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DeLay made habit of moving funds between causes

By wire services
Published October 6, 2005

WASHINGTON - Tom DeLay deliberately raised more money than he needed to throw parties at the 2000 presidential convention, then diverted some of the excess to longtime ally Roy Blunt through a series of donations that benefited both men's causes.

DeLay's private charity, the consulting firm that employed DeLay's wife and the Missouri campaign of Blunt's son all ended up with money, according to campaign documents reviewed by the Associated Press.

Jack Abramoff, a Washington lobbyist recently charged in an ongoing federal corruption and fraud investigation, and Jim Ellis, the DeLay fundraiser indicted with his boss last week in Texas, also came into the picture.

The complicated transactions are drawing scrutiny in legal and political circles after a grand jury indicted DeLay, alleging that he violated Texas law with a scheme to launder illegal corporate donations to state candidates.

The government's former chief election enforcement lawyer said the Blunt and DeLay transactions raise questions that should be investigated regarding whether donors were deceived or the true destination of their money was concealed.

"It seems to be a pattern with DeLay funneling money to different groups, at least to obscure, if not cover, the original source," said Lawrence Noble, who was the Federal Election Commission's chief lawyer for 13 years, including in 2000 when the transactions occurred.

None of the hundreds of thousands of dollars in donations DeLay collected for the 2000 convention were disclosed to federal regulators because the type of group DeLay used wasn't governed by federal law at the time.

DeLay has temporarily stepped aside as House majority leader after being indicted. Blunt - who had been majority whip, the No. 3 Republican in the House - has taken over much of that role in DeLay's absence.

Spokesmen for the two Republican leaders say they disclosed what was required by law and all their transactions were legal.

"It illustrates what others have said, that money gets transferred all the time. This was disclosed to the extent required to be disclosed by applicable law," said Don McGahn, a lawyer for DeLay. "It just shows that donors don't control funds once they're given."

Blunt and DeLay planned all along to raise more money than was needed for the convention parties and then route some of that to other causes, such as supporting state candidates, said longtime Blunt aide Gregg Hartley.

"We put together a budget for what we thought we would raise and spend on the convention and whatever was left over we were going to use to support candidates," said Hartley, Blunt's former chief of staff.

Hartley said he saw no similarity to the Texas case. The fact that DeLay's charity, Christine DeLay's consulting firm and Blunt's son were beneficiaries was a coincidence, Hartley said.

Much of the money changed hands in the spring of 2000, a period of keen interest to federal prosecutors.

During that same time, Abramoff arranged for DeLay to use a concert skybox for donors and to take a golfing trip to Scotland and England that was partly underwritten by some of the lobbyist's clients.

Prosecutors are investigating whether the source of some of the money was disguised, and whether some of DeLay's expenses were originally put on the lobbyist's credit card in violation of House rules.

Blunt and DeLay have long been political allies. The 2000 transactions occurred as President Bush was marching toward his first election to the White House, DeLay was positioning himself to be House majority leader and Blunt was lining up to succeed DeLay as majority whip.

The entities Blunt and DeLay formed allowed them to collect donations of any size and any U.S. source with little federal scrutiny.

DeLay's convention fundraising arm collected large corporate donations to help wine and dine Republican VIPs during the presidential nominating convention in Philadelphia in late summer 2000. DeLay's group has declined to identify any of the donors.

AUSTIN, Texas - A Travis County grand jury brought into the case against Rep. Tom DeLay at the last minute declined to indict the former House majority leader on money laundering charges last week, days before a brand new panel issued such an indictment.

The disclosure Wednesday prompted a DeLay attorney to accuse District Attorney Ronnie Earle of shopping for a pliable grand jury. The prosecutor has said new evidence became available over the weekend, bolstering the money laundering charge.

A grand jury whose term expired Friday formally announced its decision not to levy charges against DeLay and two his lieutenants, saying that it "failed to find a bill of indictment" against the men. The foreman for the panel declined to comment on why jurors decided as they did.

Earle's office has refused to describe the additional evidence presented to the new panel Monday, saying the investigation was continuing.

Information from the Associated Press and and Dallas Morning News was used in this report.

[Last modified October 6, 2005, 01:15:08]