House Majority leader Tom DeLay is not a physically imposing man. “Five-foot-seven if he’s wearing high heels,” in the words of Fort Bend County sheriff Milton Wright, whom DeLay once spent $70,000 to defeat in an election because the sheriff had hired a woman whose husband had sued DeLay. Yet in the decade since Republicans took control of the U.S. House of Representatives, the former exterminator from suburban Houston has achieved the political stature of the historical giants in Statuary Hall outside his Capitol office. He did it on his own, consolidating his political power and using it with a remarkable sense of purpose.
DeLay’s rapid ascent has been the result of more than hard work and a keen understanding of politics. He became majority whip and then majority leader by raising massive sums of money — a total of $12.6 million between 2000 and 2002 alone — and by strategically spending it on Republican candidates, in effect buying the loyalty of his colleagues. He has domesticated K Street, demanding loyalty and contributions from lobbyists in return for favorable treatment. And all along the way, he has strained, reinterpreted, and sometimes simply side-stepped ethics regulations in Washington and even in his home state of Texas, which has some of the nation’s loosest campaign finance laws.
Now, three separate sets of state and federal investigators are looking into whether DeLay and his associates may have finally crossed the line. They are trying to determine how the majority leader’s interlocking political action committees (PACs) work in concert with his protégés in the lobbying industry — a fundraising apparatus the Washington press corps refers to as “DeLay Inc.” They are also considering allegations that this elaborate operation broke state and federal laws — allegations that have prompted DeLay to hire criminal defense attorneys and raise money for a legal defense fund.
Two civil suits filed in Austin allege that DeLay’s Texas political action committee raised hundreds of thousands of dollars through illegal means. A parallel criminal investigation by Austin’s district attorney, Ronnie Earle, has already led to the indictment of DeLay’s top Texas fundraisers — and Earle is not ruling out the possibility that DeLay himself could be a target of the investigation. And the Senate Indian Affairs Committee has subpoenaed records on two DeLay associates who used their access to “the Leader” to secure $45 million in lobbying and consulting fees from four Indian tribes. A federal grand jury in Washington, D.C., is also investigating those fees.
By itself, none of the inquiries is an immediate threat to DeLay’s power as majority leader. But together, they threaten to expose — and perhaps even unravel — the machine he has been building since first getting elected to Congress in 1984.
The muscular tactics that earned DeLay the nickname “the Hammer” have gained the fear and respect of his Republican colleagues. He won his first top leadership position by defeating Newt Gingrich’s candidate for majority whip in 1994. After Gingrich resigned as speaker four years later, DeLay used the political machine he had created to make Dennis Hastert, his deputy whip, the only viable candidate in the race. In 2002 DeLay was elected majority leader without a whisper of challenge.
Today DeLay controls a leadership PAC substantially larger than the PAC that Speaker Hastert operates. He directs more campaign money to Republican candidates than does Hastert. He has such firm control of K Street that many lobbying firms won’t fill important positions without consulting his office.
Nor is DeLay afraid to openly defy the Bush administration. Since being elected majority leader, he has killed the Bush-backed energy bill because it didn’t contain his pet provision; flown to Israel to criticize the president’s Middle East policy for being too soft on the Palestinians; and told reporters that the low-income tax credit Bush ordered the Republican Congress to get “to my desk” in 2003 “ain’t going to happen.” (It didn’t.) He can kill or rescue legislation, as he demonstrated when he became personally involved in “whipping” the $400 billion Medicare prescription drug bill last November. “I am the federal government!” DeLay told a restaurant manager last year, according to the Washington Post, when he was asked to put out his cigar to comply with federal law. It’s easy to see why he might think so.
As his stature has increased, DeLay’s tactics have grown bolder and more aggressive — and therein may lie the seeds of his present troubles. Buried in the exhibits supporting the lawsuit filed against him in Austin is a letter that encapsulates the civil and criminal investigations threatening him. It’s addressed to a Texas-based political action committee, Texans for a Republican Majority (TRMPAC), but the salutation reads “Dear Congressman DeLay.” The letter is from the Williams corporation, a natural gas and pipeline company headquartered in Tulsa, Oklahoma. It says:
On behalf of the Williams Companies, Inc., I am pleased to forward our contribution of $25,000 for the TRMPAC that we pledged at the June 2, 2002 fundraiser.
With best wishes.
Deborah B. Lawrence
Vice President for Government Affairs
Enclosure: check $25,000
It’s difficult to violate Texas campaign finance law. Any individual can contribute any amount to any legislative candidate, as long as the contributions are properly disclosed. It’s the system that George W. Bush and Tom DeLay have said they would like to institute at the federal level (though Bush hasn’t mentioned it much since the 2000 presidential campaign).
One of very few things you cannot do under Texas campaign finance law, however, is accept a corporate donation to be used in a political campaign, with a narrow exemption for administrative expenses. In September, an Austin grand jury indicted Williams and seven other companies for making illegal contributions to TRMPAC; three DeLay fundraisers, including a key political aide, were also indicted.
