Tom DeLay's tainted ethics panelWill the hammer be lowered on 'The Hammer'?

He's the religious right's most dependable culture warrior in the House of Representatives. According to the Religious Freedom Coalition of the Southeast, he "was the first national politician to call for Bill Clinton's resignation after the President admitted to fooling around with Monica Lewinsky." You probably couldn't pick him out of a line-up, you wouldn't recognize him if you passed him on the street, he's not a household name and it's likely that he won't be speaking in prime-time at next month's Republican Party convention in New York City. Yet Tom DeLay, the Republican House Majority Leader representing Sugar Land, Texas (a suburb outside Houston) -- who literally got his start snuffing out roaches and other vermin and is now known as "The Hammer" -- is the most powerful man in Congress.

"DeLay is a pro-gun, anti-abortion, antigovernment, born-again Christian zealot who sees his mission in life as the protection of small business and, of course, pork barrel projects for his home state," Robert Bryce writes in his recently published book Cronies: Oil, the Bushes, and the Rise of Texas, America's Superstate (Public Affairs, 2004).

And he's no stranger to controversy and hardball politics. According to Bryce, after the GOP took control of Congress in 1995, DeLay "put together a list of the 400 largest political action committees and the amounts of their contributions to each party... [and] invited the heads of those PACs to his office, where he showed them how their outfit -- and their lobbyists -- were classified by the new rulers of the House... There were two groups: 'friendly' and 'unfriendly."
Out of these meetings came the "K Street Strategy" -- named after the street in Washington where many lobbying companies have their offices -- which included "purging all known Democrats from trade associations, political action committees, and lobby firms that work on Capitol Hill," Bryce writes.

It's not easy going head-to-head with Majority Leader Tom DeLay, the most powerful member in the House, but that's exactly what Houston Democratic Congressman Chris Bell is doing. According to the Associated Press, in mid-June, Rep. Bell "claimed DeLay illegally solicited campaign contributions in return for legislative favors and laundered illegal corporate contributions for use in Texas elections. Bell also alleged that DeLay improperly used his office to solicit help from federal agencies in searching for Democratic legislators who slipped out of Texas during last year's redistricting fight."

After Republicans, with support from DeLay, took control of the Texas legislature for the first time in well over 100 years, the Texas GOP redrew the state's congressional map -- a plan aimed at taking at least five House seats from Democrats in November. Democrats in the state legislature left the state to avoid voting on DeLay's redistricting plan, but eventually returned and were unable to kill the remapping effort. While they were out of state, Rep. Bell charges that Delay illegally used the Federal Aviation Administration to track down the legislators.

Rep. Bell's charges are slated to be taken up by the House Committee on Standards of Official Conduct, also known as the House ethics committee. Will Rep. Bell get a fair hearing? It might be difficult, seeing as how four of the five Republicans on the committee "have received campaign contributions from DeLay's political action committee," according to Sheila Krumholz, the research director for the nonpartisan government watchdog group, the Center for Responsive Politics. She told Alternet that the four ethics committee members received $27,004 in contributions from DeLay entities.

From 1997 through May 2004, according to Federal Election Commission records, DeLay's political action committee, Americans for a Republican Majority (ARMPAC) and the Tom DeLay Congressional Committee contributed $14,777 to Rep. Kenny Hulshof of Missouri; $8,053 to Rep. Steven LaTourette of Ohio; $2,764 to Rep. Judy Biggert of Illinois; and $1,410 to Rep. Doc Hastings of Washington. Rep. Joel Hefley of Colorado, the ethics committee chairman, received no money from DeLay's political action committee.

