Tom Delay

Turncoats in Bermuda shorts

Offshore tax havens continue to bilk America -- even as their supporters drape themselves in the flag.

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As President Bush’s vaunted “coalition of the willing” continues to shrivel — who’s left, Bulgaria, Latvia and Tony Blair? — the coalition of those Americans willing to challenge his obsession with invading Iraq continues to grow.

Galvanized by this growing army for peace, many of the leaders of the antiwar movement are now searching for ways to build on the renewed commitment to dissent and direct the newly mobilized energy toward protesting the president’s equally misguided policies here at home.

And no issue is more emblematic of this administration’s perverted domestic priorities than its scandalous refusal, in a time of soaring deficits, to stop corporations and wealthy individuals from cheating the public out of billions of dollars a year by either reincorporating offshore or simply hiding their profits in offshore subsidiaries. While our young men and women are ready to lay down their lives on the sands of Iraq, these companies are allowed to avoid paying their fair share by hightailing it to the sands of Bermuda.

“We get e-mails all the time,” Wes Boyd, cofounder of MoveOn.org, told me, “from MoveOn members who rightly worry about the special interests lining up at the trough while we’re not looking. And they’re very ready to take them on. Nothing makes people angrier than the sense that some morality-impaired businesses are buying favors from Congress and the White House, while the rest of us are being asked to sacrifice.”

Boyd’s group has been at the heart of the antiwar movement. With more than 1.2 million members, MoveOn.org has become the Internet hub for political activists all across the country. It was responsible for, among many other things, the hugely successful “virtual march” on Washington, a lot of the newspaper and TV antiwar advertising, and a petition with a million signatures collected within five days and delivered to the U.N. Security Council.

“Offshore tax havens,” says Boyd, “are the financial equivalent of desertion under fire. And these corporate deserters are protected by politicians in Washington ostensibly elected to serve the public interest. This really gets people steamed.”

This accounting sleight-of-hand is no small matter: It’s depriving the U.S. Treasury of around $70 billion a year. Even more galling, these companies are being rewarded for ripping off taxpayers with massive federal contracts. Scandal-tainted Tyco, for instance, pocketed $1 billion in public money in 2001 while evading $400 million in taxes by opening up a P.O. box in sunny Bermuda.

And it’s not like we can’t use the money.

In Oregon, dead-broke public schools are being forced to shut down a month early; in Illinois, child care for welfare families is being cut in half; and nationwide, over a million poor Americans are facing the loss of their publicly funded medical benefits. Even the president’s signature No Child Left Behind Act has been slashed — his new budget allocates it $6.2 billion less than was originally called for, transforming it into the “A Few Million Children But Hopefully Not Yours Left Behind Act.”

Every populist movement needs a catalytic issue and a crystallizing response that come to symbolize the greater struggle at hand. Think of Rosa Parks refusing to move to the back of the bus or the Greensboro Four taking a seat at that whites-only Woolworth’s lunch counter.

The revolt against antipatriotic tax havens may be the spark that ignites a far-ranging movement for basic fairness and economic justice. What could be more unfair, after all, than asking hard-working Americans to dig deeper into their wallets, retirement funds and savings accounts so corporate execs wallowing in tax-free profits won’t have to?

It should be a political no-brainer, an issue that transcends right-left divisions. And, indeed, politicians from both parties — including Sens. Evan Bayh, Charles Grassley, Max Baucus, Harry Reid and Carl Levin, and Rep. Richard Neal — have introduced or are preparing to introduce legislation that would crack down on offshore tax evaders. Even President Bush is on record saying: “We ought to look at people who are trying to avoid U.S. taxes as a problem. American companies ought to pay taxes and be good citizens.” Yes, gee, they ought to. If only there was some public body that could, say, pass a law and force them to do it.

Yet for all the public posturing, behind closed doors our leaders continue to protect their corporate sponsors, allowing profits to trump patriotism — even in this time of war.

“I now have 120 co-sponsors for my bill,” Rep. Neal, author of the Corporate Patriot Enforcement Act, told me, “and I know that I would have at least 300 members supporting it if only we could bring it to the House floor for a vote. But the Republican leadership won’t even let it out of committee.”

The main roadblock to Neal’s bill is House Majority Leader Tom DeLay, a politician who never hesitates to drape himself in the flag, but who is now actively protecting companies and tycoons that are selling their countries short in a time of war.

