Wednesday, September 22, 2004

3 DeLay Aides Facing Charges in Fund-Raising

The New York Times
September 22, 2004
3 DeLay Aides Facing Charges in Fund-Raising

WASHINGTON, Sept. 21 - Three aides who helped run a political action committee created by the House majority leader, Representative Tom DeLay of Texas, were indicted by a grand jury in Texas on Tuesday on charges that included raising illegal corporate contributions and funneling them to state candidates during the 2002 elections.

Eight companies were also charged, including Sears Roebuck & Company and Cracker Barrel Old Country Store Inc.

The 32 separate indictments sprang from a two-year investigation by local prosecutors into Texans for a Republican Majority P.A.C., a political action committee created by Mr. DeLay that spent $1.5 million to help Republicans gain control of the Texas House. The Legislature later redrew the boundaries of the state's Congressional districts in favor of Republicans, which helps the party maintain control of Congress.

The charges against the aides come at a time when Mr. DeLay himself is under investigation by the House ethics committee over accusations of improper fund-raising. News of the indictments led to fresh calls for the committee to move forward with its inquiry.

At his regular weekly press briefing on Tuesday, Mr. DeLay dismissed the indictments as politically motivated, insisting that he had no knowledge of the day-to-day workings at the political action committee and that he had played no role in determining how it spent money. The majority leader, who has repeatedly said he was not a target in the Texas investigation, seemed calm and collected as reporters strafed him with questions.

"This just emphasizes what I've been saying all along, that this investigation isn't about me,'' he said. "I haven't been asked to testify, I haven't been asked to provide any records, I haven't been asked to come as a witness.''

But critics say the charges are an ominous development for one of the most powerful figures in Congress, whose fund-raising strategies have been repeatedly questioned by Democrats and campaign finance watchdogs over the years, even as he rose through the Republican ranks to become the second most powerful Republican in the House.

"This first round of indictments reaches directly into DeLay's inner circle,'' said Craig McDonald, executive director of Texans for Public Justice, the group that filed a complaint that helped lead to the Texas investigation. "The cloud hovering over DeLay just got several shades darker.''

The indictments say Texans for a Republican Majority P.A.C. raised corporate contributions that were illegal under Texas laws and directed the money to state candidates by using other organizations as a conduit, according to prosecution documents.

The indictments say the P.A.C. gave $190,000 to a committee controlled by the Republican National Committee, along with a list suggesting which state candidates the committee should contribute to and in what amounts, documents say. The indictments say the Republican National Committee, through the same committee, later made $190,000 in contributions to seven candidates for the Texas House of Representatives.

James W. Ellis, 47, of Virginia, a top DeLay aide and one of the committee's officers, was charged with money laundering in a single indictment, documents say. The indictment says he was the one who presented the check and the list to the Republican National Committee.

The committee's executive director, John D. Colyandro, 40, of Texas, was charged with illegally accepting corporate contributions in 13 indictments and a 14th indictment charged him with money laundering, documents say.

And a fund-raiser for the committee, Warren M. Robold, 48, of Maryland, was changed in nine indictments with soliciting and receiving illegal corporate contributions, documents say.

Officials at the Republican National Committee could not be reached for comment on Tuesday.

The grand jury also indicted eight companies, accusing them of making illegal contributions to the committee, ranging from $25,000 to $100,000. They are: Sears, Bacardi U.S.A. Inc., Westar Energy Inc., Cracker Barrel Old Country Store, Williams Companies Inc., the Questerra Corporation, Diversified Collection Services Inc. and Alliance for Quality Nursing Home Care Inc.

Texas prosecutors say the investigation is continuing.

"What has emerged is the outline of an effort to use corporate contributions to control representative democracy in Texas," said Ronald Earle, the district attorney in Travis County. Mr. Earle, a Democrat, would not say whether Mr. DeLay was a target of the investigation. "Anybody who has committed a crime in this context is a target," he said.

In an interview earlier this year, Mr. Ellis said that he, Mr. DeLay and Mr. Colyandro had created Texans for a Republican Majority P.A.C. and that Mr. DeLay served on a five-member advisory board that decided which candidates to endorse.

Mr. Ellis is executive director of Mr. DeLay's own political action committee, Americans for a Republican Majority. Mr. DeLay said Tuesday that though he often talked to Mr. Ellis about how the Texas committee was faring he had "no idea about the day-to-day operations'' of the committee.

He added, "All I did was help raise money."

In Washington, Mr. DeLay is the subject of a complaint before the House ethics committee that is deeply intertwined with the Texas investigation - and with Texas politics. The complaint, filed by Representative Chris Bell, a Texas Democrat who lost his primary race after the redistricting, accuses the majority leader of illegally soliciting campaign contributions, laundering campaign contributions to influence state legislative races and improperly using his office to influence federal agencies.

Mr. DeLay has said there is no substance to the accusations. But on Tuesday, Representative Bell said the Texas indictments "are clear indication that the ethics complaint against Mr. DeLay is substantive and extremely serious." He called upon the ethics panel to move forward with a full inquiry.

Whether the committee will do so, however, is unclear.

On Monday, the committee's chairman, Representative Joel Hefley, Republican of Colorado, and its senior Democrat, Representative Allan B. Mollohan of West Virginia, announced that they had finished a 90-day period of "fact-gathering activities" and would soon turn their findings over to the full committee, which will make a decision about whether to proceed.

But the committee membership is equally divided between Democrats and Republicans, raising the possibility that it will deadlock along party lines.

On Tuesday, Representative Steny H. Hoyer of Maryland, the Democratic whip, told reporters the committee should pursue the allegations.

"They ought to pursue this for the Congress's sake and for the American public's sake, and I would hope they would do that," Mr. Hoyer said.