The K Street Project will have problems in the future stemming from the indictment of Tom DeLay and others in the Bush/lobbyist group (See "Abramoff" and other articles below). SourceWatch has the information on What The K Street Project is and who is part of it. How this entity protects the public interest is up to you to decide. The future of lobbying as we know it may be at stake.

The K Street Project is a project by the Republican party to pressure Washington lobbying firms to hire Republicans in top positions, and to reward loyal GOP lobbyists with access to influential officials. It was launched in 1995, by Republican strategist Grover Norquist and House majority leader Tom DeLay.

K Street in Washington DC is where the big lobbying firms have their headquarters and is sometimes refered to as the fourth branch of government. Lobbying firms have great influence in U.S. national politics due to monetary resources and the revolving door policy of hiring former government officials. It is common practice for politicians to request money for lobbying firms for an exchange in better access to officials and to buy favoritism in policies.

Historically, K Street hires top ex-politicians from both major parties since party in power can vary between elections and among the legislative and executive branches in government.

During most of the George W. Bush administration, the Republican party had majority control of both houses of Congress, in addition to control of the White House. Thomas D. DeLay of the House, Rick Santorum of the Senate, and Grover Norquist took this opportunity to expand the K Street Project by pressuring major lobbying firms to hire only Republicans in any new or open positions.

But in June 2004, the Washington Post reported that the power of the K Street Project might be waning. "According to a review of job listings in Influence.biz, a lobbying newsletter, more than 40 percent of lobbyists with identifiable party backgrounds hired in the past six months have been Democrats. During the same period a year earlier, Democrats constituted only 30 percent of those hired."[1] (http://www.washingtonpost.com/wp-dyn/articles/A21972-2004Jul1.html)

With "Sen. John F. Kerry (D-Mass.) running neck and neck with President Bush in most polls and with the outlook for the Senate a tossup, a wide range of interest groups are filling some of their lobbying and public relations openings with Democrats -- just in case the center of influence switches. 'There is some bet-hedging going on that wasn't going on a year and a half ago,' said Thomas Hale Boggs Jr. of Patton Boggs LLP, one of Washington's largest lobbying-law firms."[2] (http://www.washingtonpost.com/wp-dyn/articles/A21972-2004Jul1_3.html)

In September 2004, The Hill reported the opposite K Street hiring trend: "Retiring House Democrats are feeling a cold draft from K Street as they seek post-congressional employment at lobbying firms, trade groups and corporations. By contrast, K Street is aggressively courting GOP lawmakers who have announced their retirements, suggesting that the business community is confident the GOP will retain the Speaker's gavel in January and that business wants to fortify its Republican Rolodexes."[3] (http://thehill.com/news/091504/kstreet.aspx)

Not everyone agreed with the conclusion that "the 'K Street Project' is alive and well"; "Democrats argue that the crop of retiring lawmakers seeking employment is not broad enough to discern a pattern or divine the intentions of K Street." Retiring Republican Congresswoman Jennifer Dunn, who was interviewing with 15 firms, said K Street's current GOP bias is needed to balance a long period of Democratic bias, when the Dems enjoyed House majority party status for 40 years. "K Street is still only 30 percent Republican, so there's a lot more work to do to make it even," said Dunn.[4] (http://thehill.com/news/091504/kstreet.aspx)

More on The K Street Project

DeLay Indicted in Texas Finance Probe
He Steps Aside as House GOP Leader to Fight Conspiracy Charge in State Elections
By R. Jeffrey Smith, washingtonpost.com, Thursday, September 29, 2005; A01

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A Texas grand jury indicted House Majority Leader Tom DeLay (R-Tex.) yesterday on a charge of criminally conspiring with two political associates to inject illegal corporate contributions into 2002 state elections that helped the Republican Party reorder the congressional map in Texas and cement its control of the House in Washington.

The indictment forced DeLay, one of the Republicans' most powerful leaders and fundraisers, to step aside under House rules barring such posts to those accused of criminal conduct. House Whip Roy Blunt (R-Mo.), the third-ranking leader, was elected by Republican House members yesterday afternoon to fill the spot temporarily after conservatives threatened a revolt against another candidate considered by House Speaker J. Dennis Hastert (R-Ill.).

Although the indictment had been rumored for weeks among top Republicans, based on what several described as a difficult meeting in August between DeLay and the Texas prosecutor behind the case, it shook the GOP political establishment and posed new problems for the party as it heads into the midterm elections next year.

DeLay bitterly denounced the charge as baseless and defiantly called the prosecutor, Ronnie Earle, "an unabashed partisan zealot" engaging in "personal revenge" because DeLay helped elect a Republican majority to the Texas House in 2002. "I have the facts, the law and the truth on my side," DeLay said, reading from a statement, before declining to answer questions.

But the indictment, which comes after three rebukes of DeLay in 2004 by the House ethics committee on unrelated matters, poses a major political problem for the 58-year-old Bush administration loyalist, 11-term congressman, and self-described champion of free enterprise and deregulation. DeLay is also likely to face an inquiry by the ethics committee into a series of foreign trips he took that were initially partly paid for by lobbyists.

The indictment specifically alleges that DeLay, who helped organize the Texas political committee at the heart of the charge, participated in a conspiracy to funnel corporate money into the 2002 state election "with the intent that a felony be committed."

Using corporate funds for state election purposes has long been illegal in Texas, as it is in 17 other states. Earle's probe of the contributions began after 17 Republicans who received the committee's funds were elected, giving the party control of the Texas House for the first time in 130 years. One year later, following a road map that DeLay and his political aides drafted from Washington, the Texas House approved a sweeping reorganization of the state's congressional district map meant to favor Republicans.