Demanding that DeLay bring Neal’s bill to a vote would be a good first step for the anti-tax haven movement. It would take only one phone call from the president, which he’s, apparently, unwilling to make. So concerned citizens should do it for him and inundate DeLay’s office with phone calls, faxes and e-mails. And if that doesn’t work, then the same people who filled the streets of cities all across America to protest the war might want to see if they can squeeze into the majority leader’s office.

Meanwhile, in the Senate, Democrats should attach an anti-corporate tax cheat rider to every single piece of legislation and force Republicans to vote on it ad nauseam until the House leadership relents.

As for the White House, Bush, and especially Vice President Cheney — who was CEO when Halliburton increased its offshore subsidiaries from nine to 44 — are a lost cause. Their conversion will only come about at the deathbed of the tax shelters.

For a case study in how our leaders manage to get away with allowing the public interest to be shipped offshore, look no further than an amendment initially introduced by the late Sen. Paul Wellstone and now championed by his fellow Minnesotan Sen. Mark Dayton.

Twice the measure — a red, white and blue slam-dunk banning government contracts for corporate expatriates — was resoundingly approved in public. And twice the measure was gutted in the shadowy realm of behind-the-scenes conference committee negotiations.

The reason for this legislative skulduggery is obvious: No one wants to publicly defend the indefensible. Those daring to try risk looking as moronic as former congressman-turned-corporate-flack Bob Livingston did when claiming that his client, Accenture, didn’t move offshore to avoid taxes, but only because the company’s American and European partners couldn’t agree on where to set up shop. “So they picked a nice island, Bermuda,” asserted lobbyist Livingston while miraculously resisting the urge to burst out laughing.

Of course, this lame “we didn’t do it for the money” explanation is the same one the White House offered up last August when it came to light that companies connected to President Bush and Vice President Cheney had created shell companies in offshore tax havens. The truth is, when corporations move offshore, the biggest beneficiaries are almost always the companies’ CEOs, whose pay is tied to profits. Think of them as turncoat Robin Hoods in Bermuda shorts: They steal billions from the rest of us, then keep the lion’s share for themselves. Chew on that while you’re cutting the IRS that check next month.

Reeling from the most severe state fiscal crisis since the Great Depression — it’s a tossup whether 47 states will be able to balance their books next year — state officials across America are also taking up the anti-tax haven charge. North Carolina has already passed legislation banning government contracts for expatriated companies. Similar bills are currently pending in Massachusetts, Pennsylvania and California — where treasurer Phil Angelides is refusing to invest any of the state’s money in companies incorporated in tax havens.

Now it’s up to us.

With our national April 15 date with the taxman fast approaching, the time is ripe for a popular uprising that will hold our representatives accountable for their refusal to pull the plug on offshore tax cheats. We need to force them to come out of the shadows and go on record one way or another. As the president likes to say about the U.N., “It’s time for people to show their cards, let the world know where they stand.”

Let’s have a straight up or down vote: Are you in favor of allowing corporations to continue bilking American taxpayers — even while we are facing severe budget cuts and our soldiers are ready to make the ultimate sacrifice in Iraq?

To paraphrase a certain wartime president: When it comes to everyone paying his fair share, you’re either with us or you’re against us.

Arianna Huffington is a nationally syndicated columnist, the co-host of the National Public Radio program "Left, Right, and Center," and the author of 10 books. Her latest is "Fanatics and Fools: The Game Plan for Winning Back America."

John Edwards’ creepy mug shot

The disgraced senator flashes an unnerving grin -- just like Tom DeLay

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John Edwards' creepy mug shotEdwards sports a cold, dead smile in his mugshot

If the pictures of Anthony Weiner and (allegedly) a sunbathing Newt Gingrich weren’t too much for you, here’s another unsettling image: CNN’s Ed Hornick has posted John Edwards’ mug shot. Edwards, who faces felony charges for allegedly using over $1 million of campaign cash to hide his extramarital affair and child, went for the unnerving smile with accompanying cold, dead eyes for his photo:

The image is reminiscent of Tom DeLay from the Republican former House majority leader’s mug shot. (DeLay was ultimately convicted on conspiracy and money-laundering charges.)

We wonder whether the smiles here are meant to convey confidence or an image of innocence. If so, neither man succeeded.

