A Texas grand jury yesterday indicted three of House Majority Leader Tom DeLay’s (R-Texas) operatives on criminal charges of money laundering and illegally accepting campaign contributions from corporate donors.
Also indicted were a number of companies and one trade group that had given to Texans for a Republican Majority PAC, a group founded by DeLay in 2001. The companies include Sears, Roebuck and Co.; Bacardi USA; Cracker Barrel; Diversified Collection Services; Questerra Corp.; Williams Companies; Westar Energy; and the Alliance for Quality Nursing Home Care. Those companies donated a total of $320,000 to TRMPAC in 2002.
The DeLay operatives who were indicted were Jim Ellis, head of Americans for a Republican Majority PAC, DeLay’s federal leadership PAC; John Colyandro, former head of TRMPAC; and Warren RoBold, a DeLay fundraiser based in Washington.
Overall, the grand jury issued 32 criminal indictments related to its investigation of TRMPAC’s activities in the Lone Star State during the 2001-02 election cycle.
The indictments allege that Colyandro, Ellis and RoBold violated Texas’ ban on corporate donations by accepting hundreds of thousands of dollars from big companies and trade associations and then using those funds in state legislative races. Also, among the charges is an allegation of money laundering against Ellis and Colyandro related to a $190,000 soft money-hard money swap with a Republican National Committee organization that later sent funds directly to Texas GOP candidates. That exchange took place in September 2002.
In all, Colyandro faces 14 indictments, RoBold nine and Ellis one.
The companies and nursing home trade group were indicted for violating the corporate-donation ban.
DeLay himself has never been subpoenaed in the investigation, which is being run by Travis County District Attorney Ronnie Earle, a Democrat.
Speaking to reporters yesterday, DeLay called the grand jury’s actions “regrettable,” and denied any role in the day-to-day operations of TRMPAC.
“This just emphasizes what I’ve been saying all along — this investigation isn’t about me,” said DeLay, pointing out that he has not been asked to testify or provide information in the case.
DeLay also suggested that the Texas investigation was a partisan witch hunt by Earle, and said Democrats have engaged in similar tactics in the past. DeLay pointed to racketeering lawsuit filed against him in 2000 by the Democratic Congressional Campaign Committee, later dropped, as being along the same lines as yesterday’s indictments.
“This is 41 days before the election. You do the political math,” said DeLay, who added: “I don’t see it hurting my effectiveness.”
Earle, for his part, rejected suggestions that he is running a politically motivated investigation, and said his lengthy review of TRMPAC’s operations convinced him that state laws had been broken.
“What has emerged is the outline of an effort to use corporate contributions to control representative democracy in Texas,” said Earle in a statement released by his office. Gregg Cox, who runs the public integrity unit of the Travis County’s D.A.’s office, added that more indictments are possible. “This is a continuing investigation into allegations of criminal activity related to the 2002 Texas elections,” Cox said.
Tuesday’s indictments, the result of a two-year probe by Earle, could pose a significant public-relations problem for DeLay, and come at a particularly sensitive time for the House Majority Leader.
The House ethics committee may vote as early as next week on whether to proceed with its own investigation of DeLay on allegations of illegally soliciting corporate contributions, misusing TRMPAC to launder illegal corporate contributions, and abusing the powers of his office during the Texas redistricting fight. Rep. Chris Bell (D-Texas) filed the complaint with the ethics committee that triggered its review of the charges.
While the ethics committee will not base its decision on whether to move forward with an investigation of DeLay based upon what happens in Texas, the indictments could put further pressure on Reps. Joel Hefley (R-Colo.) and Alan Mollohan (D-W.Va.), the chairman and ranking Democrat, respectively, on the panel, to authorize their own probe, according to Democratic and GOP insiders.
Bell issued a statement exhorting the ethics committee once again to take up his complaint.
“These indictments are clear indication that the ethics complaint against Mr. DeLay is substantive and extremely serious,” said Bell. “Anything less than a full investigation would signify a failure on the part of the [ethics committee] to fulfill their responsibility to protect the integrity of the House.”
DeLay has strongly denied Bell’s allegations, and recent indications are that the ethics committee is unable to come to a decision on whether to proceed with the complaint and could end up deadlocked, which would result in no investigation.
DeLay’s allies in Texas are also finding themselves under fire because of the Earle probe.
Several Texas-based watchdog groups, including Texans for Public Justice, Common Cause Texas and Public Citizen Texas, called on Texas House Speaker Tom Craddick (R) to step down due to his involvement with TRMPAC.
Craddick received extensive help from TRMPAC during the 2002 cycle, including funneling $152,000 from TRMPAC to 14 Texas GOP candidates. With the Republican victory that year in the Lone Star State, fueled in part by millions in corporate dollars, Republicans were able to gain control of the Texas legislature for the first time since Reconstruction, and Craddick became Speaker.
Craddick and DeLay then pushed through a redistricting plan last year that may cost Democrats as many as five seats in the U.S. House this fall.
“The dark cloud over Tom Craddick’s speakership just got darker,” said Craig McDonald of Texans for Public Justice. “Tom Craddick, who was near the center of TRMPAC’s operations, should step down as speaker until the legal system gets to the bottom of what happened in 2002.”
Craddick’s office declined to comment.
Representatives from several of the corporations caught up in the TRMPAC investigation defended their donations to the group as legal and allowable under Texas law, and some Austin-based lawyers are privately unsure if Earle has overreached.
“Cracker Barrel Old Country Store made a $25,000 donation to the political action committee Texans for a Republican Majority [TRMPAC] in September of 2002,” said Julie Davis, the company’s communications director. “We believed then and we believe now that this contribution was legal. In general, I can tell you that Cracker Barrel’s policy is to respect and follow all laws that govern political contributions.”
A spokesman for Illinois-based Sears, Roebuck and Co. also rejected claims that the company had violated Texas law.
“I can tell you we are surprised by the indictment because Sears’ contribution to this PAC followed all applicable state and federal laws,” said Chris Bradley, a company spokesman. Bradley said Sears has fully cooperated with investigators in the matter.
“We plan to vigorously defend the company in this case,” Bradley said.
Ben Pershing and Ethan Wallison contributed to this report.