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Tuesday, Oct 7, 2008
Tom DeLay -- a former pest killer who has turned his ire on Democrats -- has helped build a huge Republican money juggernaut. But did his engineering of a Texas GOP landslide break the law?
Sep 3, 2003 | In May 2002, Westar Energy sent a $25,000 check to Texans for a Republican Majority, an organization set up to propel Republicans into the Texas state government. What did the Kansas-based Westar care about Texas Republicans? Probably not much. But it did want to curry favor with the political group's founder, Rep. Tom DeLay, R-Texas, the House majority leader.
DeLay's "agreement is necessary," one Westar executive helpfully explained in a memo, according to documents released by the company's board, "before the House conferees can push the language we have in place in the House bill."
DeLay took Westar's money, invited its top brass to a golf gala shortly thereafter, and supported Westar's language for a lucrative special exemption in the House energy bill. That exemption was ultimately dropped when those in Congress learned of a federal fraud investigation into the company. The bad news for Westar still meant money in the bank for DeLay, and he used the donation, along with many others to Texans for a Republican Majority, to construct the GOP juggernaut that commandeered Texas' elections. Juiced by DeLay's cash -- Texans for a Republican Majority spent about $1.5 million in the 2002 elections -- and organizational prowess, Texas Republicans smothered the opposition. Eighteen out of the 22 Texas House candidates supported by the PAC were victorious, contributing heavily to the GOP's comfortable 88-62 majority in Austin. Once in power, the Texas GOP -- at DeLay's urging -- swiftly got to work trying to gerrymander congressional districts in the Republicans' favor, even though the districts had just been redrawn two years earlier, based on the most recent census. As that spectacle stands now, 11 Democratic legislators are sequestered in a New Mexico hotel, preventing a quorum on a vote they would surely lose, as the Democratic Party sues to prevent the redistricting, calling it a violation of the U.S. Voting Rights Act.
Politically, it was a stunning success for Tom DeLay, perhaps best known as Congress' most aggressive and outspoken conservative, who steamrolls over anyone who stands in the way of his agenda. What is less well known is that DeLay is also a master of the sometimes dark art of political fundraising. His skill at raising money has helped the GOP maintain its dominance in Congress and has made him perhaps the most feared Texas politician since Lyndon Johnson. But in the 2002 Texas coup, he left behind a muddy trail: A close scrutiny of the money he funneled into the state suggests DeLay may have violated several state laws along the way.
Texas law strictly prohibits campaigns from using corporate donations, and clearly much of Texans for a Republican Majority's money, such as Westar's $25,000, came from corporate sources. Jim Ellis, the group's former director, defends using the corporate money by saying the state rules apply only to organizations directly controlled by labor unions or corporations (a highly disputed reading that, if true, would nullify the point of the law) and that every other similar group in Texas does the same thing -- an "everybody does it" excuse that sounds suspiciously like an admission of guilt. Most important, Ellis notes that the organization is split into two groups, a political action committee and a special tax-exempt political group designated a "527" by the IRS. The two organizations are separate, according to Ellis, because the 527 raised corporate money and the PAC raised money only from individuals and distributed that to candidates.
But according to IRS filings, the 527 clearly used its corporate money to organize polls and pay for political consultants, and even Ellis admits that the PAC used those services. Ellis claims this work was merely an allowed "administrative" cost -- an expansive reading, given that the Texas Ethics Commission defines "administrative" as "expenses that would be incurred in the normal course of business by any active organization." Karen Lundquist, executive director of the Texas Ethics Commission, says, "Consulting for the purpose of setting a political strategy is not administrative." More bluntly, Fred Lewis of the nonpartisan Texas watchdog group Campaigns for People, says, "They are saying a cat is a dog."
Just as interesting: On Sept. 20, 2002, the 527 arm of Texans for a Republican Majority sent a check for $190,000 to the Republican National Committee's state arm (RNSEC). That was legal. But exactly two weeks later, on Oct. 4, the RNSEC sent out precisely $190,000 divvied up among seven candidates supported by Texans for Republican Majority, and all received money from it or DeLay's national PAC, Americans for a Republican Majority, at different points, according to filings with the Texas Ethics Commission. This raises the question of whether TRM, which couldn't give the money directly to candidates, simply passed the money to the RNSEC. That would certainly be circumventing the law, if not breaking it.
"It comes down to a question of proof," says Larry Noble, executive director of the Center for Responsive Politics, noting that the legality of such a transaction depends on whether TRM and the RNC had an explicit or even implicit agreement about how the money would be distributed. Noble adds that such a transaction could well be "a way to launder the money and evade the contribution limits." Ellis denies any connection between the funds. "We gave $190,000 to the RNC. End of story," he says. "I think the RNC, with their full staff of lawyers, is well equipped to comply with the laws."
In the middle of this mess sat Tom DeLay, who simply expressed disbelief that anyone would question his actions. "It never ceases to amaze me that people are so cynical they want to tie money to issues, money to bills, money to amendments," he declared at a press conference in late June.
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