Natasha Lennard covers the Occupy movement for Salon. A British-born, Brooklyn-based journalist, she has been covering Occupy Wall Street since before the first sleeping bag was unrolled in Zuccotti Park. One of the first journalists arrested at an Occupy action, she has managed to enrage Andrew Breitbart, Rush Limbaugh and Glenn Beck. You can follow her on Twitter (@natashalennard), and email her any Occupy updates/videos/ideas to natasha.lennard@gmail.com

Meet Patrick McHenry, the rudest, most shameless College Republican in Congress

Of course he was unfair to Elizabeth Warren: He was trained by the most cutthroat political organization around

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Meet Patrick McHenry, the rudest, most shameless College Republican in CongressPatrick McHenry

Rep. Patrick McHenry (R-Countrywide) called Elizabeth Warren a liar at the conclusion of a House Oversight subcommittee hearing that had already consisted mainly of Republican members of Congress getting very basic information about Warren’s Consumer Financial Protection Bureau completely wrong.

McHenry has been one of the most completely shameless of House Republicans since his arrival in Congress, in 2005, when he immediately and publicly endorsed Tom DeLay’s brilliant plan to exempt himself from ethics rules as his connections to Jack Abramoff began to end his career. But he was born to be cheerfully corrupt: He’s a product of the College Republicans, an organization that trains little Lee Atwaters, Karl Roves and Grover Norquists in the arts of scorched-earth campaigning and wholly irresponsible “governing” on behalf of the monied interests that bought you your job. The ethos is win by any means necessary, legal or quasi-legal (or worse, as long as you never get caught), and McHenry was very good at that, according to Benjamin Wallace-Wells’ memorable profile of the then-freshman in the Washington Monthly.

After the College Republicans, and a failed state legislature race, McHenry moved on to truly insidious conservative astroturfing/push-polling/communications firm DCI, then worked for Rove, then took a political appointment in the Bush administration, then moved to the district he now represents, where he started a real estate company that did not actually buy or sell any real estate, so that he could run for Congress as “a small businessman.”

Once in the United States House of Representatives, McHenry personally intervened in a wild and bloody College Republican National Committee chair election, on behalf of a personal friend of his who’d become slightly toxic after he sent fundraising letters attempting to trick “elderly people with dementia” into donating to the CRNC. And he was successful! The horrible kid won, against all odds:

In other phone calls, McHenry was more blunt: “He told me, and several of my friends that we were done in politics if we didn’t support him,” another College Republican chapter president told me. (McHenry has admitted that he and Deans made the calls but denied that they threatened anyone’s career). Over the course of two weeks, after a couple of a dozen calls, McHenry prevailed upon those in the North Carolina delegation to change their votes, removing three votes from Davidson’s column and putting them in Gourley’s. Gourley ended up winning by six votes; had North Carolina voted the other way, Davidson might have won.

Another of McHenry’s first acts in Congress, Wallace-Wells writes, was to champion a bill that was specifically written to rip off a large portion of his constituents, by making it “much harder for government to regulate or block the conversion of credit unions into banks …” He is a close ally of major consumer financial institutions with a plum assignment to the Committee on Financial Services, which is great for raising money.

It’s only natural that Elizabeth Warren, whose mission is to protect consumers from unethical and predatory practices by these institutions, is Patrick McHenry’s enemy. You can complain on his Facebook wall all you like, but the Republican from North Carolina is incapable of feeling embarrassment.

And his treatment of Warren will only make him a bigger conservative hero and an even more attractive investment opportunity for major banks.

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Alex Pareene

Alex Pareene writes about politics for Salon and is the author of "The Rude Guide to Mitt." Email him at apareene@salon.com and follow him on Twitter @pareene

The end of Tom DeLay

And why he'll probably never spend a day in prison

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The end of Tom DeLayTom Delay

On Monday, Tom DeLay was sentenced to three years in prison on two felony charges, conspiracy and money laundering, in a campaign finance corruption case that had dragged on for years.

The sentencing of DeLay, once one of the most powerful Republicans in Washington and the majority leader of the House of Representatives, was largely ignored because of the aftermath of the mass shooting in Arizona.

But it’s an extraordinary story — and one that’s not quite over. When he was indicted in Texas in 2005, DeLay’s political career sustained a fatal blow. He was forced to step down from his House leadership position and, in 2006, he resigned from Congress. 

The charges arose after DeLay set up a PAC to funnel corporate money, which is barred in Texas elections, to candidates for the state legislature. The group raised $190,000 and funneled it through the national Republican Party, which then distributed the money to several state-level candidates in Texas.

To learn more about the case that brought DeLay down, I spoke with Lou Dubose, who co-authored “The Hammer,” a biography of DeLay. The former editor of the Texas Observer and the current editor of the Washington Spectator newsletter, Dubose covered the trial gavel to gavel in Austin. He was in the courtroom on Monday when DeLay gave a lengthy presentencing speech accusing prosecutors of having political motivations and claiming he had $10 million in legal bills. 

