Thursday, February 26, 2004

Prosecutors have been questioning a Capitol Who's Who about allegations that an alliance of Republican officials and business groups illegally used corporate donations to influence the 2002 legislative elections, according to subpoenas made public Wednesday.

Campaign inquiry engulfs Capitol

District attorney files more subpoenas -- public gets view of election-spending investigation

By Laylan Copelin, Austin American-Statesman
Thursday, February 26, 2004

Prosecutors have been questioning a Capitol Who's Who about allegations that an alliance of Republican officials and business groups illegally used corporate donations to influence the 2002 legislative elections, according to subpoenas made public Wednesday.

Travis County District Attorney Ronnie Earle's office publicly filed subpoenas that have been issued for testimony or records over the past several months. The demands for information stretch from Austin lobbyists to the Republican National Committee to officials with Texans for a Republican Majority, including the daughter of U.S. Majority Leader Tom DeLay.

Coming in the wake of subpoenas for records from Texas House Speaker Tom Craddick last week, the number of subpoenas that have been made public now stands at 58.

Prosecutors have also subpoenaed records involving the hiring of private investigators by Mike Toomey, currently Gov. Rick Perry's chief of staff. Before working for the governor, Toomey was a lobbyist helping pro-business allies elect Republican legislators.

Many of the subpoenas are for people who already have provided records or testimony in the secret grand jury proceedings. But the accountant for one of the groups, Texans for a Republican Majority, and an Akin Gump lobbyist are due to appear before a Travis County grand jury today.

Craddick's lawyer, Roy Minton, also is due to surrender documents today from the Midland Republican's 2002 campaign to lead the House.

The unveiling of the subpoenas is just the latest chapter in a lengthy investigation into the Texas Association of Business, Texans for a Republican Majority and Craddick. Wednesday's filings focused on Texans for a Republican Majority, a political action committee that DeLay and his allies used to help elect a Republican majority in the state House for the first time since Reconstruction.

Although the initial investigation centered on whether the state's largest business organization and DeLay's Republican Majority group illegally used corporate donations for political activities, the inquiry has broadened to determine whether groups illegally influenced the race for speaker.

Specifically, prosecutors are asking why Craddick distributed $152,000 in checks from DeLay's Texas group to House candidates who were crucial to Craddick's election as speaker.

Lawyers for Craddick and Texans for a Republican Majority say their clients are cooperating with the investigation. Austin lawyer Wayne Meissner represents the Republican Majority committee and its treasurer, former state Rep. Bill Ceverha of Dallas.

"Certainly Mr. Ceverha feels he followed the letter and spirit of all the relevant laws and regulations," Meissner said. "He was happy to be involved in electing a Republican majority."

Perry dismissed subpoenas by Earle, a Democrat, as a huge fishing expedition.

In Washington, DeLay has been criticizing Earle as a runaway prosecutor conducting a partisan witch hunt.

"Being called vindictive and partisan by Tom DeLay is like being called ugly by a frog," Earle said Wednesday.

Among the recipients of grand jury subpoenas filed Wednesday were:
  • Russell Anderson, the accountant for Texans for a Republican Majority, who has been asked to testify today. He already was subpoenaed for a list of 81 types of records, including financial records, copies of political polls, research, correspondence and documents concerning the committee's relationship with DeLay and other elected officials.
  • Demetrius McDaniel, an Akin Gump lobbyist, who has been summoned to the grand jury today in connection with corporate donations he made to the Republican Majority group on behalf of two clients: $2,500 from Primedia Inc., and $5,000 from Lexmark Inc. McDaniel addressed at least one of the donations to Craddick at the committee's Austin address.
  • Danielle Ferro, DeLay's daughter, who was paid by her father's Texas committee to plan committee events.
  • Records from the Republican National Committee concerning an exchange of $190,000 between an arm of the party's national committee and Texans for a Republican Majority. The Texas committee gave the national party $190,000 in corporate money in the fall of 2002.
In a single day two weeks later, the national party cut seven checks to Texas House candidates totaling $190,000. Republican officials have called it a coincidence. Critics claim the Texas committee was laundering corporate money that it could not legally donate to candidates into legal donations.

Two Austin candidates, Jack Stick and Todd Baxter, got $35,000 each from the national committee and went on to become freshmen lawmakers who voted for Craddick as speaker.
  • Records of John Colyandro, the Texas committee's executive director. He ran the organization under an advisory committee that included DeLay, state Sen. Florence Shapiro, R-Plano; state Reps. Dianne White Delisi, R-Temple, and Beverly Woolley, R-Houston; and then-Railroad Commissioner Tony Garza.
  • Consultants who provided polling, research or other services to Texans for a Republican Majority. Among them are DeLay's corporate fund-raiser Warren Robold of Washington, Austin researcher Milton Rister, Austin consultant Todd Smith, Dallas-area consultant Kevin Brannon and Austin fund-raiser Susan Lilly.
  • Matt Welch, a lobbyist with Texans for Lawsuit Reform, a group that worked to limit lawsuits in the past legislative session.
  • Records of Americans for a Republican Majority, DeLay's national political action committee.
  • Records from several Austin restaurants and private clubs, plus the Purple Sage Ranch of Bandera, where officials with the Texas committee had a weekend retreat.
  • Records from Blakemore & Associates, a Houston consulting firm, and Clinton International Investigations of Houston. Toomey hired private investigators to do criminal background checks on Democratic candidates, then asked Texans for a Republican Majority to help pay for those services.
Toomey, according to sources familiar with his meetings with pro-business allies, also helped create and direct ads paid for by the Texas Association of Business with corporate money in 22 crucial House elections. Those records are due March 4.

On another front Wednesday, a civil lawsuit brought against the Republican Majority group by losing Democratic candidates was expanded to include DeLay's chief fund-raising aide, Jim Ellis, as a defendant.

Ellis is the executive director of DeLay's Americans for a Republican Majority and a founder and paid adviser to Texans for a Republican Majority.

That action came a day after it was publicly revealed that he was sent a blank check from the Texas Republican Majority group just before a meeting with officials with the Republican National Committee. That check later was filled out for $190,000.

"We think he's part and parcel of the problem and violated the election code along with Mr. Ceverha," said Austin lawyer Joe Crews, who is representing four Democratic candidates who lost in the races targeted by the ads. "There may be others."

Austin lawyer Terry Scarborough, representing the Texas Republican Majority committee, criticized the lawsuit as politically motivated.

"There are at least a half a dozen people who were more involved with TRMPAC than Jim Ellis," Scarborough said. "To add Mr. Ellis to this suit is a blatant attempt to politicize the claim."