Defendants' Ties to DeLay Draw Nation's Eyes to Texas Trial
By PHILIP SHENON

AUSTIN, Tex., Feb. 24 - A civil trial scheduled to open here on Monday involving allegations of illegal campaign contributions to Republican members of the Texas House is likely to attract almost as much attention in the halls of Congress as it will on the floor of the State Legislature.

The reason is the House majority leader, Tom DeLay, the Texas Republican who is among the most powerful men on Capitol Hill and his party's most potent fund-raiser in Congress. While not named as a defendant in the civil trial or placed on the witness list, Mr. DeLay is still likely to find himself a focus of attention in the Travis County courthouse, with Congressional Democrats looking for any sign that his legal troubles back home could be widening.

"People have this bloodlust for DeLay," said Rusty Hardin, a Houston lawyer who is defending a major Washington-based fund-raiser for Mr. DeLay who was indicted in a related criminal investigation here. "The entire focus and interest in this thing will be DeLay," Mr. Hardin said of the civil trial.

The trial in Travis County, which includes most of the state capital, Austin, was prompted by a lawsuit brought by defeated Democratic candidates who charged that political operatives of Mr. DeLay used illegal fund-raising tactics to engineer a Republican takeover of the Legislature. The takeover benefited Mr. DeLay and his colleagues in Washington by enabling Texas Republicans to redraw Congressional districts, solidifying Republican control of the House.

Two of Mr. DeLay's major political operatives in Washington and another political ally in Texas were indicted last year in the grand jury investigation, accused of participating in what local prosecutors described as a scheme to make illegal corporate donations to Republican candidates for the Legislature.

A century-old state law bars companies from making donations to individual candidates for the Legislature, a legacy of the struggles at the turn of the century between Texas farmers and ranchers and so-called corporate robber barons.

Another powerful Texan close to Mr. DeLay and his fund-raising operation here, House Speaker Tom Craddick, has had his records subpoenaed by the grand jury.

Mr. DeLay has said for months that he has nothing to fear from the criminal investigation, describing the earlier indictments as "frivolous" and a partisan attempt to "criminalize politics" by the Travis County district attorney, Ronald Earle, a Democrat who has held the job since the 1970's.

Still, while prosecutors have made no public suggestion that they consider Mr. DeLay a target of their continuing investigation, he has been gathering donations back in Washington for a legal defense fund to deal with the inquiry.

His legal troubles inspired a move by House Republicans last year - since reversed in the face of widespread criticism from within their own party - to rewrite House rules to allow Mr. DeLay to hold onto his job even if indicted.

In Washington, Mr. DeLay's spokesman, Dan Allen, seemed ready to deal with whatever unwelcome publicity is produced at the trial in Austin. He said last week that "as much as the Democrats and their allies would like to make this about Tom DeLay, this trial has nothing to do with Tom DeLay."

The trial is expected to produce testimony detailing Mr. DeLay's involvement in raising hundreds of thousands of dollars in corporate donations that were the basis of last year's indictments. The trial may also show that a legal noose is tightening on some of Mr. DeLay's political allies in Texas.

The most anticipated testimony at the trial had been that of Mr. Craddick, the first Republican to hold the job of Texas House speaker in more than 130 years and a close friend of Mr. DeLay from their days in the Legislature.

Mr. Craddick had been subpoenaed to testify about his ties to Mr. DeLay's political action committee, Texans for a Republican Majority, commonly known here as Trmpac (pronounced TRIM-pac). The committee's fund-raising and spending activities are the focus of both the civil lawsuit and the criminal investigation.

[In an agreement reached on Friday, Mr. Craddick was excused from taking the witness stand after he acknowledged through his lawyers that his office had distributed $152,000 in donations raised by the committee to Republican candidates in the months before his election as speaker, and after conceding that he and his staff might have shredded documents about the committee.

Sworn testimony could have posed dangers for Mr. Craddick, since Texas campaign laws make it a crime for candidates for the job of speaker to use campaign money to make donations to other lawmakers.]

Mr. Craddick's lawyer, Roy Minton, said in an interview last week, "I have not seen any evidence that the speaker broke any law." He said Mr. Earle, the prosecutor, "has never told me that the speaker is a target or anything like that."

The civil lawsuit was brought by five defeated Democratic candidates in the 2002 state election, who alleged that Mr. DeLay's political action committee used large corporate donations - many gathered from companies based outside Texas, some of them with little obvious interest in the state - to underwrite their Republican opponents.

