. Those fees rival what some of the biggest corporate interests in the country pay to influence public policy.
The fees and $2.9 million in federal political contributions Abramoff advised the tribes to make, two-thirds of it to Republicans, have led to battles in some tribes. Some tribe members question why their leaders approved such payments.
Abramoff also directed tribes to donate to several obscure foundations that appear to have no connection to Indian concerns, including a think tank in Rehoboth Beach, Del., set up by Scanlon.
The revelations led to Abramoff's ouster in March from Greenberg Traurig, the law firm where he led one of Washington's most successful lobbying groups. Greenberg Traurig said it acted after Abramoff "disclosed to the firm for the first time personal transactions and related conduct which are unacceptable to the firm."
Lawyers for Abramoff and Scanlon declined to comment this week on the investigations.
Congressional investigators learned in March that Scanlon or organizations he was associated with paid Abramoff $10 million, an arrangement that was not known to the tribes or to Greenberg Traurig. Abramoff, who must publicly disclose lobbying fees, urged the tribes to hire one of Scanlon's public relations firms, often for much higher amounts than Abramoff's firm was receiving. Those public relations fees did not have to be disclosed under federal lobbying rules.
In an interview earlier this year, Abramoff denied having any financial stake in Scanlon's business.
Federal law permitting Indian gambling requires that the proceeds be spent to benefit the tribe, but regulators in Washington do not normally become involved in monitoring the money that closely. "Nobody is tasked to see where all the dollars get spent," said Philip N. Hogen, chairman of the National Indian Gaming Commission.
Hogen declined to comment on the investigations of Abramoff and Scanlon. But he said federal agencies have formed a working group to more closely coordinate criminal investigations that have arisen out of Indian gambling over the past six months.
"This is really high on the priority list of tribal concerns," he said. "This is a cash cow in many circumstances, and tribes are concerned about protection of tribal assets."
Indian gambling, officials said, has grown from a $100 million-a-year industry in 1988 to a $16 billion industry today.
Ernst Weyand, an official in the FBI's Indian Country investigative unit, said his office is working closely with organized-crime investigators. Officials in various agencies said the new working group makes it easier for federal investigators to take on larger and more complex investigations.
One person who has been interviewed by the FBI in connection with the investigation of Abramoff and Scanlon said the areas of interest ranged from foreign lobbying clients to billing practices involving the tribes and whether there were efforts to illegally fix tribal elections. He also said the FBI is looking at the relationship Abramoff and Scanlon and their firms had with some members of Congress.
By Susan Schmidt
Washington Post Staff Writer
Friday, July 16, 2004; Page A19
Former powerhouse lobbyist Jack Abramoff and public relations entrepreneur Michael Scanlon are the focus of widening investigations this summer, one by Congress and the other a criminal probe involving five federal agencies.
A criminal task force of investigators from the FBI, Internal Revenue Service, the Justice Department's public integrity section, the National Indian Gaming Commission and the Interior Department inspector general's office is looking into payments Abramoff and Scanlon received from an array of clients, including 11 wealthy Indian tribes that operate gambling casinos, according to officials familiar with the investigation.
In Congress, the Senate Indian Affairs Committee has set a deadline of this week for responses to subpoenas it has issued. Congressional staff members from the Indian Affairs Committee and the Commerce Committee have spent five months gathering documents and interviewing tribal members and others in preparation for a public hearing in September, officials said.
Government sources and people who have been interviewed said the twin investigations are examining tens of millions of dollars in fees that Abramoff and Scanlon received from clients, including, in Abramoff's case, a number of foreign entities. Investigators also are looking into ties the two have to members of Congress, into campaign donations and into whether criminal or tax codes were violated in the work they contracted to do or by the fees they collected, the sources said.
The Washington Post reported earlier this year that Abramoff, who is well-connected to conservative Republicans in the White House and Congress, and Scanlon, a former spokesman for House Majority Leader Tom DeLay (R-Tex.), received more than $45 million in lobbying and public affairs work from four newly wealthy tribes in the past three years. Those fees rival what some of the biggest corporate interests in the country pay to influence public policy.
The fees and $2.9 million in federal political contributions Abramoff advised the tribes to make, two-thirds of it to Republicans, have led to battles in some tribes. Some tribe members question why their leaders approved such payments.
Abramoff also directed tribes to donate to several obscure foundations that appear to have no connection to Indian concerns, including a think tank in Rehoboth Beach, Del., set up by Scanlon.
The revelations led to Abramoff's ouster in March from Greenberg Traurig, the law firm where he led one of Washington's most successful lobbying groups. Greenberg Traurig said it acted after Abramoff "disclosed to the firm for the first time personal transactions and related conduct which are unacceptable to the firm."