Then, in 2004, five more Texas Republicans were elected to Congress, enlarging the Republican majority in the House .

The facts of one of the central transactions at issue in the case have never been in dispute -- the transfer in September 2002 to an arm of the Republican National Committee in Washington of $190,000 in corporate funds collected by the committee in Texas and the subsequent donation by the RNC arm of $190,000 to seven Texas House candidates on Oct. 4, 2002.

Earle has long alleged that this transfer was intended to circumvent the Texas law. A copy of the relevant check from the Texas committee has been in his hands for more than a year, and he has repeatedly said the committee supplied the RNC with a list showing which Texas candidates should eventually be paid the funds.

Some evidence collected in a related civil case has pointed to heavy involvement by DeLay in the operations of the Texas committee. Its start-up was financed by a transfer of corporate funds from his leadership fund. He was a member of the Texas committee's advisory board in 2001 and 2002, participated in its strategizing, appeared at its fundraisers, and signed its solicitations. He also attended dinners with corporate donors that agreed to contribute tens of thousands of dollars to it; his fundraisers recorded the favors that donors sought.

But DeLay has long denied participating in its day-to-day operations and said that its activities were vetted by lawyers. As a result, the key question in Washington and Austin has been whether DeLay knew about the $190,000 transactions -- an allegation that lawyers say could be proved only by documentary evidence, such as an e-mail, or in grand jury testimony by one of those involved.

For DeLay to be guilty, he would have had to have both been informed of the transaction and approved the transaction, according to a source familiar with the details of case. David Berg, a Houston-based trial lawyer who wrote a best-selling legal textbook, said: "Politics in Texas is a real jungle, and money of this sort, I would suspect, gets washed all the time. [But] it would be illegal if [he] knew that corporate funds were going to be laundered and used in the state races. . . . I can't imagine somebody is not going to testify against [him]. Otherwise all Ronnie Earle can prove is that everything DeLay did is legal."

No evidence to support the conspiracy charge was cited in the indictment, which says only that DeLay and two named associates entered "into an agreement with one or more of each other" or with the committee to conduct the funds transfer. But Texas law permits such evidence to be left out of the indictment, so it is rarely included.

The others named in the indictment were James W. Ellis, who still runs DeLay's principal fundraising committee -- Americans for a Republican Majority -- and John D. Colyandro, the former director of the Texas offshoot. Both were previously charged with laundering money, an offense that can bring a 10-year prison term, and on Sept. 13 with conspiracy to accept illegal corporate donations.

The addition of DeLay to the conspiracy charge yesterday suggests that some crucial piece of information or testimony may have come into Earle's possession in recent weeks. The charge against DeLay carries a potential penalty of six months to two years in state jail, and a fine of as much as $100,000.

DeLay's attorney, Dick DeGuerin, said in the lobby of the Austin Criminal Justice Center that DeLay is so confident of his innocence that he will push for a swift trial. He said DeLay did not participate in a conspiracy and the $190,000 was spent "on proper things."

J.D. Pauerstein, an attorney for Ellis, said: "All of the indictments handed down in this case are frivolous and ridiculous. Our clients consulted election law experts, followed their advice and reported every contribution" to the Internal Revenue Service.

Colyandro, a veteran of White House Deputy Chief of Staff Karl Rove's direct-mail firm, has long denied wrongdoing but lost several court battles since the inquiry began to have the relevant Texas election law declared unconstitutional. His attorney in Austin, Joseph A. Turner, said that "this is really a rehash of previous indictments" and that the lengthy wait for it reflected the weakness of the prosecutor's case.

Regarding the $190,000 funds transfer from Texas to Washington and the return of the same amount from Washington to Texas, "Colyandro would say DeLay did not have any knowledge of that transaction in advance," Turner said.

The new indictment came after a 34-month inquiry and was issued on the final day the grand jury met. It caps a series of indictments that targeted eight corporations and an industry group, the Texas Association of Business, alleged to have worked with the Texas committee in collecting and disbursing illegal corporate contributions.

DeLay waived a requirement that the indictment be presented within three years of "the commission of the offense," the document states; DeGuerin said DeLay did this under duress so that he could put off an indictment weeks ago and keep trying to persuade Earle not to bring one.

Earle told reporters that he brought the indictment to defend the state's democratic system from undue corporate influence. "The law says the duty of a prosecutor is to make sure justice is done," Earle said, adding that the ban against corporate contributions "is intended to safeguard democracy and make the ballot box accessible to everybody, regardless of the amount of money involved."

But DeLay spokesman Kevin Madden said ill motives lie behind Earle's action: "They could not get Tom DeLay at the polls. They could not get Mr. DeLay on the House floor. Now they're trying to get him into the courtroom. This is not going to detract from the Republican agenda."

House Speaker Hastert, surrounded by other GOP leaders, said of DeLay: "He will fight this, and we will give him our utmost support." Blunt complained about "this terribly unfair thing that ha happened to him."

House Democratic Leader Nancy Pelosi (Calif.) said, "The criminal indictment of Majority Leader Tom DeLay is the latest example that Republicans in Congress are plagued by a culture of corruption at the expense of the American people."

But White House spokesman Scott McClellan described DeLay as "a good ally, a leader who we have worked closely with to get things done for the American people."

"I think the president's view is that we need to let the legal process work," he added.

