Conspiracy to violate state election code

The September 28, 2005, indictment of House Majority Leader Tom DeLay (R-Texas) and "two political associates", John Colyandro and Jim Ellis, all three charged with "conspiracy in a campaign finance scheme," raises the question as to whether the conspiracy to violate state election code extends beyond the Texas border, bypassing other states' laws.


 * Money Laundering: "Making a campaign contribution to an elected official (or to a campaign committee, PAC, or political party) through one or more third parties -- as a device for disguising the source of a contribution and getting around contribution limits."

The DeLay Method
DeLay, E.J. Dionne wrote, September 30, 2005, "was a pioneer in something entirely new: a fully integrated political apparatus that linked Republican Party committees, lobbyists, fundraisers, corporations, ideological organizations and the process of governing itself."

Although "Texas law forbids the use of political donations from corporations for anything but administrative expenses," DeLay has "stood firmly against any legislation that would hamper or regulate the free flow of political money to politicians." 

In Missouri
A consent decree between Roy Blunt's Rely on Your Beliefs Fund and the Missouri Ethics Commission, dated May 23, 2002, "reveals that the basic scheme that DeLay and TRMPAC were indicted for [September 29, 2005,] in Texas was perfected" as early as 1999 and 2000 by Blunt, DeLay and Ellis in Missouri. 

Bruce Rushton outlined the scheme in the October 3, 2001, River Front Times.

In Alabama
In 2002, at the "same time that House majority leader Tom DeLay allegedly conspired to send $190,000 in corporate money through the Republican National Committee to candidates for the Texas Legislature," Michael Scanlon, who "was working with Washington lobbyist Jack Abramoff on behalf of Indian gaming tribes" and one of DeLay's former aides, made "an even larger donation to the Republican Party," Michael Kranish wrote in the October 1, 2005, Boston Globe.

A "donation of $500,000" in checks from Scanlon's company Capitol Campaign Strategies within weeks "showed up" at the Republican Governors Association as a $600,000 check written by the Republican Party to Bob Riley, "the Republican candidate for Alabama governor."

"One of Abramoff's top clients was a Mississippi Indian tribe, the Choctaws, which hoped to stop or slow the expansion of legalized gambling in neighboring Alabama," Kranish wrote. "Riley opposed the expansion of gambling and thus was favored in the election by the Choctaws. Scanlon, in addition to having once worked for DeLay, also had once worked as a staff member for Riley."

"'It is similar' to the DeLay case, said Melanie Sloan, director of Citizens for Responsibility and Ethics in Washington, arguing that that donation's purpose, as in the DeLay case, was to bypass state laws.

"Under Alabama law, a person can give unlimited funds to a state candidate, but a corporation can give no more than $500 per election cycle, according to a spokesman for the Alabama secretary of state. Scanlon's group would have been banned from contributing anything more than $500 to Riley," Kranish wrote.

For background, see the Abramoff-Reed Indian Gambling Scandal article.

Quotes
"In short, soft money fundraising and spending is making a mockery of virtually every campaign finance law on the books - including the laws governing contributions by individuals to Federal candidates; contributions by individuals to parties; aggregate Federal contributions by individuals in a year; the ban on expenditures of corporate and labor treasury money on Federal contributions and campaign advertisements; and disclosure of non-party electioneering spending.

"The shredding of our campaign finance laws in its own right gives rise to cynicism among the American people. But more importantly, the ever-escalating soft money arms race engenders precisely the scandals and corrupt appearances that the laws on the books were designed to prevent." --Testimony of Congressmen Christopher Shays and Marty Meehan Before the House Administration Committee, May 1, 2001.

How does campaign money laundering work?
"Typically, money laundering works like this: I give you $25,000; you deposit it into your bank account, and then write Candidate X $25,000 with your own check. You don't tell Candidate X that it is not really your money. Candidate X reports you on his or her campaign statements as the donor, and the public and the candidate's opponents have no idea that I was the true source of the money.

"What do donors get for their money? A small percentage of donors really want their candidate to win. A larger number want access to the candidate or officeholder. People who raise funds also get immediate access and influence if they bring in large amounts of money." 

Related SourceWatch Resources

 * bundling
 * Bush administration and the Enron connection
 * Bush administration cronyism and incompetence
 * Bush's Rangers
 * Doc Hastings
 * Eric Cantor
 * follow the money
 * Help Americans Vote Act
 * McCain-Feingold
 * Mike Ferguson
 * money laundering
 * Republican 'culture of corruption'
 * soft money
 * U.S. election irregularities

Websites

 * Campaign Legal Center website.
 * PoliticalMoneyLine website.

Documents & Reports

 * Bipartisan Campaign Reform Act of 2002, 107th Congress, 2D Session H.R. 2356, An Act to amend the Federal Election Campaign Act of 1971. (McCain-Feingold).
 * "Congressional Leaders’ Soft Money Accounts Show Need for Campaign Finance Reform Bills. First of Public Citizen Reports on '527' Groups Reveals Corporate Influence on Broadband, Tobacco and Money-Laundering Policies," Public Citizen's Congress Watch, February 2002.
 * "Public Citizen Calls for Investigation of John Ashcroft and the Possible Violation of Campaign Finance Laws," Public Citizen US Newswire/Letter, January 15, 2004. Contains links to supporting documents.
 * "Tom's Tainted Team. An analysis of House Members who side with DeLay and MTBE special interests over their constituents," League of Conservation Voters, April 21, 2005.
 * David Hogberg, "Something Smells At Pew. Inside Its Manipulative, Big-Money Campaign for 'Campaign Finance Reform'," Capital Research Center, June 2005.