Lawyers for Abramoff and Scanlon declined to comment this week on the investigations.
Congressional investigators learned in March that Scanlon or organizations he was associated with paid Abramoff $10 million, an arrangement that was not known to the tribes or to Greenberg Traurig. Abramoff, who must publicly disclose lobbying fees, urged the tribes to hire one of Scanlon's public relations firms, often for much higher amounts than Abramoff's firm was receiving. Those public relations fees did not have to be disclosed under federal lobbying rules.
In an interview earlier this year, Abramoff denied having any financial stake in Scanlon's business.
Federal law permitting Indian gambling requires that the proceeds be spent to benefit the tribe, but regulators in Washington do not normally become involved in monitoring the money that closely. "Nobody is tasked to see where all the dollars get spent," said Philip N. Hogen, chairman of the National Indian Gaming Commission.
Hogen declined to comment on the investigations of Abramoff and Scanlon. But he said federal agencies have formed a working group to more closely coordinate criminal investigations that have arisen out of Indian gambling over the past six months.
"This is really high on the priority list of tribal concerns," he said. "This is a cash cow in many circumstances, and tribes are concerned about protection of tribal assets."
Indian gambling, officials said, has grown from a $100 million-a-year industry in 1988 to a $16 billion industry today.
Ernst Weyand, an official in the FBI's Indian Country investigative unit, said his office is working closely with organized-crime investigators. Officials in various agencies said the new working group makes it easier for federal investigators to take on larger and more complex investigations.
One person who has been interviewed by the FBI in connection with the investigation of Abramoff and Scanlon said the areas of interest ranged from foreign lobbying clients to billing practices involving the tribes and whether there were efforts to illegally fix tribal elections. He also said the FBI is looking at the relationship Abramoff and Scanlon and their firms had with some members of Congress.
Standing on the Shoulders of Perjury Law
By Richard B. Schmitt
Los Angeles Times
Monday 15 August 2005
Washington - When Al Qaeda operative Wadih El-Hage blamed false testimony he had given to a federal grand jury on confusion and jet lag, then-assistant US Atty. Patrick J. Fitzgerald was not impressed. "I submit to you," Fitzgerald told jurors at El-Hage's 2001 trial in New York, "you heard 10 of the most pathetic excuses of perjury ever known."
El-Hage, once Osama bin Laden's personal secretary, is serving life in prison without the possibility of parole - convicted of perjury, among other things.
Things tend to work out that way when Patrick J. Fitzgerald is prosecuting a case.
Fitzgerald, 44, has a history of invoking perjury laws and related statutes to buttress his investigations.
So it may not be surprising that he is considering perjury charges in his current assignment - as a special prosecutor investigating whether anyone in the Bush administration illegally leaked the name of CIA operative Valerie Plame to journalists.
Plame's identity was first disclosed by syndicated newspaper columnist Robert Novak in what was widely seen as an attempt to discredit her husband, former diplomat Joseph C. Wilson IV, for criticizing President Bush's rationale for attacking Iraq.
Fitzgerald's 20-month-long investigation initially focused on whether administration officials had broken a federal law that made it a felony to knowingly disclose the identity of covert agents. But more recently, the inquiry is believed to have shifted to the question of whether officials - including White House Deputy Chief of Staff Karl Rove - who discussed Plame with journalists may have misled Fitzgerald and his investigators.
Fitzgerald's tendency to invoke the laws against lying comes from two things, colleagues say: the particular way he uses grand jury testimony when he conducts an investigation, and his deep-seated aversion to being lied to.
Many prosecutors go before a grand jury only after they have a case pretty well wrapped up. But Fitzgerald's approach is to use the grand jury as a tool for compelling witnesses to disclose information. And if he thinks a witness has fiddled with the truth, associates say, he becomes indignant.
"He is an aggressive prosecutor," said Joshua Dratel, a New York lawyer who represented El-Hage. "If he feels someone is lying to him, he takes it personally."
Perjury charges can buttress an overall prosecution. They also enable prosecutors to bring charges against people when it may be difficult or impossible to prove them guilty of what are seen as their underlying crimes.
The perjury rap was "like using tax prosecutions for Al Capone," said Matthew Piers, a Chicago lawyer who represented a defendant Fitzgerald prosecuted for perjury after an investigation into possible terrorism.
Those considerations may come into play in the Plame case.
A lawyer for Rove has said that his client testified truthfully and that there is no reason to believe prosecutors think otherwise.
But a year ago, Rove publicly denied that he knew who Plame was - although recent revelations about his grand jury testimony indicated he did have that information.