"No jury can undo the outcome of Texas's 2002 elections," Craig McDonald, director of Texans for Public Justice, said in a news release. McDonald, whose complaint helped spark Earle's investigation, continued: "But the justice system must punish those who criminally conspire to undermine democracy -- no matter how powerful they may be. If we are to be a 'democracy,' then powerful politicians cannot flout such laws with impunity."

Staff writers Juliet Eilperin in Austin and Jeffrey H. Birnbaum and Amy Goldstein in Washington contributed to this report.

© 2005 The Washington Post Company

washingtonpost.com
Movement of $190,000 at Issue
DeLay Case Could Hinge on Original Source of Money
By R. Jeffrey Smith, Washingtonpost.com, Friday, September 30, 2005; A06

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The head of a Texas political group organized by then-House Majority Leader Tom DeLay made an urgent request on Sept. 10, 2002, to the group's accountant: Send a blank check overnight to DeLay's chief fundraiser in Washington. The next day, the fundraiser, James W. Ellis, inscribed it to an arm of the Republican National Committee and wrote in the amount: $190,000.

It was an odd, election-eve donation of funds to Washington by a political group formed to support Republicans in Texas. But that was not the whole story. On Oct. 4, 2002, the RNC sent the same total amount in seven checks ranging from $20,000 to $40,000 to candidates for the Texas House.

It is this transaction -- the swift and loosely documented transfer of funds from Texas to Washington and the subsequent transfer of the same amount in multiple checks back to Texas -- that lies at the heart of Wednesday's indictment of DeLay and two political associates by a Texas prosecutor, Ronnie Earle.

But little else about the transaction is uncontested, either in court or among political finance experts, who disagree about whether the transaction was legal and can only speculate about the precise evidence connecting it to DeLay (R-Tex.). What seems clear so far is that such funds transfers are more likely to be viewed as manipulations by authorities at the state level than they are by political parties or leaders in Washington, some of whom assert they were legal and routine.

Earle, the Travis County prosecutor, has asserted for example that the two payments amount to money-laundering meant to facilitate the DeLay political group's effort to circumvent knowingly the state's ban on corporate election contributions. A county prosecutor in Minnesota is making the same argument in a virtually identical case against the head of that state's Republican Party.

The RNC, whose Washington-based officials have not been indicted, takes a sharply different view of the propriety of receiving corporate funds from political organizations in states with restrictive laws and then spending identical sums on political campaigns in those states.

"Whether it was a coincidence or whether -- in sort of the worst-case scenario. . . . it was a fully arranged deal to send up $190,000 worth of corporate dollars and then later send back . . . 190,000 dollars of personal dollars [for Texas campaigns], who cares?" asked the top election law counsel for the RNC, Charles R. Spies.

"It's perfectly legal," he said, because the funds that came into the committee and the funds paid out by the committee came from separate bank accounts -- they were, in short, not the same pieces of scrip even if the dollar amounts matched.

Spies made that remark under cross-examination last March in a civil lawsuit brought by five of the Texas Democrats who lost their House seats in the 2002 election partly because of high spending by corporations, a plebiscite that turned out to have high stakes for both parties on the local and national stage.

In all, 17 Texas House Republicans who received funds from DeLay's Texas political action committee -- formally known as Texans for the Republican Majority or TRMPAC -- were elected. That result gave the party control of the House and enabled it to orchestrate a redrawing of the boundaries of congressional districts in a manner calculated to favor Republican candidates.

The result: Five more Texas Republicans were elected to the U.S. House in 2004, a stunning political success that dimmed the Democrats' chances of wresting away political control of Congress. DeLay has long acknowledged this was his goal. But yesterday he denied knowing about the key transfers of funds between Texas and Washington.

Even before Earle can attempt to prove that DeLay agreed to the transactions "with the intent that a felony be committed" -- as his indictment alleges, he must first prove in state court that the transactions were illegal. So far, two Texas judges have indicated they find Earle's argument more compelling than the national Republican-centered view that transactions of this sort are allowed.

In May, Judge Joseph H. Hart ruled in Austin that some of the Democrats who lost the 2002 election were entitled to damages equivalent to double the sums the GOP candidates received and spent on their elections from the RNC. The Democrats' lawyer, Cris Feldman, says that Hart's ruling amounted to a tacit confirmation that the candidates had received tainted corporate funds and that money-laundering occurred in the case.

In July, Judge Robert Perkins rejected Republican claims that the state law barring the use of corporate funds was unconstitutionally vague and did not apply to the circumstances outlined in Earle's case. The judge also reaffirmed grand jury indictments for money-laundering leveled against the two political aides alleged by Earle to have conspired with DeLay.

Spies, the RNC lawyer, has given testimony in both Texas and Minnesota courts asserting that in Washington all these transactions are carefully monitored to forestall wrongdoing. He has also said corporate money that cannot be legally spent in 18 states was deposited in bank accounts kept "fire-walled off" from accounts holding non-corporate funds that can be freely spent in those states.

"Trading money is the practice," Spies testified, or at least it was in 2002 before federal election law reforms were enacted to obstruct it.

His testimony did not deter Earle, and it also made little impact on Patrick Flanagan, the prosecutor for Mower County, Minn., who two years ago indicted the state Republican Party chairman for collecting $15,000 from an insurance company and sending the money to the Republican National Committee in Washington -- only to get the funds back later.

Flanagan says that those in Washington who talk of separate bank accounts "are just . . . moving the shells around."

The Minnesota prosecution has not gone forward without difficulty. A state District Court last year threw out the indictments based in part on Spies's testimony about the separate accounts kept by the RNC. But a state appellate court later ruled that the judge had exceeded his authority and affirmed that "probable cause" existed to believe the then-state chairman, Ronald E. Eibensteiner, committed violations of the campaign law.