Articles & Commentary

 * Clinton Re-election Campaign, Washington Post file.
 * Dave Sheingold and Ed Tagliaferri, "Millions funneled through loopholes," The Journal News (USA Today), 1999. "... to political parties' 'housekeeping' accounts."

2003

 * "GOP consultant had $500,000 contract with Enron," Associated Press (Houston Chronicle), March 10, 2003: re Karl Rove and Bush-Cheney '04 Inc.: "Enron Corp., signed contracts with GOP consultant Ralph Reed worth more than half a million dollars..."

2004

 * "Prosecutors Look Into Possible DeLay PAC Violations," Associated Press (Fox News), February 26, 2004.
 * Doug Heller and Jamie Court, "Accounting Fraud," ArnoldWatch.org, February 3, 2004.
 * R.G. Ratcliffe, Houston Chronicle: "Old law gives DeLay new trouble. Travis DA investigates if committee violated 1907 ban on using corporate funds in elections," Texans for Public Justice, March 1, 2004.
 * jesselee, "NRCC fined $288,000 for Campaign Finance Law Violation," The Stakeholder, April 9, 2004.
 * Scott Gold, "E-Mails Suggest DeLay's Hands Not So Clean," Los Angeles Times (Tampa Tribune), June 13, 2005.
 * R. Jeffrey Smith, "DeLay's Corporate Fundraising Investigated. Money Was Directed to Texas GOP to Help State Redistricting Effort," Washington Post, July 12, 2004.
 * Todd J. Gillman and Christy Hoppe, "As DeLay raises cash, critics raise questions," Dallas Morning News (CREW), July 16, 2004.
 * Press Release: "Campaign Finance Groups File FEC Complaint Charging Progress for America Voter Fund is in Violation of Federal Campaign Finance Laws," Campaign Legal Center, July 21, 2004. re Progress for America.
 * Editorial Board, "Indictments to test Texas campaign laws," Austin American-Statesman, September 22, 2004.
 * "DeLay: Probe 'Isn't About Me'," Associated Press (Fox News), September 22, 2004.
 * Editorial: "Follow campaign cash and you may end up -- surprise, surprise -- at redistricting," Lufkin Daily News, September 23, 2004.
 * Jake Berstein and Dave Mann, "Republican mischief in Texas. In a continuing investigation, a grand jury indicts three of Tom DeLay's top fundraising associates and a handful of companies for money laundering and other felonies," Salon, September 22, 2004.
 * Editorial: "DeLay on DeLay," Waco Tribune, September 23, 2004.
 * Sheryl Gay Stolberg, "DeLay Is Faulted by Ethics Panel for Second Time," New York Times, October 7, 2004.
 * Laylan Copellin, "DeLay denies key role in political group. Documents boast of his strategic importance, but he downplays his part," Austin American-Statesman, October 10, 2004.
 * "Republicans Operatives Make Court Appearance," Associated Press (Tyler Morning Telegraph), October 11, 2004.
 * Jonathan York, "Finance issues broad in races. Donors, spending spark contention," Daily Texan Online, November 2, 2004.
 * Brian Cook, "Souls for Sale," In These Times, December 3, 2004.
 * "Company to Aid in DeLay Corruption Probe," Associated Press (ABC News), December 10, 2004.
 * Laylan Copelin, "Republican wants to give state agency power over election code prosecutions. Bill would give ethics commission veto in local prosecutions," Austin American-Statesman, February 9, 2005: "House Bill 913 would prohibit a prosecutor from pursuing charges if the state office determines there is no criminal offense."
 * Sylvia Moreno, "DeLay PAC Trial Looks at Money-Laundering Claims," Washington Post, March 4, 2005.
 * "Smells Like Beltway. The real reason Tom DeLay is in political trouble," Opinion Journal, March 28, 2005: "The problem, rather, is that Mr. DeLay, who rode to power in 1994 on a wave of revulsion at the everyday ways of big government, has become the living exemplar of some of its worst habits."
 * Josh Marshall, "It's true: Targeting DeLay is just the start," The Hill, April 14, 2005.
 * Gary Heinlin, "Donors skirt campaign finance law," The Detroit News (WZZM13), April 17, 2005.
 * Jim Larson, "Dems target Racicot," The Billings Outpost, April 21, 2005. re Marc F. Racicot.
 * Mark Benjamin, "Golfing with Tom DeLay," Salon, May 2, 2005: "Playing through campaign finance laws, corporations are buying time with the House leader by donating to his foundations for abused kids. Meanwhile, the charities are spending more on the golf fundraisers than on the children."
 * Scott Gold, "Court Files Shed Light on DeLay's PAC Ties," SF Indymedia, June 12, 2005.
 * R. Jeffrey Smith, "DeLay PAC Is Indicted For Illegal Donations. Corporate Gifts Aided GOP in Texas Races," Washington Post, September 9, 2005.
 * Laylan Copelin, "Texas Republican PAC officials indicted. Travis County grand jury returns more charges against Ellis and Colyandro," Austin American-Statesman, September 14, 2005.
 * "Tom DeLay and the RNC: For the Love of Money," dnc.org, September 16, 2005.
 * Anne E. Kornblut, "How a Tested Campaign Tool Led to Conspiracy Charges," New York Times, September 29, 2005.
 * Michael Kranish, "RNC donation raises questions on federal monitoring," Boston Globe, October 1, 2005.