Questions also exist about vice presidential aide I. Lewis "Scooter" Libby. He has indicated that he did not know Plame's identity until he heard it from journalists, but one of Libby's suspected sources, reporter Tim Russert of NBC, has denied giving it to him. Libby's lawyer has declined to comment.
Fitzgerald has used perjury indictments in several terrorism cases.
El-Hage was found guilty of lying to protect Al Qaeda members and operations in connection with plots to kill Americans around the world.
And a suspected Al Qaeda sympathizer, Mustafa Elnore, was sent to prison on similar grounds. Elnore had been caught up in the investigation of the first World Trade Center bombing in 1993.
But by the time prosecutors obtained his testimony before a federal grand jury, the statute of limitations on the underlying charges was expiring.
Fitzgerald charged him with perjury, and Elnore ended up being sentenced to nearly six years in prison, even though the government had no firm evidence that he was directly involved in the plot.
Perjury prosecutions in federal court are fairly rare - and somewhat controversial. Defense lawyers say they are used in cases to manufacture crimes where the government has no evidence to support more substantive charges.
The idea of a "perjury trap," where prosecutors ask questions of witnesses knowing they will lie, and without genuinely seeking evidence, is recognized as a defense to perjury charges by some courts, said Stuart Green, a professor at Louisiana State University law school. But in general, abuses are hard to prove, he said, because prosecutors can nearly always establish that they had a legitimate motive in asking their questions.
Fitzgerald has overseen myriad perjury prosecutions in Chicago, where he is the US attorney.
His office went after one federal prisoner for lying about helping another inmate escape, and ended up getting 20 years tacked onto his sentence.
Robert Burke had sold a handcuff key to the prisoner, who used it to unlock his handcuffs as marshals were leading him from court during his bank robbery trial. The prisoner grabbed a gun from one of the guards and killed two law enforcement officers before taking his own life.
Burke was convicted of perjury, but his sentence was enhanced because the judge found that he should have foreseen the slayings.
"It is a pretty startling concept that someone can get convicted of perjury and end up being sentenced effectively for a murder," said Thomas A. Durkin, Burke's lawyer. "That's exactly what happened here." An appeal is pending.
Fitzgerald's spokesman, Randy Sanborn, declined to comment for this article.
Fitzgerald is an unusually aggressive and exhaustively thorough investigator. Because he is so deeply involved in his investigations, he also knows firsthand the damage that lying witnesses can cause, former associates said.
Although some prosecutors use grand juries to rubber stamp charges based on testimony from government witnesses, such as FBI agents, Fitzgerald views the grand jury process as a wide-ranging search for facts, an effect of which is to reveal people who have been less than truthful. The Plame investigation has involved dozens of witnesses.
"Pat definitely uses it as an inquisitorial body," said Joshua Berman, a former federal prosecutor who worked with Fitzgerald in New York and who is a partner with the law firm of Sonnenschein, Nath and Rosenthal in Washington. "He uses the grand jury as an apparatus to seek the truth. When people are not truthful ... he believes those people should be punished."
Andrew McCarthy, another former federal prosecutor who has worked with Fitzgerald, said: "He knows the energy you expend from trying to get from point A to point B to point C. And when somebody lies and that throws your trail off a million miles from where it ought to be ... the lie is a lot more consequential."
By Richard B. Schmitt
Los Angeles Times
Monday 15 August 2005
Washington - When Al Qaeda operative Wadih El-Hage blamed false testimony he had given to a federal grand jury on confusion and jet lag, then-assistant US Atty. Patrick J. Fitzgerald was not impressed. "I submit to you," Fitzgerald told jurors at El-Hage's 2001 trial in New York, "you heard 10 of the most pathetic excuses of perjury ever known."
El-Hage, once Osama bin Laden's personal secretary, is serving life in prison without the possibility of parole - convicted of perjury, among other things.
Things tend to work out that way when Patrick J. Fitzgerald is prosecuting a case.
Fitzgerald, 44, has a history of invoking perjury laws and related statutes to buttress his investigations.
So it may not be surprising that he is considering perjury charges in his current assignment - as a special prosecutor investigating whether anyone in the Bush administration illegally leaked the name of CIA operative Valerie Plame to journalists.
Plame's identity was first disclosed by syndicated newspaper columnist Robert Novak in what was widely seen as an attempt to discredit her husband, former diplomat Joseph C. Wilson IV, for criticizing President Bush's rationale for attacking Iraq.
Fitzgerald's 20-month-long investigation initially focused on whether administration officials had broken a federal law that made it a felony to knowingly disclose the identity of covert agents. But more recently, the inquiry is believed to have shifted to the question of whether officials - including White House Deputy Chief of Staff Karl Rove - who discussed Plame with journalists may have misled Fitzgerald and his investigators.