That ruling cited evidence that Eibensteiner had told a state auditor "there was a mechanism at the party's national office for using corporate contributions in state campaigns." The state Supreme Court affirmed the appellate ruling in March.

There is, however, an important difference in the public records associated with the two cases. In Minnesota, the prosecutor has presented documents making clear that the Republican chairman knew about the transfer of corporate funds to Washington. Earle has presented no evidence in public that DeLay had similar knowledge, and yesterday DeLay denied it.

"I didn't know they did this legal activity," DeLay told CNN, referring to the transfer of $190,000 to the RNC by his alleged co-conspirators, TRMPAC director John Colyandro and Washington fundraiser James Ellis. DeLay also said he did not know which Texas candidates the two men had "targeted" for donations from Washington in a note they sent to the RNC along with the check. "I did not know where the money went," he said.

Researcher Alice Crites contributed to this report.

© 2005 The Washington Post Company

Capitol Hill's DeLay Era Ends -- or at Least Stalls
Texan Who Stabilized GOP Power After '94 Takeover Is Seen as Strongest Majority Leader in Years
By Jeffrey H. Birnbaum and Dana Milbank, washingtonpost.com, Thursday, September 29, 2005; A07

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The indictment yesterday of Tom DeLay ended -- at least for now -- the reign of the most powerful leader the House of Representatives has seen in decades.

Love him or hate him -- and pretty much everybody did one or the other -- DeLay was the man who, more than Newt Gingrich, Dick Armey or Denny Hastert, consolidated the gains of the Republican Revolution of 1994 and institutionalized an enduring Republican majority in the Congress.

DeLay never became speaker himself -- and his indictment yesterday in Texas makes it increasingly unlikely that he will reach his goal of succeeding Hastert -- but in practice he ran the legislative agenda on Capitol Hill for the better part of a decade.

In opposition during the Clinton administration, he was a pivotal figure in the "Contract With America," and high-profile battles over health care, budgets and impeachment. During the Bush administration, he was responsible for the lockstep discipline in the House that passed President Bush's agenda and forced action in a wobbly Senate.

"Tom DeLay is an historically giant figure in the ascendancy to power of the Republican Party for the last quarter of the 20th century and into the 21st century," said former Republican congressman Bill Paxon, now a lobbyist. "If you look back at virtually everything we've accomplished, he's been vital to that success."

Democrats grudgingly agree. "He's easily the most powerful Republican on Capitol Hill, and nobody's in his weight class," said Democratic strategist Jim Jordan. "He exerts the kind of discipline that hasn't been seen in decades."

Indicted by a Democratic district attorney in Texas, DeLay said yesterday that he is the victim of "blatant political partisanship" -- a complaint that echoed the protests of Bill Clinton and other DeLay foes when their ethical lapses were turned into major scandal by DeLay's personal, bare-knuckled brand of politics.

"This is an old story that keeps repeating: The people who are way out there and pushing the limits of power, they eventually are pushed out themselves," said James A. Thurber, a political science professor at American University. "Jim Wright and Newt Gingrich did that, and they went. Now Tom DeLay. It was just a matter of time."

DeLay's removal as majority leader leaves a large vacuum in the GOP at a time when party discipline was already suffering. Bush, his approval ratings at all-time lows, has lost much of his sway over congressional Republicans, and there are divisions in the party over spending, Iraq and legislative priorities. As such, DeLay's absence in leadership presents the party he built with an existential challenge: Can it maintain DeLay's massive fundraising machine and centralized discipline without DeLay himself in charge?

When he moved up to become majority leader from whip three years ago, he was given by a lobbyist a velvet-covered hammer, to designate that he would rule with a lighter touch in his new job. In fact, he continued to pound away almost all the time -- for campaign money, for control of the legislative and ideological agenda, and for prominence in downtown Washington where the lobbyists rule.

His network of former staffers among lobbyists and in the world of fundraising was so extensive that it earned the sobriquet DeLay Inc. His people started several all-Republican lobbying firms, populated dozens of others and were the engine of a huge multimillion-dollar fundraising machine that helped keep Republicans in the majority.

Under him, the House floor operated like a GOP machine, thanks largely to the backroom cajoling and campaign money from DeLay, aided by his protege who succeeded him, Roy Blunt. "When the president's agenda didn't have full support by Republicans in the House, he made sure it gets done and passes," said Stuart Roy, a former communications director for DeLay now working for a lobbying firm. "He got everything from the president's tax relief to Bush's money for AIDS initiative in Africa. For DeLay, success begot success. Once he was able to deliver on a few big things early on in the Republican majority, it built upon itself."

The 58-year-old DeLay, who ran a pest-exterminating business in the Houston area before coming to power, is a devout Christian known for his charitable work involving foster children.

As a legislator, he has quite a different reputation. He has held votes "open" on the House floor while he strong-arms wayward Republicans to support the party line. He earned a rebuke when he told one lawmaker that he would support his son's bid for Congress if the lawmaker would vote for a Medicare prescription bill DeLay favored. Most famously, he championed a redistricting plan that won the GOP five more seats in Congress and created the controversy that led to yesterday's indictment.

As a fundraiser, DeLay, now in his 11th term, has been an industry unto himself. In addition to his own reelection fund, which for 2006 has already collected $1.2 million, his fundraising entities have collected many millions of dollars that have flowed into the coffers of Republicans he wanted to place in office.