I asked Dubose whether DeLay, who is planning an appeal, will ever see the inside of a jail cell, and whether the former majority leader appears humbled by the ordeal of the trial.  The conversation has been edited for length and clarity.

Did you ever think that you would see this happen?

I really didn’t. This was a working class jury, and I think that made a huge difference.

What was the dynamic with the jury — why did that make a difference?

Gary Cobb, the assistant DA who tried the case, really dragged out the $50,000 checks and the flights on corporate jets with the same persons who had written the checks to DeLay’s PAC. The sort of life that Tom DeLay lived at the expense of the corporate lobby — I think that really made an impact. By their clothes and what we know about them, it was a real working-class jury.

Oddly enough, Tom DeLay spent the entire duration of the three-week trial in a motor home rather than the Four Seasons. He drove his motor coach over here and checked into a motor home park in south Austin, a long way from where he was playing golf at Saint Andrews in Scotland. Then there was also the fact of the way the DeLays dressed, the fact that Reverend Rick Scarborough was sitting behind them. There was a lot of bling there that these people on the jury didn’t have.

Was it possible to tell where the $190,000 ended up? Did it just go to the state GOP?

The money came back, and it went to the candidates in Texas for whom it was designated. The backstory, of course, is that the Republicans controlled everything in Texas but the statehouse. Therefore they could not control redistricting. So DeLay set this organization up in 2001 for the 2002 election and they had to win a majority in the house. They moved this $190,000 up to D.C. because they were specifically raising corporate money, which was easier to raise. They sent it to Washington with specific instructions to send it back to these designated candidates. The candidates got the checks in the exact amount of $190,000.

And DeLay personally raised the money?

Well, that was the question. He stayed in the background but the state proved that he was aware that that transaction had happened. He was probably involved in directing it, although they didn’t have direct testimony on that. They put the three men who did the money-laundering in a room together in Sugar Land, Texas, in DeLay’s district, before the transaction was made.

Remarkably, at one point in the trial, DeLay went out and talked to Laylan Copelin of the Austin American-Statesman, who is a really terrific reporter. And Laylan asked him if he could have stopped the transaction. And DeLay said, “I could have stopped it, but why would I?”

And that was used in the trial?

In the middle of the trial, the state called Laylan Copelin as a witness — really bizarre. He’d been sitting there most of the trial; two weeks into the trial they call him as a witness because of what DeLay had said. His story ran, and two days later he was on the stand testifying as to what he had been told.

So I think DeLay proved to be a terrible client for a storied criminal defense attorney, Dick DeGuerin. That said, the state did an incredible job putting on a case that had to be by nature largely circumstantial.

Do you think he will ever spend a day in jail?

No. Simply because the Court of Criminal Appeals is an elected court, it’s all Republican, it’s highly political. It’s known as a prosecutors’ court, but in this case I would bet that they’re going to rule for the defendant. The Third Court of Appeals, where the appeal will start, is also a Republican court.

What are the issues in the appeal?

These courts are going to have to find a creative way of setting Tom DeLay free. One argument that they once made that they might try to revive is that money-laundering didn’t apply to checks, it applied to cash. This involved checks. The problem with that at the appellate level is that there have been a number of convictions based on money laundering with checks. So are you going to overturn all these prior convictions in order to save Tom DeLay?

What is DeLay doing these days?

You know, nothing. He is struggling to remain relevant. DeLay was always the star at CPAC, the annual conservative conference in Washington. But he hasn’t been allowed to speak there. Two years ago at CPAC, he was trolling for interviews. At the last CPAC convention, he was shunned.

He’s become a pariah to the Republican Party, and I don’t quite understand why. The true believers hold him responsible, rightly, for the Bush Medicare prescription drug bill, which DeLay pushed through. But he’s of no use to them anymore, and he’s not wanted. So most of what he does is struggle to remain relevant, and he’s not. Dick DeGuerin, in his closing argument, said “This prosecution has rendered my client unemployable.” And to my knowledge, he’s not employed.

His media statements have been defiant, but has he changed?

I don’t think so. That’s what’s remarkable. This is the same Tom DeLay that I saw every day for a year and a half when I followed him in Washington. It seemed to me that it never occurred to him that he no longer had the power that he once exercised. He had no regrets — he’s the same guy, except that he’s driving in a motor home instead of sleeping in the Four Seasons.