Fitzgerald's tendency to invoke the laws against lying comes from two things, colleagues say: the particular way he uses grand jury testimony when he conducts an investigation, and his deep-seated aversion to being lied to.
Many prosecutors go before a grand jury only after they have a case pretty well wrapped up. But Fitzgerald's approach is to use the grand jury as a tool for compelling witnesses to disclose information. And if he thinks a witness has fiddled with the truth, associates say, he becomes indignant.
"He is an aggressive prosecutor," said Joshua Dratel, a New York lawyer who represented El-Hage. "If he feels someone is lying to him, he takes it personally."
Perjury charges can buttress an overall prosecution. They also enable prosecutors to bring charges against people when it may be difficult or impossible to prove them guilty of what are seen as their underlying crimes.
The perjury rap was "like using tax prosecutions for Al Capone," said Matthew Piers, a Chicago lawyer who represented a defendant Fitzgerald prosecuted for perjury after an investigation into possible terrorism.
Those considerations may come into play in the Plame case.
A lawyer for Rove has said that his client testified truthfully and that there is no reason to believe prosecutors think otherwise.
But a year ago, Rove publicly denied that he knew who Plame was - although recent revelations about his grand jury testimony indicated he did have that information.
Questions also exist about vice presidential aide I. Lewis "Scooter" Libby. He has indicated that he did not know Plame's identity until he heard it from journalists, but one of Libby's suspected sources, reporter Tim Russert of NBC, has denied giving it to him. Libby's lawyer has declined to comment.
Fitzgerald has used perjury indictments in several terrorism cases.
El-Hage was found guilty of lying to protect Al Qaeda members and operations in connection with plots to kill Americans around the world.
And a suspected Al Qaeda sympathizer, Mustafa Elnore, was sent to prison on similar grounds. Elnore had been caught up in the investigation of the first World Trade Center bombing in 1993.
But by the time prosecutors obtained his testimony before a federal grand jury, the statute of limitations on the underlying charges was expiring.
Fitzgerald charged him with perjury, and Elnore ended up being sentenced to nearly six years in prison, even though the government had no firm evidence that he was directly involved in the plot.
Perjury prosecutions in federal court are fairly rare - and somewhat controversial. Defense lawyers say they are used in cases to manufacture crimes where the government has no evidence to support more substantive charges.
The idea of a "perjury trap," where prosecutors ask questions of witnesses knowing they will lie, and without genuinely seeking evidence, is recognized as a defense to perjury charges by some courts, said Stuart Green, a professor at Louisiana State University law school. But in general, abuses are hard to prove, he said, because prosecutors can nearly always establish that they had a legitimate motive in asking their questions.
Fitzgerald has overseen myriad perjury prosecutions in Chicago, where he is the US attorney.
His office went after one federal prisoner for lying about helping another inmate escape, and ended up getting 20 years tacked onto his sentence.
Robert Burke had sold a handcuff key to the prisoner, who used it to unlock his handcuffs as marshals were leading him from court during his bank robbery trial. The prisoner grabbed a gun from one of the guards and killed two law enforcement officers before taking his own life.
Burke was convicted of perjury, but his sentence was enhanced because the judge found that he should have foreseen the slayings.
"It is a pretty startling concept that someone can get convicted of perjury and end up being sentenced effectively for a murder," said Thomas A. Durkin, Burke's lawyer. "That's exactly what happened here." An appeal is pending.
Fitzgerald's spokesman, Randy Sanborn, declined to comment for this article.
Fitzgerald is an unusually aggressive and exhaustively thorough investigator. Because he is so deeply involved in his investigations, he also knows firsthand the damage that lying witnesses can cause, former associates said.
Although some prosecutors use grand juries to rubber stamp charges based on testimony from government witnesses, such as FBI agents, Fitzgerald views the grand jury process as a wide-ranging search for facts, an effect of which is to reveal people who have been less than truthful. The Plame investigation has involved dozens of witnesses.
"Pat definitely uses it as an inquisitorial body," said Joshua Berman, a former federal prosecutor who worked with Fitzgerald in New York and who is a partner with the law firm of Sonnenschein, Nath and Rosenthal in Washington. "He uses the grand jury as an apparatus to seek the truth. When people are not truthful ... he believes those people should be punished."
Andrew McCarthy, another former federal prosecutor who has worked with Fitzgerald, said: "He knows the energy you expend from trying to get from point A to point B to point C. And when somebody lies and that throws your trail off a million miles from where it ought to be ... the lie is a lot more consequential."
For more information:
http://www.truthout.org/docs_2005/081605Y....
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