Sunday, January 08, 2006

Officials Focus on a 2nd Firm Tied to DeLay

The New York Times
Officials Focus on a 2nd Firm Tied to DeLay

WASHINGTON, Jan. 7 - Having secured a guilty plea from the lobbyist Jack Abramoff, prosecutors are entering a new phase of the corruption investigation in Washington and are focusing on a lobbying firm that has even closer ties to Tom DeLay, the former House majority leader who is under scrutiny in the scandal.

The firm, Alexander Strategy Group, is of particular interest to investigators because it was founded by Edwin A. Buckham, a close friend of Mr. DeLay's and his former chief of staff, and has been a lucrative landing spot for several former members of the DeLay staff, people who are directly involved in the case have said.

Although the firm's name has circulated in connection with the case for many months, prosecutors' questions about Mr. Buckham and Alexander Strategy - which did not respond to requests for comment - have intensified recently, participants in the case said.

The firm openly promoted the idea that it could deliver access to Mr. DeLay, who has denied any wrongdoing but abruptly announced Saturday that he would not try to regain his leadership post. Now the very connections with Mr. DeLay that formed the backbone of Alexander Strategy, put together with Mr. Abramoff's help, have put the future of the firm in doubt.

While doing business with lobbyists is routine for most lawmakers, investigators are looking at the extent to which Mr. DeLay and other lawmakers may have accepted trips, campaign donations and other favors from Alexander Strategy, and in turn tried to help the business.

Still, prosecutors may have a difficult time reaching the high legal threshold required in a bribery case, in which it must be established that lawmakers performed official acts in exchange for specific favors, rather than as a result of an ongoing relationship with an outside lobbyist.

It is unclear whether any single action by the firm has caught investigators' attention so much as its overall pattern of activity.

Details of the ties between Alexander Strategy, Mr. DeLay and Mr. Abramoff - who pleaded guilty last week in federal court and is cooperating with investigators - have already begun to trickle out. Alexander Strategy paid Mr. DeLay's wife $115,000 in consulting fees while conducting business with Mr. Abramoff's firm. Mr. Abramoff also referred clients to Mr. Buckham.

Mr. Buckham and the firm also shared clients - among them an entity in Malaysia and the Choctaw Indian tribe in Mississippi - with Mr. Abramoff, who in his plea agreement admitted to using corrupting tactics with lawmakers on behalf of his clients. Mr. Abramoff also admitted to having defrauded his Indian clients of millions of dollars. At one point, Mr. Buckham even sought to hire Mr. Abramoff himself, participants in the case said.

Mr. Buckham and at least one member of his firm worked with domestic and overseas clients who prosecutors suspect helped funnel money and perks to Mr. DeLay, his fund-raising operations and other lawmakers in ways intended to curry favor with the Republican leadership.

And at one time, Americans for a Republican Majority, or Armpac, the leadership committee that raised money for Mr. DeLay, was run out of the offices of Alexander Strategy.

But the firm's web of contacts on Capitol Hill reaches past Mr. DeLay, making Alexander Strategy a potentially useful resource as investigators examine other lawmakers.

The firm's name surfaced at the periphery of the corruption investigation into Representative Randy Cunningham, Republican of California. Mr. Cunningham resigned after pleading guilty to accepting bribes from a defense contractor that did business with Alexander Strategy.

For years, Alexander Strategy was one of the crown jewels of the so-called K Street project, an effort Republicans began after taking control of Congress in 1994 to dominate the lobbying industry. The hope, exemplified by Mr. Buckham's company, was for Republican lobbyists to harness the power of their corporate clients to help keep the party in power for years to come.

The successful history of Alexander Strategy since its founding in the late 1990's offers a window into the nexus of Mr. Abramoff, Mr. DeLay and the lobbying world over the last decade or so of Republican control of Congress.

As Mr. DeLay grew more powerful in Congress, the lobbying firm rose in prominence on K Street, building an impressive roster of clients for such a young company and earning, according to records, about $8.8 million lobbying in 2004. That ranked it in the middle of the pack among Washington's largest lobbying firms, but its client list - including Microsoft, United Parcel Service, Time Warner, Freddie Mac and Eli Lilly & Company - suggests what was, at least at one time, a powerful and well-connected operation.

And Mr. DeLay, so intertwined with the lobbying world that his extensive network of allies and former aides scattered throughout town is nicknamed "DeLay Inc.," responded more quickly to calls from Alexander Strategy than he did for any other firm, former aides of his said.

One element prosecutors are trying to understand is what role Mr. DeLay played in sending business to the company. There is evidence, one participant in the case said, that it was "you hire these guys because Tom DeLay tells you to."