DeLay also was a behind-the-scenes maneuverer to take control of "downtown" Washington. He and his aides were active in promoting Republicans as the heads of Washington corporate offices and trade associations -- the so-called K Street Project. DeLay was chastised by the House ethics committee for his role in trying to force the Electronics Industries Alliance to chose a Republican as its chief executive, an effort that ultimately failed. Other efforts, more subtle, were successful.

DeLay has often been accused of running close to the edge of legality and ethical behavior. He has three times been admonished by the House ethics committee and has asked the panel to look into his much-written-about travels with lobbyist Jack Abramoff. Abramoff, whose more than $80 million in fees from American Indian tribes is under investigation by the Justice Department, worked closely with DeLay and his staff. Ethics lawyers say DeLay may well have been in technical violation of ethics rules, because Abramoff paid for some travel expenses for DeLay during trips to Britain and elsewhere.

Publicly, Republicans stood by their embattled colleague Wednesday. Privately, some began to talk of a post-DeLay era. Either way, they were hopeful that, whatever happened with the legal troubles, DeLay had institutionalized his fundraising and vote-whipping prowess so much that it would outlive him. "He is a conviction politician like Ronald Reagan; he's also been a party builder," said Grover Norquist, an anti-tax activist and DeLay ally. "DeLay always kept his eye on building party and the movement, and that's rare."

© 2005 The Washington Post Company

DeLay PAC Is Indicted For Illegal Donations
Corporate Gifts Aided GOP in Texas Races
By R. Jeffrey Smith, Washingtonpost.com, Friday, September 9, 2005; A03

A grand jury in Texas indicted yesterday a state political action committee organized by House Majority Leader Tom DeLay (R-Tex.) for accepting $120,000 in allegedly illegal corporate campaign contributions shortly before and after the 2002 elections that helped Republicans cement their control of the House of Representatives.

The indictment follows a lengthy investigation in Austin that previously had targeted the defunct political action committee's executive director, John Colyandro. He was indicted last year for accepting illegal corporate donations and for illegally laundering $190,000 in corporate funds through the Republican National State Elections Committee that later wound up in the hands of Texas Republican candidates.

The criminal charges are based on a Texas election law, akin to rules in 17 other states, that strictly bars political contributions from corporations for election purposes. But according to evidence submitted in a related civil trial, the committee, Texans for a Republican Majority (TRMPAC), raised and spent at least $523,000 in corporate funds -- most of which were not reported to state election officials.

The funds paid for surveys, mailings, receptions, candidate investigations and probes of Democratic candidates that helped Republicans gain control of the Texas House for the first time in 130 years, and enabled them to redraw the state's congressional districts in 2003 in such a way that Texas voters elected five more Republicans to Congress in 2004.

DeLay, who was a member of the committee's advisory board, signed fundraising solicitations and participated in at least one conference call to discuss the committee's plans, was not named in the indictment. He also has not been publicly identified as a target of the continuing investigation by Travis County District Attorney Ronald Earle.

DeLay spokesman Kevin Madden responded to the indictment with a written statement saying that it "is limited to a political organization and does not affect Mr. DeLay."

Madden also disclosed for the first time that DeLay had "voluntarily" talked to Earle's office about the investigation last month, and that DeLay said then that his involvement in the committee's activities was "limited to serving on the political action committee's advisory board along with other elected Texas officials and . . . appearing at fundraising events."

Madden said DeLay "assured the district attorney's office that he was not involved in the day-to-day operations of TRMPAC, and to his knowledge all activities were properly reviewed and approved by lawyers" for the committee.

When asked yesterday about DeLay, however, Earle said at a news conference that he was hampered in bringing charges by a provision of the election law that gives him direct authority only over residents of Travis County. He has separately said he does not face that limitation with respect to bringing new charges under the state money-laundering statute.

DeLay's residence is in Fort Bend County, where the prosecutor is an elected Republican, John F. Healey Jr. If Earle found evidence of criminal wrongdoing by DeLay under the election statute, he could only pass on the information to Healey with a recommendation that he pursue the matter.

Earle has not done so, several sources said yesterday, but has until the end of this month to decide the matter under a three-year statute of limitations.

The grand jury singled out two contributions that it said the committee illegally accepted -- a $20,000 contribution from AT&T Corp. on Nov. 18, 2002, and a $100,000 contribution from the Alliance for Quality Nursing Home Care Inc. on Oct. 24, 2002. The latter donation generated considerable controversy in Texas political circles after local newspapers reported that state Rep. Tom Craddick accepted it in a white envelope from the head of a large Texas nursing home chain during a meeting at a Houston restaurant.

Craddick's attorney, Roy Q. Minton, said that Craddick -- who was later elected speaker of the House and in that role oversaw the redrawing of congressional districts -- immediately passed the check along to TRMPAC. "Just because the guy happens to be speaker of the House does not mean it's against the law," Minton said.

Terry Scarborough, an attorney for TRMPAC before it formally went out of business this summer, declined to comment on the committee's indictment. Four additional indictments by the grand jury separately accused the Texas Association of Business with accepting additional illegal corporate funds and coordinating its expenditure with TRMPAC. Attorneys for the association have denied wrongdoing.

© 2005 The Washington Post Company

DeLay Allies Seek Dismissal of Charges Law on Political Gifts Called Too Vague
By Sylvia Moreno, Washington Post Staff Writer, Thursday, May 12, 2005; A03

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AUSTIN, May 11 -- Two political associates of House Majority Leader Tom DeLay (R-Tex.) asked a judge Wednesday to throw out indictments that charge them with money laundering and unlawfully accepting corporate political contributions during the 2002 Texas legislative campaign.