Phone calls by Alternet to the Congressional offices of all four Representatives who received contributions from DeLay were not returned. Sarah Sheldon, Rep. Hefley's Press Secretary, told me that "the Congressman had no comment on Rep. DeLay's contributions to the other Republican members on the ethics committee." Thus far, during this election cycle, ARMPAC has raised nearly $3 million and has generously given over $600,000 to 75 House candidates, many of them incumbents. Unfortunately, there's no sunshine law that covers the gatherings of the 10-member ethics committee -- the only House committee divided equally among Republicans and Democrats: "Panel meetings are closed to the public and investigations are rarely acknowledged," the AP reported. In addition, all participants, including clerks and secretaries "must swear to reveal nothing confidential."

Rep. Bell was assisted in drafting his complaint by Citizens for Responsibility and Ethics (CREW) in Washington, a coalition of government watchdog groups that includes Judicial Watch, the Campaign Legal Center, Democracy 21, Public Citizen, Common Cause, The Center for Responsive Politics and Public Campaign. CREW's Executive Director Melanie Sloan stated: "No other member of the House has consistently shown this much disrespect for the rule of law and the honor of Congress and the country should thank Congressman Bell for his courage."

DeLay recently acknowledged that he had "attorneys all over the place," the Houston Chronicle recently reported. "I consult attorneys before I leave my office and make sure I am doing everything legally and ethically," he said. Over the past three years DeLay "has maintained a legal defense fund and paid legal expenses to Bracewell & Patterson, a Houston-based firm." The firm's Washington office is "representing him" in the ethics complaint filed by Rep. Bell.

According to Roll Call, Ed Bethune of the Bracewell & Patterson law firm "has served as a registered lobbyist for Burlington Northern Santa Fe Corp... one of the companies under scrutiny by the Travis County District Attorney in Austin, TX, in a criminal investigation of DeLay's Texans for a Republic Majority Political Action Committee. Roll Call cites IRS records that show Burlington Northern contributed $26,000 to that PAC." In Austin, DeLay has criminal defense attorneys Bill White and Steve Brittain "watching what's going on my behalf," the Majority Leader said. (For more on this and other DeLay affairs check out the web site takingontomdelay.com.)

The House Majority Leader's fundraising activities are getting mega press attention these days. A Washington Post article over the past weekend revealed that DeLay had solicited "$100,000 in donations to his political action committee from Enron's top lobbyists in May 2001 so he could help bankroll the redistricting" effort. Amy Goodman, the host of Pacifica Radio's "Democracy Now!" show reported that the $100,000 was in addition "to the $250,000 the company had already pledged to the Republican Party that year."

In a July 13, interview with Goodman, Lou Dubose, the author of the forthcoming political biography, The Hammer: Tom Delay, God, Money and the United States Congress, commented on the latest allegations against DeLay: Dubose described a relationship between DeLay and Enron that went back to 1994, when Enron donated $250,000 to DeLay just as his ARMPAC was getting off the ground.

Commenting on Rep. Bell's chances with the House ethics committee, Dubose told Goodman that for all practical purposes the ethics committee has been moribund: "For the past seven years, it's done nothing."

According to the AP, "The committee's next public step will be to dismiss the charges or to create an investigative subcommittee -- with two Republicans and two Democrats -- a decision that must be made by the first week of August, though more time can be requested."

DeLay paid his jury
 
Dallas Morning News
July 18, 2004

Let's say you get called for jury duty. It happens that the person on trial once gave you money. Would you expect to get picked for that jury?
Heck, no.
You'd expect to be sent home, pronto, and for good reason.
Even if you, as an upright and fair-minded citizen, could put the financial tie completely out of your mind, how could those of us looking on, who can't get inside your head, be confident in your impartiality?
That's essentially the situation in Washington, where Majority Leader Tom DeLay of Texas stands accused of unethical fund-raising practices. Four of the five Republicans on the committee investigating him have received money from his political action committee.
The sums aren't huge -- no more than $15,000 to any one person. But the payments illustrate how difficult it is for members of Congress -- a body that exists on back-scratching and favor-swapping, sometimes in the form of hard, cold cash -- to police themselves.
That difficulty is compounded manyfold when the subject of the probe is the House member with the greatest ability to reward friends and punish enemies. That's why former House ethics panels appointed outside counsels to handle investigations of former speakers Jim Wright and Newt Gingrich.
(It was Gingrich, you may recall, who held up the Democrats as the example of the effects of a single party wielding too much power. Something about "a cancer threatening the very essence of representative freedom.")
Turning the probe over to an outsider was sensible then, and it's sensible now. In fact, some scholars of congressional ethics would make such an appointment mandatory in all ethics investigations.
Without going that far, it's clear that, if ever there was a good time to bring in an impartial investigator, this is it.