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Justin Elliott

Justin Elliott is a reporter for ProPublica. You can follow him on Twitter @ElliottJustin

Tom DeLay sentenced to 3 years in prison

Former U.S. House majority leader was convicted of money laundering and conspiracy

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Tom DeLay sentenced to 3 years in prisonFILE - In this Oct. 26, 2010 file photo, former House Majority Leader Tom DeLay arrives at the Travis County courthouse in Austin, Texas, for jury selection in his corruption trial. Delay will be back in court on Monday, Jan. 10. 2011, for the sentencing phase of his trial after his Nov. 24 conviction on charges of money laundering and conspiracy to commit money laundering in a scheme to illegally funnel corporate money to Texas candidates in 2002. (AP Photo/Jack Plunkett, File)(Credit: AP)

A judge has ordered U.S. House Majority Leader Tom DeLay to serve three years in prison for his role in a scheme to illegally funnel corporate money to Texas candidates in 2002.

The sentence comes after a jury in November convicted DeLay on charges of money laundering and conspiracy to commit money laundering. DeLay was once one of the most powerful men in U.S. politics, ascending to the No. 2 job in the House of Representatives.

The former Houston-area congressman had faced up to life in prison. His attorneys asked for probation.

Senior Judge Pat Priest issued his ruling after a brief sentencing hearing on Monday in which former U.S. House Speaker Dennis Hastert testified on DeLay’s behalf.

Priest declined to hear testimony from the state’s only witness.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

Jury convicts Tom DeLay in money-laundering trial

DeLay maintains his innocence and plans to appeal the verdict it took 19 hours to reach

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Former U.S. House Majority Leader Tom DeLay — once one of the most powerful and feared Republicans in Congress — was convicted Wednesday on charges he illegally funneled corporate money to Texas candidates in 2002.

Jurors deliberated for 19 hours before returning guilty verdicts against DeLay on charges of money laundering and conspiracy to commit money laundering. He faces up to life in prison on the money laundering charge.

After the verdicts were read, DeLay hugged his daughter, Danielle, and his wife, Christine. His lead attorney, Dick DeGuerin, said they planned to appeal the verdict.

“This is an abuse of power. It’s a miscarriage of justice, and I still maintain that I am innocent. The criminalization of politics undermines our very system and I’m very disappointed in the outcome,” DeLay told reporters outside the courtroom. He remains free on bond, and his sentencing was tentatively set to begin on Dec. 20.

Prosecutors said DeLay, who once held the No. 2 job in the House of Representatives and whose heavy-handed style earned him the nickname “the Hammer,” used his political action committee to illegally channel $190,000 in corporate donations into 2002 Texas legislative races through a money swap.

DeLay and his attorneys maintained the former Houston-area congressman did nothing wrong as no corporate funds went to Texas candidates and the money swap was legal.

The verdict came after a three-week trial in which prosecutors presented more than 30 witnesses and volumes of e-mails and other documents. DeLay’s attorneys presented five witnesses.

Prosecutors said DeLay conspired with two associates, John Colyandro and Jim Ellis, to use his Texas-based PAC to send $190,000 in corporate money to an arm of the Washington-based Republican National Committee, or RNC. The RNC then sent the same amount to seven Texas House candidates. Under Texas law, corporate money can’t go directly to political campaigns.

Prosecutors claim the money helped Republicans take control of the Texas House. That enabled the GOP majority to push through a Delay-engineered congressional redistricting plan that sent more Texas Republicans to Congress in 2004 — and strengthened DeLay’s political power.

DeLay’s attorneys argued the money swap resulted in the seven candidates getting donations from individuals, which they could legally use in Texas.

They also said DeLay only lent his name to the PAC and had little involvement in how it was run. Prosecutors, who presented mostly circumstantial evidence, didn’t prove he committed a crime, they said.

DeLay has chosen to have Senior Judge Pat Priest sentence him. He faces five years to life in prison on the money laundering charge and two to 20 years on the conspiracy charge. He also would be eligible for probation.

The 2005 criminal charges in Texas, as well as a separate federal investigation of DeLay’s ties to disgraced former lobbyist Jack Abramoff, ended his 22-year political career representing suburban Houston. The Justice Department probe into DeLay’s ties to Abramoff ended without any charges filed against DeLay.

Ellis and Colyandro, who face lesser charges, will be tried later.

Except for a 2009 appearance on ABC’s hit television show “Dancing With the Stars,” DeLay has been out of the spotlight since resigning from Congress in 2006. He now runs a consulting firm based in the Houston suburb of Sugar Land.

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