Travis County District Judge Bob Perkins set a June 27 deadline to issue a ruling on the requests.

Lawyers for Jim Ellis and John Colyandro, who ran DeLay-founded political action committees, argued that the felony indictments were based on an unconstitutionally vague Texas law that governs the use of corporate political contributions. State law bars businesses and labor unions from contributing money to influence campaigns. But such money may be used to establish a political committee or pay for a committee's administrative costs, such as office rent and utilities.

At issue in this case is whether spending corporate money on pollsters, consultants and phone banks falls under the definition of administrative costs and not "express advocacy" for a candidate.

"The statute is over-broad, and it's vague," said J.D. Pauerstein, an attorney for Ellis, the director of DeLay's Washington-based political action committee, Americans for a Republican Majority. During the 2002 election cycle, Ellis worked closely with Colyandro, then the executive director of Texans for a Republican Majority, also created by DeLay and based in Austin.

"We believe our indictment is correct and that the law is not unconstitutional. That will be our position in everything we file from here on," said Travis County Assistant District Attorney Gregg Cox.

Also in contention in the case is whether the transfer of $190,000 in corporate funds by Ellis and Colyandro to the Republican National State Elections Committee -- which subsequently donated the equivalent amount to seven GOP statehouse candidates supported by TRMPAC -- constituted money laundering.

TRMPAC is credited with helping to secure the election of a Republican majority to the Texas legislature in November 2002. That led to the appointment of a Republican speaker of the Texas House and the legislative control needed to redraw the state's 32 U.S. House districts in a way likely to send more Republicans to Congress in 2004.

Ellis and Colyandro were indicted last September by a Travis County grand jury on one count of money laundering each. Colyandro also was indicted on 13 counts of unlawful acceptance of a corporate political contribution. Washington consultant and fundraiser Warren RoBold, who helped TRMPAC raise money, was indicted on charges of accepting illegal corporate contributions. His case is proceeding separately and will be back in court June 21.

Eight corporations also were indicted for making illegal contributions to TRMPAC in amounts of $20,000 to $100,000. Charges against four of the businesses have been dropped in exchange for cooperation in the case.

Travis County District Attorney Ronald Earle is scheduled to appear before Perkins on Thursday on a request related to the TRMPAC prosecution. Earle has subpoenaed confidential documents from the Texas Ethics Commission that his office contends will show whether anyone subsequently associated with TRMPAC asked for an opinion on the legality of using corporate donations in a campaign. The commission has refused to turn over the documents despite the advice of Texas Attorney General Greg Abbott that it comply.

© 2005 The Washington Post Company

DeLay PAC Trial Looks at Money-Laundering Claims
By Sylvia Moreno, Washington Post Staff Writer, Friday, March 4, 2005; A04

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AUSTIN, March 3-- A civil trial focusing on the fundraising activities of a political action committee set up by House Majority Leader Tom DeLay (R-Tex.) turned Thursday to one of the major allegations: that the PAC laundered money in its quest to elect Republicans to the state legislature in 2002.

At issue is $190,000 in corporate donations that the director of Texans for a Republican Majority sent to the Republican National State Elections Committee in mid-September 2002. Three weeks later, the committee sent checks in the equivalent amount that had been raised from individual donors to seven Republican statehouse candidates supported by TRMPAC. Texas law prohibits the use of corporate funds in election campaigns.

Charles R. Spies, the election law counsel for the Republican National Committee, testified that the practice of "trading money" between the RNC and state political committees was common through the end of 2002, when it was outlawed under federal campaign finance reform. Until then, he said, corporate dollars raised in states that outlaw such campaign contributions could be sent to the RNC, which would then send back donations raised from individuals--but rarely on a one-to-one ratio.

"It's much harder to raise, so it's worth more," he said of individual donations.

Spies also said that decisions on which local candidates to support were made by the RNC's political division. He said he did not know which, if any, discussions occurred between TRMPAC and national Republican officials regarding the checks issued to the candidates for the Texas state legislature.

But if there had been discussion, Spies added, "So what? There's nothing wrong with that. . . . The money came in perfectly legally. The money was deposited perfectly legally and several weeks later, the money was disbursed legally. That is absolutely legal."

However, two people involved in that transaction have been indicted on felony charges of money laundering. The director of TRMPAC, John Colyandro, and Jim Ellis, the director of DeLay's national PAC, Americans for a Republican Majority, were indicted by a Travis County grand jury in Austin for allegedly laundering the $190,000 donation in violation of the Texas election code.

The indictments allege that six illegal corporate donations totaling $190,000 were made to TRMPAC, which Colyandro then sent in one lump sum to the Republican National State Elections Committee. According to the indictments, Ellis delivered the check to the RNC and gave the committee a list of names and the check amounts, totaling $190,000, to be mailed back to the Texas legislative candidates in noncorporate money. The criminal cases against Colyandro, Ellis, fundraiser Warren RoBold and five corporations are proceeding in Travis County District Court.

The civil case, in its fourth day, was brought against TRMPAC treasurer Bill Ceverha by five Democrats who lost legislative elections to Republicans in 2002 and say corporate money was used illegally to influence their races. They also sued Colyandro and Ellis, but the civil cases against them have been postponed pending the outcome of their criminal cases.

Ceverha's lawyer, Terry Scarborough, said that Spies's testimony disputed any allegations of money laundering because the donations that went to the RNC and were returned to Texas were legal. "I think he made it clear those indictments won't stand," Scarborough said.