Found amid Enron's rubble: insight into Tom DeLay

By PAUL KRUGMAN
New York Times
July 14, 2004, 9:41PM

PAUL KRUGMAN argues that while the House majority leader's current troubles may have come about by accident, his power in the Republican Party has not.

FROM a business point of view, Enron is a smoking ruin. But there's important evidence in the rubble.

If Enron hadn't collapsed, we might still have only circumstantial evidence that energy companies artificially drove up prices during California's electricity crisis. Because of that collapse, we have direct evidence in the form of the now-infamous Enron tapes — although the Federal Energy Regulatory Commission and the Justice Department tried to prevent their release.

Now, e-mail and other Enron documents are revealing why Tom DeLay, the House majority leader, is one of the most powerful men in America.

A little background: At the Republican convention, most featured speakers will be social moderates such as Rudy Giuliani and Arnold Schwarzenegger. A moderate facade is necessary to win elections in a generally tolerant nation. But real power in the party rests with hard-line social conservatives such as DeLay, who, in the debate over gun control after the Columbine shootings, insisted that juvenile violence is the result of day care, birth control and the teaching of evolution.

Here's the puzzle: If DeLay's brand of conservatism is so unpopular that it must be kept in the closet during the convention, how can people like him really run the party?

In DeLay's case, a large part of the answer is his control over corporate cash. As far back as 1996, one analyst described DeLay as the "chief enforcer of company contributions to Republicans." Some of that cash has flowed through Americans for a Republican Majority, called Armpac, a political action committee DeLay founded in 1994. By dispensing that money to other legislators, he gains their allegiance; this, in turn, allows him to deliver favors to his corporate contributors. Four of the five Republicans on the House ethics committee, where a complaint has been filed against DeLay, are past recipients of Armpac money.

The complaint, filed by Rep. Chris Bell of Houston, claims, among other things, that DeLay laundered illegal corporate contributions for use in Texas elections. And that's where Enron enters the picture. In May 2001, according to Monday's Washington Post, Enron lobbyists in Washington informed Ken Lay via e-mail that DeLay was seeking $100,000 in additional donations to his political action committee, with the understanding that it would be partly spent on "the redistricting effort in Texas." The Post says it has "at least a dozen" documents showing that DeLay and his associates directed money from corporate donors and lobbyists to an effort to win control of the Texas Legislature so the Republican Party could redraw the state's political districts.

Enron, which helped launch Armpac, was happy to oblige, especially because DeLay was helping the firm's effort to secure energy deregulation legislation, even as its traders boasted to one another about how they were rigging California's deregulated market and stealing millions each day from "Grandma Millie."

The Texas redistricting, like many of DeLay's actions, broke all the usual rules of political fair play. But when you believe, as DeLay does, that God is using you to promote a "biblical worldview" in politics, the usual rules don't apply. And the redistricting worked — it is a major reason why anything short of a Democratic tidal wave in November is likely to leave the House in Republican hands. There is, however, one problem: A 100-year-old Texas law bars corporate financing of state Legislature campaigns. An inquiry is under way, and DeLay has hired two criminal defense attorneys. Stay tuned.

But you shouldn't conclude that the system is working. DeLay's current predicament is an accident. The party machine that he has done so much to create has eliminated most of the checks and balances in our government. Again and again, Republicans in Congress have closed ranks to block or emasculate politically inconvenient investigations. If Enron hadn't collapsed, and if Texas didn't still have a campaign finance law that is a relic of its populist past, DeLay would be in no danger at all.

