Saturday, June 26, 2004

Corporations that financed Tom DeLay's 2002 takeover of the Texas Legislature may be facing greater scrutiny than the U.S. House Majority Leader, according to sources close to the Travis County grand jury investigation into 2002 election-year spending.

Earle: Investigation focus shifts to corporations

Lawyers for Tom DeLay say U.S. House Majority Leader not a target

By Laylan Copelin, Austin American-Statesman
Saturday, June 26, 2004

Corporations that financed Tom DeLay's 2002 takeover of the Texas Legislature may be facing greater scrutiny than the U.S. House Majority Leader, according to sources close to the Travis County grand jury investigation into 2002 election-year spending.

The shift in emphasis is just the latest twist over the past 20 months as prosecutors wrestle with mounds of evidence and a long list of witnesses in the biggest political investigation of District Attorney Ronnie Earle's 27-year career.

On Friday, the direction of the massive investigation, with repercussions from the Legislature to the halls of Congress, became clearer as Earle updated its progress and defense lawyers weighed in with their speculation.

In a 90-minute interview, Earle acknowledged he would have retired this year if not for the investigation, which he said he is determined to pursue to the end.

Lawyers for DeLay said Friday that prosecutors have told them their client is not a specific target of the investigation, a claim Earle didn't fully dispute, though he added, "It's too early to pass out get-out-of-jail-free cards."

Earle said portions of the investigation could be completed later this summer, but some complaints might take longer.

Over the 20 months, Earle hasn't cooled his populist message about the significance of the investigation: "Democracy can't depend on who owns the microphone, and that's the issue here: unbridled wealth controlling the electoral process."

Earle said the investigation has expanded to include at least five political organizations, many individuals and the corporations that financed them.

"This isn't about Tom DeLay," Earle said of the investigation's breadth. "It's about corporate greed. They can always find another Tom DeLay."

In 2002, Republicans and Democrats were fighting for control of the Texas Legislature and, by extension, dominance of the Texas delegation in Washington. DeLay was working to elect more GOP state lawmakers who, in turn, would redraw congressional boundaries to elect more Republicans to Congress.

The allegation behind the expansive grand jury investigation is whether Republicans and their business allies violated state laws that prohibit corporate money being spent on campaign activity.

The focus is on Texans for a Republican Majority; Texas Association of Business; Law Enforcement Alliance of America; Americans for Job Security; and the Lone Star Fund, a Democratic committee added recently when Republicans filed a complaint.

Texas House Speaker Tom Craddick, R-Midland, and his Democratic predecessor, Pete Laney, are subplots to the overall investigation. Prosecutors are checking whether Craddick violated any laws when Texans for a Republican Majority turned over $152,000 to Craddick's office to be distributed to his supporters in the Legislature. Craddick has claimed he didn't do anything that Laney and the Democrats haven't done in the past -- a charge Laney denied.

The newest wrinkle, however, is prosecutors' interest in the corporations that gave the money.

Sources close to the investigation say legal liability for corporations varies from case to case because of different laws and the defenses that corporations can offer.

For example, corporations that gave $1.9 million for ads by the Association of Business can argue that they gave the money with assurances from the association's lawyers that the donations were legal. Corporations that gave the $600,000 to Texans for a Republican Majority might not have the same defense, the sources said.

Indicting corporations also has a political benefit.

"Earle versus Enron -- Ronnie likes the sound of that," one source said, using Enron generically though it did not donate in this case.

On Friday, Earle insisted that no one -- individual or corporation -- is in the clear yet.

"Anybody who committed a crime is a target," Earle said. "The only pressure I feel is not to stop until we get to all of the truth."

Earle, a Democrat criticized by Republicans for initiating the investigation, almost didn't stay around to pursue it.

He said he had thought this would be his last year as district attorney. Last fall Democrats approached former Austin Mayor Kirk Watson and U.S. Rep. Lloyd Doggett, D-Austin, about running for Earle's job. When neither agreed to enter the race, Earle filed for another four-year term because he wanted to complete the investigation.

"Sometime things comes along that is more important than your convenience," he said. "I thought these issues were important."

Earle said that next week he will ask that the three-month term of the grand jury, the fourth that has looked at the campaign allegations, be extended for another three months.

He defended the length of the investigation as the most complicated one his office has tackled.

Comparing the investigation to his prosecution of politicians in the past, Earle joked, "It's like comparing Grenada to World War II."

Not only are the allegations wide-ranging, involving millions of dollars in corporate donations, but the Texas Association of Business fought cooperating with the grand jury for 10 months, then attempted to get prosecutors' records under the Texas Public Records Act.

"We went to the U.S. Supreme Court twice," Earle said. "We could have been done a long time ago if it wasn't for their efforts to derail the investigation."

For its part, the association has cooled its criticism of Earle, an apparent attempt to avoid agitating the prosecutor further.

Told that Earle's investigation will be extended, association lawyer Andy Taylor said Friday, "Campaign finance laws are complicated and investigations of this nature necessarily take some time. We are confident that after Mr. Earle has completed his investigation that TAB will be fully exonerated."

DeLay's lawyers Bill White and Steve Brittain, both of Austin, said that they have been meeting with prosecutors since DeLay hired them several weeks ago.

After 20 months, White said prosecutors have no evidence of DeLay committing any crime. He said DeLay created the Republican majority committee but others ran it.

"He reads his name in the newspapers every day as a target of investigation because he came up with the concept," White said. "It's like coming up with the idea of the Boy Scouts and having a troop go bad."

While DeLay has accused Earle of conducting a partisan witch hunt, Earle might not even be able to prosecute the lawmaker for election code violations, if any are found.

Election law limits Earle's jurisdiction to prosecuting people who reside in Travis County or outside Texas. DeLay's legal residence is Sugar Land, so the prosecutor there would have jurisdiction over any allegation of breaking state election laws.

However, White said Earle could prosecute DeLay if he alleged a crime -- money-laundering, for example -- that is outside the election code.

"If they (prosecutors) decide to take on somebody," White predicted, "venue won't stop them."

DeLay's lawyers went on the record as the national limelight on DeLay is intensifying.

U.S. Rep. Chris Bell, a Houston Democrat defeated in a redrawn district, has filed an ethics complaint in Congress against his fellow Texan. The grand jury investigation is cited in the complaint.

The national news media, which have done reports on the Texas investigation from time to time, are stepping up their interest because of DeLay.

Bill Moyers did a show on DeLay earlier this month, the Wall Street Journal is preparing a piece and CBS' "60 Minutes" has contacted Texas officials about a story.

Earle said he is not surprised by the increasing attention: "This is an issue that concerns the whole country, not just Texas, because corporate greed does not stop at the state line."