© 2005 The Washington Post Company

Below is an article from the New York Times, and we suggest you read it and think, "oh really? How do the 'analysts' know that only Tom DeLay will be affected by the pending investigation? (editor's note):

October 2, 2005
DeLay Scandal Will Affect Only DeLay, Texans Say
By JOHN M. BRODER, NY TIMES

LINK

When Representative Tom DeLay helped engineer the Republican takeover of the Texas Legislature in 2002, it was a broad victory for his party. It paved the way for a redistricting process that resulted in Texas sending five new Republican members to Congress two years later, consolidating the party's control in the House.

Now, however, as Mr. DeLay faces a criminal conspiracy charge that he used a political action committee to funnel contributions illegally to Texas candidates in that pivotal election of 2002, he may stand as the lone Republican in his home state to suffer any political fallout, analysts said.

Gov. Rick Perry, who began his career as a Democrat and then switched parties in the 1990's, is unlikely to be affected by Mr. DeLay's troubles because the two are not close, Texas political experts said. Mr. DeLay is not expected to become an issue in an expected primary fight between Mr. Perry and Carole Keeton Strayhorn, the state comptroller.

Another prominent Texas politician, state House Speaker Tom Craddick, a longtime ally of Mr. DeLay, was not charged. Mr. Craddick raised money from many of the same business interests to secure Republican control of the Legislature.

"That sort of limited the impact in Texas politics to the environmental," said Calvin C. Jillson, a professor of political science at Southern Methodist University in Dallas. "It affects the way people think about the Republicans' practice of politics in Texas. If the speaker or sitting members had been indicted, that would have produced a much stronger backlash against Republicans."

Mr. DeLay, who had to relinquish his role as House majority leader because of the indictment, has long run from a safe district centered in Sugar Land, Tex., near Houston, and he has easily fended off challengers.

But in engineering the much-disputed 2003 Texas Congressional redistricting, Mr. DeLay sacrificed some Republican precincts of his own district to pad Republican majorities in the new districts around him. That, coupled with his indictment, may cost Mr. DeLay his seat, some analysts believe.

"He's been gut-shot politically," said A. R. Schwartz, who served 25 years as a Democrat in the Texas Legislature and is now a lobbyist in Austin. "You can take a glancing blow sometimes, you can be accused of many things and still get elected to public office. But an indictment for a felony, no matter how much yelling you do about how false and how flimsy and how fake it is, the public says the guy got indicted, and where there's smoke there's probably fire."

Despite Mr. DeLay's fearsome reputation in Washington, Texas political analysts say that he is not a prominent or popular figure in Texas and does not enjoy strong alliances with more highly regarded statewide politicians like Governor Perry or Senator Kay Bailey Hutchison, also a Republican.

Mr. DeLay has denied the accusations against him, which concern the raising and use of money by a political action committee he helped direct known as Texans for a Republican Majority. The Travis County prosecutor, Ronnie Earle, a Democrat, said that Mr. DeLay and several associates solicited corporate donations and then laundered them through the Republican National Committee to individual candidates in Texas legislative races, a violation of state campaign finance laws. Mr. DeLay has accused Mr. Earle of conducting a partisan vendetta.

Mr. DeLay easily won re-election to his 11th term in Congress in 2004 against a relatively unknown and poorly financed candidate named Richard Morrison. But his 55 percent of the vote was far below the 65 or 70 percent he had received in most previous elections. And he spent $3.1 million, against Mr. Morrison's $685,000, to hold on to his seat.

This time, his opponent is Nick Lampson, a four-term Democratic veteran of Congress who lost his seat in 2004 as a direct result of the redistricting plan. Mr. Lampson, whose campaign slogan is "We're working to bring integrity back to the 22nd District," has vowed revenge and has already raised more money than Mr. Morrison did, with the election still 13 months away. Mr. Lampson said he also hopes to turn his race into a referendum on Republican policies and ethics.

"He's had a swirl of controversy around him for more than 10 years, and he has spent his time not so much on the needs of the people of the 22nd District but on special interests and building his personal power and his party's power," Mr. Lampson said in a telephone interview. "That's not why I went to Congress. I went to represent the interests of the people who elected me."

Many Republicans in Texas dismissed the indictment of Mr. DeLay as politically motivated and said it would have little effect on his career or on the Republican domination of state politics. Governor Perry and Senator Hutchison issued statements of support, and party officials predicted that Mr. DeLay would be vindicated at trial.

"Republicans in Texas are rallying around Congressman DeLay," said Reggie Bashur, a Republican consultant in Austin and a former political aide to President Bush when he was governor of Texas. "There's a clear perception that this indictment is pretty thin and politically inspired. The public is looking at this and saying it's all about politics."

Professor Jillson said the fallout from the scandal would probably remain limited to Mr. DeLay's own reputation and career. "Seeing him as a hardball politician is one thing," Mr. Jillson said, "but seeing him indicted is another."

September 20, 2005
Ex-White House Aide Charged in Corruption Case
By PHILIP SHENON and ANNE E. KORNBLUT, NY TIMES

WASHINGTON, Sept. 19 - A senior White House budget official who resigned abruptly last week was arrested Monday on charges of lying to investigators and obstructing a federal inquiry involving Jack Abramoff, the Republican lobbyist who has been under scrutiny by the Justice Department for more than a year.

The arrest of the official, David H. Safavian, head of procurement policy at the Office of Management and Budget, was the first to result from the wide-ranging corruption investigation of Mr. Abramoff, once among the most powerful and best-paid lobbyists in Washington and a close friend of Representative Tom DeLay, the House majority leader.