One of the Austin lawyers representing the Democrats, Cris D. Feldman, said he expected to question witnesses intensively during the trial about their contacts with Mr. DeLay and the majority leader's role in the political action committee.

"It was DeLay's operatives, including his daughter, who set up and ran Trmpac," Mr. Feldman said. "Tom DeLay figures prominently in the events that will be discussed at trial."

Texans for a Republican Majority awarded a $30,000 contract to Mr. DeLay's daughter, Dani DeLay Ferro, to organize fund-raising events in 2002. She is not a defendant in the civil suit, and there has been no suggestion that she is under investigation by the grand jury.

The defendant in the civil trial is Bill Ceverha, the treasurer of the political action committee and a former Republican member of the Texas House, who is contesting the lawsuit. His lawyer, Terry Scarborough, said Mr. Ceverha had done nothing wrong, describing his client as a victim of a "larger political agenda" by Democrats aimed at chilling Republican fund-raising efforts in Texas and damaging Mr. DeLay.

Mr. DeLay, whose home is in Sugar Land, Tex., outside Houston, was a founder of the Texas political action committee in November 2001 and a member of its advisory board.

Early promotional material released by the committee alarmed Democrats, who suggested that it was evidence the committee intended to violate at least the spirit of the state's campaign laws. In one solicitation to donors, the committee said it intended to use corporate donations to finance "productive and innovative activities" to assist the Texas Republican Party, including "active candidate evaluation and recruitment" and "monitoring" of campaigns. There were four different contribution levels for companies, with the largest donors, $100,000 or more, given "platinum" status.

The Texas committee was modeled in part on Americans for a Republican Majority, Mr. DeLay's national political committee, and people with close ties to Mr. DeLay were given prominent roles in the Texas organization, including two of the defendants indicted last September: James W. Ellis, who ran Americans for a Republican Majority, and Warren RoBold, a Washington-based fund-raiser for Mr. DeLay.

The Texas committee's executive director, John D. Colyandro, who is a close friend of Mr. Ellis, was also charged. The three men have pleaded not guilty to the felony counts and are awaiting their trial, which has not been scheduled.

The committee's lawyers have said that the committee was always careful to separate donations from individuals, which could be passed on to candidates, from corporate donations, which were supposed to be restricted to administrative costs.

If Newt is warning DeLay about ethics, times are bad

By CRAGG HINES Copyright 2005 Houston Chronicle

Talking with Newt Gingrich about ethics may be like talking to Willie Sutton about bank robbery. You listen carefully to such an experienced practitioner, but you wonder: If he's so smart why did he get caught so often. ADVERTISEMENT No matter. Gingrich is currently as cautionary, if not as vocally indignant, about the House Republican leadership's slide into the muck as he is about debating "patriotic immigration" or "the myth of judicial supremacy."

As usual, Gingrich is taking the long view, not something that current House leaders such as Tom DeLay are regularly accused of doing. "Republicans in the House have to look at the reality that if we make sense as a party right now it's because we are the reform party, and anything that risks being the reform party is more dangerous for us than it is for the Democrats," Gingrich told a journalists' breakfast Tuesday sponsored by the Christian Science Monitor. "They should be very careful."

Well, of course, House Republicans are not being careful. They are profligately displaying their power, including the power to abuse the House's tenuous-at-best policing of itself. Gingrich's advice, minus some more general outcry, may be of limited effect. But Gingrich may have had a hand in stemming some of the abuses lately intended by DeLay & Co. Gingrich spoke out quickly late last year against the House Republicans' rule change to allow indicted leaders to retain their positions at least temporarily. The rule was reversed. But the rollback turned out to be a temporary expedient.

DeLay, sometimes through House Speaker Dennis Hastert, has since exacted revenge against the House Ethics Committee for repeatedly citing him. As a result of subsequent changes in House rules, it is now harder to institute an ethics complaint against a member. Hastert also replaced the fair-minded chairman of the House ethics committee, Joel Hefley, R-Colo., with a leadership stooge, Rep. Richard "Doc" Hastings, R-Wash., and replaced two of the Republicans on the panel. Two of the newly appointed members, including Rep. Lamar Smith, R-San Antonio, have been contributors to DeLay's legal defense fund.

If DeLay's message was not clear enough, Hastings fired the two long-serving senior committee staff members, who were, in effect, the panel's institutional memory. "It was terrible," Hefley told the Chronicle's Gebe Martinez of the staff firings. "Those two guys are very good, very competent professional staff. There was never a nuance of partisanship in either of them."