The evidence Earle’s investigators presented to the grand jury isn’t public, but documents connected with the civil suits filed against TRMPAC lay out some of the details of the case. A deposition in one of the suits features accounts of turf disputes between TRMPAC’s fundraisers in Texas and Washington, both of whom try to claim credit for corporate donations; letters and testimony in the case also reveal that the fundraisers reassured donors that their contributions were “nondisclosable.” All in all, argues Earle, the evidence suggests “an illegal movement to basically steal an election by using illegal secret corporate donations to political campaigns.”
Earle is referring to a watershed moment in Texas politics — the 2002 election in which the state House of Representatives, after a carefully targeted campaign devised by DeLay and his associates, swung to the GOP. The new majority immediately proceeded to draw a new congressional district map designed to give DeLay half a dozen more Republican seats in Congress.
To engineer this fundamental shift in the state’s political landscape, DeLay and one of his top aides, Jim Ellis, created a brand-new political action committee — TRMPAC (“trim-pac”). Its initial contributions were unremarkable — $50,000 from DeLay’s leadership PAC, and $25,000 each from a Texas company and two businessmen including Bob Perry, the Houston home-builder who more recently underwrote the Swift Boat Veterans for Truth attack ads. But then, aware that past attempts to take control of the state House using only individual donations had come up short, TRMPAC’s fundraisers went corporate. In one particularly productive day, September 9, 2002, a Republican state representative and a TRMPAC official visited six corporate offices and garnered pledges for contributions to the committee or its targeted candidates that included $22,000 from the Compass Bank and $25,000 from Reliant Energy. The fundraisers’ schedule, obtained by the Texas Observer, includes an hour-by-hour account of the trip — along with notes explaining the political favors the donors wanted.
The committee spent $1.4 million on 21 races, putting Republicans in control of the House for the first time in 130 years, and toppling the Democratic speaker who stood in the way of an off-year redistricting bill. DeLay personally worked on the maps, creating districts designed to elect five to seven more Republicans to Congress. “I’m the majority leader,” he told the Washington Post, “and I want more seats.”
Republicans control every statewide office in Texas, so it appeared there was no one — other than lawyers filing civil suits — to challenge TRMPAC’s use of corporate money. But the PAC’s operatives had apparently overlooked Earle, a Democrat who has indicted a Democratic attorney general for bribery, indicted a Democratic speaker for failing to report illegal gifts, and successfully prosecuted Republicans for corruption.
Some of the issues Earle is investigating were first made public by the watchdog group Texans for Public Justice, which noticed an interesting discrepancy between the group’s federal and state filings: Roughly $600,000 of the $1.4 million TRMPAC spent in its campaign to change the majority in the Texas House had been reported to the IRS, but not to the state’s ethics commission. As it happened, the federal records showed that about $600,000 of the group’s money had come from corporate contributions, clearly identified as such by the PAC’s fundraisers. Texas law allows PACs to use corporate money for administrative purposes — that is, expenses that would be incurred by any business, such as office space, phone bills, and routine mailings. But phone banks to promote candidates and similar campaign expenses don’t qualify.
Ellis, the DeLay aide who helped set up TRMPAC, told the Texas Observer that there was a simple explanation for the discrepancy — the $600,000, nearly half of the committee’s total expenses, had been used exclusively for administrative purposes and therefore didn’t have to be reported to the state.
Ronnie Earle doesn’t buy it. The 62-year-old district attorney is approaching the end of 27 years in office and has said he would have retired were it not for this case. Earle has the somber countenance of a hanging judge and a sense of humor as arid as his West Texas origins. Investigating the TRMPAC case has been slow, he says, because it’s like “watching clowns climb out of a Volkswagen. There are a lot more in there than I imagined.” In fact, in addition to the indictments for making and accepting illegal corporate contributions, Earle has won grand jury indictments against Ellis and TRMPAC executive director John Colyandro for an even more serious offense — money laundering, a first-degree felony. In September 2002, TRMPAC sent the Republican National State Elections Committee $190,000 in what internal emails suggest was “soft,” or corporate, money. Three weeks later, the committee sent a total of $190,000 to candidates in Texas House races. Earle maintains that the money was moved through the national committee to conceal its illegal corporate origins; TRMPAC officials have insisted that the corresponding amounts were mere coincidence. The PAC sent the money to the national party, Ellis told the Texas Observer, because “we like what the party does.”
In the wake of the indictments, DeLay has maintained that he was not involved in running TRMPAC, and that he is not a target of the inquiry. Earle, for his part, will only say that the majority leader “is not a target if he hasn’t committed a crime. Whoever is guilty of a crime will be a target.”