According to court papers, Mr. Safavian, 38, is accused of lying about assistance that he gave Mr. Abramoff in his earlier work at the General Services Administration, where he was chief of staff from 2002 to 2004, and about an expensive golf trip he took with the lobbyist to Scotland in August 2002.

Mr. Abramoff, a former lobbying partner of Mr. Safavian, was indicted last month in Florida on unrelated federal fraud charges. He is not identified by name in the court papers involving Mr. Safavian's arrest. But "Lobbyist A" in an F.B.I. affidavit could only be Mr. Abramoff based on descriptive details in the documents filed in the Federal District Court here.

The Justice Department said Mr. Safavian had been specifically charged with making false statements to investigators about his efforts at the General Services Administration in 2002 to help Mr. Abramoff acquire two large pieces of government-owned property in the Washington area, including the historic Old Post Office Building on Pennsylvania Avenue.

The department said Mr. Safavian had also lied to ethics officials at the agency, which manages federal property, when he sought approval to accept free transportation from Mr. Abramoff for the golf trip to Scotland that summer. According to court documents, Mr. Safavian told the ethics office that Mr. Abramoff had no business with the agency at the time, an assertion that was repeated in a separate interview this May with the Federal Bureau of Investigation.

Mr. DeLay, who has asked the House ethics committee to review his ties to Mr. Abramoff, has come under criticism from Congressional Democrats and ethics watchdog groups for taking a similar golf trip to Scotland with Mr. Abramoff in 2000, including rounds of golf on the fabled course at St. Andrews.

The Justice Department made no accusation in its court papers of any tie between Mr. DeLay and Mr. Safavian nor of any involvement by Mr. DeLay in Mr. Abramoff's effort to buy government property. A spokesman for Mr. Abramoff had no comment on the arrest of Mr. Safavian. Phone calls to Mr. Safavian's home in the Virginia suburbs of Washington were not returned.

The White House said in a statement that Mr. Safavian had resigned on Friday and that "we, of course, will cooperate fully with the Justice Department in this investigation." A spokesman said the White House would have no further comment on the arrest.

Mr. Safavian had recently been working on developing contracting policies for the multibillion-dollar relief effort after Hurricane Katrina.

The Justice Department did not reveal details of Mr. Safavian's arrest, including where it occurred. The department also did not say why the criminal charges were brought directly by prosecutors, rather than by the Washington grand jury investigating Mr. Abramoff. The Justice Department often bypasses a grand jury when a criminal case is brought together hurriedly or when there is fear that a defendant may try to flee.

The F.B.I. affidavit, which was dated Friday and made public on Monday, said that Mr. Safavian had provided extensive, secret assistance to Mr. Abramoff in 2002, when the lobbyist wanted help on behalf of a client to arrange a lease on favorable terms for the Old Post Office Building, which was controlled by the General Services Administration. The affidavit said the client was one of several Indian tribes that Mr. Abramoff has represented.

The court papers said Mr. Abramoff had also sought Mr. Safavian's help in buying 40 acres at the Naval Surface Warfare Center in the Maryland suburbs of Washington to be the new home of a Jewish children's school that Mr. Abramoff had founded. That property was also under the control of the General Services Administration.

Local real estate records suggest that neither property was acquired by Mr. Abramoff or his clients, despite his repeated requests for help in e-mail messages sent to a private account maintained by Mr. Safavian.

The Justice Department affidavit said that even as Mr. Safavian was trying to help Mr. Abramoff in acquiring the government property in 2002, he was eagerly planning his summer golf trip with the lobbyist to Scotland. The F.B.I. affidavit also suggested Mr. Abramoff's motivation in inviting Mr. Safavian was clear. In an e-mail message, a lobbyist colleagues asked: "Why dave? I like him but didn't know u did as much. Business angle?"

According to the court papers, Mr. Abramoff replied with another e-mail message: "Total business angle. He is new COS of GSA."

Like Mr. Abramoff, Mr. Safavian, a former Congressional aide, has extensive ties to prominent Republicans on Capitol Hill, throughout the executive branch and among the city's lobbying firms.

He helped start Janus-Merritt Strategies, a consulting firm, with Grover G. Norquist, the head of the conservative advocacy group Americans for Tax Reform and a close political ally of the Bush administration.

Mr. Safavian worked with Mr. Abramoff in the Washington lobbying offices of Preston Gates & Ellis, a Seattle-based firm. According to lobbying records, Mr. Safavian shared at least one client with Mr. Abramoff, the Mississippi Band of Choctaw Indians, and also represented Microsoft, the Port of Seattle and the Dredging Contractors of America.

His wife, Jennifer Safavian, is chief counsel for oversight and investigations on the House Government Reform Committee, which is responsible for overseeing government procurement and is, among other things, expected to conduct the Congressional investigation into missteps after Hurricane Katrina.

Both Mr. Safavian and his wife graduated from Detroit College of Law at Michigan State University. They have a daughter.

According to his former colleagues in the Bush administration and interviews he gave, Mr. Safavian considered encouraging "competitive sourcing" or outsourcing government work to private contractors to be a primary goal in his job at the Office of Management and Budget.

He did not oversee specific contracts, but instead managed overall guidelines for government purchasing, associates said. In an interview in June with Federal Times, a newspaper that focuses on the workings of the federal government, Mr. Safavian described his work for the office and said that "the best advice I've gotten was from my grandfather and that advice is that you've got to have ethics and integrity in everything you do, especially here in D.C."

Robert Pear contributed reporting for this article.

The Washington Post has published a series of articles on the indictment of Tom DeLay and the Ethics of his actions.

Dear President Bush: Why DeLay?

The Bush Administration Appears To Value Who You Know More Than What You Know