Gingrich made clear he thinks DeLay is on thin ice. "The Republican Party's majority comes from the Perot voters who want real reform," Gingrich said. "Anything which weakens that is difficult."

The replacement of Hefley and the staff firings are "a fait accompli," Gingrich judged. "But as they move toward the future they should be careful about understanding that to the degree that we are seen as no longer the reform party, we create space either for a third party or for people to just stay home. And both are dangerous for our majority."

For readers freshly arrived from Mars, Gingrich was the mischievous Moses who led conservative Republicans as they took control of the U.S. House in the 1994 election, for the first time in 40 years. He barely got to see the political promised land. Gingrich was House speaker (1995-1999) but was essentially run off after his party only narrowly hung on in the 1998 elections.

In his brief reign, Gingrich was assessed a $300,000 penalty for misleading the House Ethics Committee about his use of a tax-exempt organization for political purposes. He edged past other ethics skirmishes, including 22 checks bounced in the House bank scandal and a $4.5 million book advance from conservative media magnate Rupert Murdoch, which looked a touch too lucrative to be strictly a business deal. He gave it up for a sweet royalties arrangement.

Gingrich also was having an affair with a congressional aide amid one of his divorces, even as he condemned President Clinton for dalliances with a White House intern. "I'm a sinner," a well-practiced Gingrich said when questioned about moral authority. On old form, he quickly told his questioner: "And I expect you are too."

Given his own aggressively partisan background, Gingrich expressed surprise that Democrats aren't piling on more on issues such as Republican contracts with conservative commentators and the White House's admission of a pro-Republican male hooker to the press corps. "It's fair to say that in my career I would probably have found an opportunity to comment on it," Gingrich said.

As for running for president, Gingrich will be in Iowa and New Hampshire soon, but, "It strikes me as implausible." So, there's more than one thing on which Newt and I agree.

Hines is a Houston Chronicle columnist based in Washington, D.C. (cragg.hines@chron.com) http://www.chron.com/cs/CDA/printstory.mpl/editorial/outlook/3052707

House ethics committee chairman dismisses two lawyers, brings new Democratic criticism

By LARRY MARGASAKASSOCIATED PRESS WRITER

WASHINGTON -- The House ethics committee's new GOP chairman has fired two senior staff lawyers, leading Democrats to charge that the dismissals are further payback for the panel's rebukes of Majority Leader Tom DeLay last year.

The chairman, Rep. Doc Hastings, R-Wash., had no partisan motive for the changes, his top aide said.

Meanwhile, a group that monitors congressional conduct urged Hastings to maintain a vigorous investigative agenda and allay concerns that the committee would be dormant as a result of his membership changes.

Hastings is replacing John Vargo, staff director and chief counsel, and Paul Lewis, who was counsel to the former chairman and spokesman for the House Committee on Standards of Official Conduct.

Maryland Rep. Steny Hoyer, the No. 2-ranking House Democrat, said Wednesday the decision "smacks of retribution because these staffers put the ethical integrity of this institution above the agenda of the Republican leadership."

Democrats and watchdog groups have kept up a drumbeat of criticism this year, saying Speaker Dennis Hastert, R-Ill., replaced three of the five GOP members of the evenly divided committee in retaliation for three findings last year that criticized DeLay, R-Texas.

Ed Cassidy, chief of staff to Hastings and the committee's new spokesman, said, "By long tradition in the House, newly appointed committee chairmen - Democrats as well as Republicans - typically replace senior committee aides in order to ensure that a new chairman and the entire committee staff can work together cooperatively, confidentially and productively.

"Anyone suggesting these decisions were made for partisan reasons is flat out wrong," Cassidy said.

Fred Wertheimer, president of Democracy 21, a congressional watchdog organization, urged Hastings in a letter to continue to monitor a Texas investigation that led to indictments of three DeLay political associates. The committee deferred action on the matter last year.

Hastert this year elevated Hastings, who was on the committee, to chairman. Hastings replaced Rep. Joel Hefley, R-Colo., who presided over the rebukes of DeLay. Hefley's tenure was completed under a House term-limit rule, and the Republican leadership decided not to seek a waiver of the limit.

Republican Reps. Steven LaTourette of Ohio and Kenny Hulshof of Missouri also were replaced.
All three were involved in the DeLay matters, including the conclusion that he appeared to link political contributions and legislation.