The larger picture is this: DeLay and his fellow hard-liners, whose values are far from the American mainstream, have forged an immensely effective alliance with corporate interests. And they may be just one election away from achieving a long-term lock on power.

Krugman is a columnist for The New York Times and professor of economics and international affairs at Princeton University.

Reviewers of DeLay's ethics got his money

Associated Press

AUSTIN -- Four of the five Republicans investigating an ethics complaint against House Majority Leader Tom DeLay have received campaign contributions from DeLay's political action committee, records show.

The contributions -- $28,504 split among the four during the past seven years -- were all delivered before the ethics committee received the DeLay complaint June 15. But it is an example of awkward situations spawned by the U.S. House's decision to police itself on ethics.

"I think all the members hate" serving on the committee, said Larry Noble, executive director of the Center for Responsive Politics, a nonpartisan government watchdog.

"You're put in the position of either doing nothing -- which is what they generally do -- in which case you are fairly criticized for not taking your job seriously. On the other hand, you can try to enforce the rules and get all the other members angry at you," Noble told today's Austin American-Statesman.

Though they would not comment on the record, those associated with the ethics committee, officially known as the House Committee on Standards of Official Conduct, disagree.

RESOURCES
• Complaint filed by U.S. Rep. Chris Bell against U.S. Rep. Tom DeLay -- Small PDF file.
• Exhibits and complaint -- Large PDF file, 10MB
• House Committee on Standards of Official Conduct
PDF files require the free Adobe Acrobat Reader.

Rep. Chris Bell, D-Houston, has claimed DeLay illegally solicited campaign contributions in return for legislative favors and laundered illegal corporate contributions for use in Texas elections. Bell also alleged that DeLay improperly used his office to solicit help from federal agencies in searching for Democratic legislators who slipped out of Texas during last year's redistricting fight.

DeLay, who says the charges are unfounded and amateurish, has until July 22 to formally answer the complaint, if he wishes.

The ethics panel meetings are closed to the public and investigations are rarely acknowledged. All participants -- from the 10 representatives to the newest clerk -- must swear to reveal nothing confidential.

It is the only House committee with an equal number of Democrats and Republicans. Equal representation is designed to derail purely partisan attacks. To move forward, a complaint must sway at least one member of the opposition party.

Rep. Lamar Smith, R-San Antonio, served four years on the ethics committee, including two as chairman, and said trumping party loyalty can be difficult.

Investigating DeLay could magnify the uncomfortable moments because he is more than a financial patron of four committee members; as the House's second-ranking Republican, he's also their boss, Noble said.

DeLay is his party's most prolific fund-raiser in the House. His political action committee, Americans for a Republican Majority, has raised almost $2.7 million during this election cycle, spreading $623,000 among 75 House candidates, many of them incumbents.

House Democratic leaders also give freely to members of their caucus.

The breakdown of recipients of the PAC's cash among the ethics committee members, according to Federal Election Commission records from 1997 through May 2004, is:

• $14,777 for Rep. Kenny Hulshof of Missouri. The latest contributions, totaling $9,000, were in 2000.

• $10,553 for Rep. Steven LaTourette of Ohio, with $10,000 coming this year.

• $1,764 for Rep. Judy Biggert of Illinois in 1998.

• $1,410 for Rep. Doc Hastings of Washington, also in 1998.

• Chairman Joel Hefley of Colorado received no money from DeLay's political action committee.

The committee's next public step will be to dismiss the charges or to create an investigative subcommittee -- with two Republicans and two Democrats -- a decision that must be made by the first week of August, though more time can be requested.

DeLay's corporate fundraising investigated
Money was directed to Texas GOP to help state redistricting effort

By R. Jeffrey Smith
Updated: 7:33 a.m. ET July 12, 2004

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 the 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.

© 2004 The Washington Post Company