But DeLay’s troubles aren’t limited to Texas. In February, Shawn Martin, an assiduous reporter who covers everything from plane crashes to parish council politics for the small daily in Lake Charles, Louisiana, broke a story that quickly got the majority leader’s attention. Two of DeLay’s associates, Jack Abramoff and Mike
Scanlon, had extracted a staggering $31 million in lobbying and consulting fees from the 800-member Coushatta Indian tribe of Louisiana — more than General Electric spent on all of its corporate lobbying efforts in the same three-year period. The pair also had lucrative contracts with tribes in other states, bringing its total for Indian lobbying up to $45 million in less than three years.
DeLay insists that he had nothing to do with Abramoff’s activities. If anyone was using his name to make money lobbying, he told reporters at a press briefing in February, he wanted them to “stop it immediately.”
But DeLay’s attempt to distance himself from Abramoff is a hard sell. Until the Indian billing scandal broke, Abramoff had been one of the most successful lobbyists in Washington. He was also an original member of the “kitchen cabinet” DeLay formed when he was elected majority whip in 1994 — a position that certainly did not hurt Abramoff’s lobbying practice. A tribal leader who has been critical of the fees told the Washington Post that Abramoff frequently talked about his close contacts with DeLay when discussing how he could help the tribes.
Abramoff also was DeLay’s go-to guy on Israel issues, and he was instrumental in DeLay’s push to make sure U.S. labor law could not be used to cover sweatshop workers in the Marianas, an American protectorate in the South Pacific. (Clothing made in sweatshops in the Marianas can be labeled “Made in U.S.A.”) At a 1997 dinner on the Marianas island of Saipan, according to the Dallas Observer, DeLay spoke of “one of my closest and dearest friends, Jack Abramoff, your most able representative in Washington.”
DeLay was also a mentor to Mike Scanlon, Abramoff’s partner on the tribal contracts, who had been on DeLay’s congressional staff and helped run the “war room” DeLay had set up to ensure Bill Clinton’s impeachment. Some of the millions Abramoff and Scanlon collected from the tribes appear to have ended up in GOP accounts, most notably a $500,000 contribution that Scanlon’s firm made to the national Republican Governors Association in 2002. Abramoff is a Bush Pioneer, having brought in $100,000 for the 2004 campaign. Tribal members have also said they were encouraged to donate to political campaigns and charities supported by Abramoff and Scanlon. One of the pair’s clients, the Mississippi Choctaws, for example, pitched in $1,000 to TRMPAC.
The tribal lobbying scandal has provided a rare window into the inner workings of DeLay’s fundraising system, especially the majority leader’s “K Street strategy.” In 1995, DeLay held meetings with lobbyists and showed them lists of their firms’ political contributions. He pointed out that Republicans were now in power, and that lobbyists’ political giving had better reflect their understanding of that fact. At the same time, DeLay and the House leadership effectively closed their doors to lobbyists who were former Democratic members of Congress and former Democratic staffers. (In 1998, DeLay pulled an intellectual property rights bill from the House floor in retaliation for the Electronic Industries Alliance’s hiring of a former Democratic congressman as its director.)
Conservative congressional scholar Norman Ornstein of the American Enterprise Institute described the K Street strategy as “Tammany Hall all over again,” a system in which even second-tier lobbyists earning $250,000 or less were vetted by the Republican leadership, and then were expected to contribute heavily to Republican candidates. The operation has never before been opened to public view, but the subpoenas in the Abramoff/Scanlon case are beginning to crack open one of Washington’s most powerful networks.
Senator John McCain, who holds DeLay in low regard, is now eight months into an inquiry at the Senate Indian Affairs Committee, where he has an investigator working full time on Abramoff and Scanlon. A grand jury in Washington is also looking at evidence related to Abramoff and Scanlon’s billing of the Indian tribes and filing subpoenas for the records of businesses and tribes connected to the two lobbyists. Even the moribund House ethics committee has been forced to consider complaints against DeLay, including one that focuses on a $25,000 contribution to TRMPAC from a Kansas utility. Internal company emails indicate that the contribution was made so the utility could “get a seat at the table” in negotiations over the federal energy bill. The committee, 4 of whose 10 members have received contributions from DeLay’s PAC, was expected to dismiss that complaint; a more serious problem for DeLay could arise from allegations that a $100,000 bribe was offered to a Republican congressman on the House floor in an attempt to swing his vote on the Medicare bill last November. “That probably didn’t happen without the backing of the leadership,” says a source familiar with the probe.
Late last year, Washington Times editorial page editor Tony Blankley was reminiscing about the fall of another seemingly invincible congressional figure — his former boss, Newt Gingrich. Gingrich was ousted as House speaker in 1998 not because of any single issue, Blankley said, but because he had been involved in too many fights and had faced too many allegations large and small, until the Beltway cognoscenti knew his power had been badly undermined.
Facing a broad, bipartisan assault on his political machine, and the risk that the paper trail could lead to his office, DeLay may find himself in a similar position. “These guys always skate too close to the edge,” says Fred Wertheimer, a veteran campaign finance reform advocate who has lodged complaints against DeLay with Congress and the IRS regarding allegations that DeLay set up a charity to cultivate political influence. “Ultimately, they all fall.”