Mr. Buckham also ran the U.S. Family Network, a self-styled grassroots organization tied to Mr. DeLay that, according to The Washington Post, was financed almost entirely by clients and associates of Mr. Abramoff. People involved in the case said they expected investigators to examine whether Mr. DeLay cast a vote in Congress in exchange for donations to the network.

Another critical component of the investigation is the activities of Tony C. Rudy, a former DeLay deputy chief of staff who went to work with Mr. Abramoff as a lobbyist before joining Mr. Buckham at Alexander Strategy, where he still works. Mr. Rudy is mentioned - named only as "Staffer A" - in Mr. Abramoff's plea agreement, and investigators are looking into whether he helped secure legislative favors for Mr. Abramoff's clients in exchange for gifts and the promise of a future job while he was still on the DeLay staff.

Mr. Buckham and others from the firm have not responded to inquiries, and Mr. DeLay, through his spokesman, has said he is innocent of wrongdoing. Although investigators are looking at as many as a dozen lawmakers in the inquiry, they have not brought charges against them.

Richard Cullen, a lawyer for Mr. DeLay, pointed out that Mr. Rudy had not been named outright in any court documents.

"But if it turns out to be Mr. Rudy," Mr. Cullen said, "and if what Mr. Rudy did turns out to have been in any way improper, Tom DeLay is going to be very sad and very disappointed. Because he will feel betrayed, and he expects much, much more from his staff than activities like that."

As a result of Mr. Buckham's ties with Mr. DeLay and Mr. Abramoff, investigators are "keenly interested" in him, especially in connection with deals he may have brokered with Mr. DeLay and other lawmakers after going into the private sector, one participant in the case said.

"He allows the connection to be made to DeLay," another participant said of Mr. Buckham. All participants in the case were granted anonymity in interviews because Justice Department officials do not want people talking about it publicly.

Alexander Strategy's name has also surfaced in the course of a corruption investigation that implicates the defense lobbyist Brent Wilkes, who is an unnamed co-conspirator in the criminal case against former Representative Cunningham. Mr. Cunningham pleaded guilty in December to accepting $2.4 million in bribes from Mr. Wilkes and others. Mr. Wilkes's firm, Group W, also hired Alexander Strategy to do lobbying work, and Mr. DeLay used a plane partly owned by Mr. Wilkes.

The scandals swirling around the Alexander franchise, composed of roughly two dozen lobbyists at its offices on the waterfront in Georgetown, have delighted its former rivals while triggering concerns in the lobbying community that the entire business may be tarred.

Dick Armey, the former Republican House majority leader, who now works for the firm DLA Piper Rudnick Gray Cary and who clashed with Mr. DeLay in the House, invoked Charles Dickens, likening Mr. DeLay to Fagin and Mr. Buckham to the Artful Dodger in "Oliver Twist."

"Tom DeLay sent Buckham downtown to set up shop and start a branch office on K Street," Mr. Armey said. "The whole idea was, 'What's in it for us?' That's what I thought at the time, and I've seen nothing in the way they've conducted themselves since then to dissuade me from that point of view."

Mr. DeLay and a group of like-minded Republicans have spent years promoting Republicans for top lobbying positions in an attempt to counter decades in which Democrats controlled both Congress and K Street. The effort has caused several dustups over the years.

Mr. DeLay was rebuked by the House ethics committee in 1999 after allegedly badgering a trade association that chose a Democrat as its president, rather than the Republican candidate he favored.

Mr. DeLay's political action committee paid Alexander Strategy more than $300,000 for fund-raising and consulting services from 2000 to 2003, according to the Center for Public Integrity, a nonprofit group that tracks money in politics. In addition to Mr. Rudy, the firm also employed Karl Gallant, who headed Mr. DeLay's political action committee.

The firm has already been dropped by one client, MGM Mirage, the casino and resort giant, which retained it in 2004, paying about $350,000 to help block a maneuver by an Indian tribe in Michigan.

At the end of last year, MGM ended the relationship. Alan Feldman, a spokesman for MGM, said that the project had ended and that the firm's services were no longer needed. But Mr. Feldman acknowledged that the scrutiny surrounding Alexander Strategy was a concern. "It would be dishonest to say that it didn't come up in discussions," he said.

Other lobbyists and participants in the case said it would be difficult for the firm to survive this type of scrutiny with all of its clients and relationships intact.

"It's a double-edged sword, being known as DeLay Inc.," said one Republican lobbyist. "They are on the sharp edge of the sword now."