The committee also rebuked DeLay for offering help for the House candidacy of a GOP lawmaker's son, in exchange for the member's vote for a Medicare drug benefit. In addition, the committee said DeLay improperly asked federal aviation authorities to track down Texas Democratic state lawmakers during a political dispute.

Two new Republican members of the committee, Rep. Lamar Smith of Texas and Tom Cole of Oklahoma, have made contributions to legal defense funds established by DeLay. He can use these funds to pay legal expenses in any future ethics investigations.

washingtonpost.com

House GOP Leaders Name Loyalist to Replace Ethics Chief

By Mike AllenWashington Post Staff Writer
Thursday, February 3, 2005; Page A01

House Republican leaders tightened their control over the ethics committee yesterday by ousting its independent-minded chairman, appointing a replacement who is close to them and adding two new members who donated to the legal defense fund of House Majority Leader Tom DeLay (R-Tex.).

Republican officials have spent months taking steps to ensure DeLay's political survival in case he is indicted by a Texas grand jury investigating political fundraising, and House leadership aides said they needed to have the ethics committee controlled by lawmakers they can trust.
Rep. Joel Hefley (R-Colo.), who clashed with DeLay so often that they barely spoke and was considered wayward by other leaders, was replaced yesterday with Rep. Richard Hastings (R-Wash.). Hastings has carried out other sensitive leadership assignments and is known as a favorite of Speaker J. Dennis Hastert (R-Ill.), who made the decision.

Hefley said in an interview yesterday that he believes he was removed because he was too independent. He said there is "a bad perception out there that there was a purge in the committee and that people were put in that would protect our side of the aisle better than I did."

"Nobody should be there to protect anybody," he said. "They should be there to protect the integrity of the institution."

The replacement of Hefley is the latest in a series of actions by GOP leaders to crack down on a rebellious ethics committee that posed a threat to DeLay and other Republicans.

DeLay and other Republicans were angered in October when the ethics committee admonished DeLay for asking federal aviation officials to track an airplane involved in a Texas redistricting controversy, and for conduct that suggested political donations might influence legislative action.
It was the third time that the panel had admonished the powerful majority leader. And many Republicans were miffed because the complaint that led to the committee's findings was filed by then-Rep. Chris Bell (D-Tex.), a freshman who lost his primary last year under the redistricting plan that DeLay had promoted.

Hastert had signaled for months that he would refuse to waive a rule that limited Hefley's term as chairman. The leadership not only stripped Hefley of his chairmanship yesterday but also removed him from the committee.

Hastings, 63, was the second-ranking Republican on the committee, known formally as the Committee on Standards of Official Conduct. Colleagues described him as unassuming and deliberative, and not excited about taking on the job. He ran his family's paper supply business before being elected to the House in 1994, the year Republicans regained control of Congress.
Hastings was in the speaker's chair in 2003 when the vote on the bill to add a prescription drug benefit to Medicare was kept open for nearly three hours while GOP leaders rounded up enough votes.

He also was chairman of an ethics subcommittee that looked into wrongdoing by former representative James A. Traficant Jr. (D-Ohio), who was expelled from the House in 2002. Traficant was later sentenced to prison for accepting bribes and evading taxes.

Republican leaders put on the committee two new members who have donated to a DeLay legal fund: Rep. Lamar S. Smith (R-Tex..) and Rep. Tom Cole (R-Okla.). Smith gave DeLay $10,000, making him among the seven largest donors among congressional members, and Cole gave $5,000, according to an analysis of disclosure records by the watchdog group Public Citizen.

DeLay's defense fund continues to operate, aides said. Public Citizen found that the DeLay Legal Expense Trust had collected $1 million from its inception in 2000 through the end of last year. Of that, $352,000 was from members of Congress and their political action committees, and $646,721 consisted of corporate money and donations from individuals and ideological organizations. Citizens for Responsibility and Ethics in Washington, a coalition of eight government watchdog groups, said the donations suggest the lawmakers are there to serve as "Mr. DeLay's defenders."

Democrats and public interest groups said that changes made to the composition of the committee made it unlikely that DeLay's power would be threatened by committee action, no matter how many questions are raised about his activities.

House Minority Leader Nancy Pelosi (D-Calif.) said the removal of Hefley sent "a chilling message to members who value upholding the highest ethical standard over partisan loyalty."
Fred Wertheimer, president of the watchdog group Democracy 21, said Hastert had "seriously damaged the integrity of the House as an institution and his own credibility as the leader of the House."

Hefley said he "would not have changed the committee members, because I've sat there and watched them work with great integrity."

© 2005 The Washington Post Company