Friday, October 8, 2004

The U.S. House ethics committee's rebuke of Majority Leader Tom DeLay this week focused on an issue never raised publicly before: the appearance of impropriety created by an exclusive DeLay fund-raiser for energy executives held just before he served on a conference committee dealing with major energy legislation.

Panel: DeLay's golf outing for energy executives looked improper

Eyebrows raised by fund-raiser

By R.G. RATCLIFFE, October 8, 2004

AUSTIN - The U.S. House ethics committee's rebuke of Majority Leader Tom DeLay this week focused on an issue never raised publicly before: the appearance of impropriety created by an exclusive DeLay fund-raiser for energy executives held just before he served on a conference committee dealing with major energy legislation.

The ethics committee said the Sugar Land congressman gave the small group of executives direct access at the 2002 fund-raiser, a golf outing, and that a memo written by a former DeLay aide spelled out exactly what each of the executives attending the event wanted out of the energy legislation.

While there was no evidence DeLay took official action because of the event, the ethics investigators said the fund-raiser left the impression that beneficial action could be obtained with campaign contributions.

"At a minimum, his (DeLay's) conduct created at least the appearance that donors were being provided with special access to Representative DeLay regarding the then-pending energy legislation," the bipartisan committee said.

"Representative DeLay was in a position to significantly influence the conference, both as a member of the House leadership and, by action taken about a week and a half after the fund-raiser, his appointment as one of the conferees."

'Wild-eyed allegations'

DeLay spokesman Jonathan Grella responded to questions about the report by focusing on complaints filed by U.S. Rep. Chris Bell, D-Houston, rather than on the ethics committee's findings. Bell had complained that Republican DeLay had acted improperly on behalf of Westar Energy Inc. of Kansas for a $25,000 donation the company gave to a DeLay-founded Texas political committee.

"Lame duck Chris Bell's allegations contained libelous and wild-eyed allegations of serious crimes," Grella said.

Bell lost his seat in Congress in large part because of a major redistricting bill DeLay pushed through the Texas Legislature.

Grella noted that the ethics committee said Bell's complaint about Westar was based on "unsubstantiated allegations."

While the committee cleared DeLay of wrongdoing involving Westar, the panel said it was led into questions about the energy fund-raiser while investigating the Westar portion of Bell's complaint.

The complaint about Westar revolved around e-mails that company executives and lobbyists wrote to secure a "place at the table" by giving $25,000 in corporate donations to Texans for a Republican Majority, founded by DeLay.

Two Westar executives were among the energy leaders who attended the golf fund-raiser DeLay had in June 2002 for his Americans for a Republican Majority PAC and TRMPAC at The Homestead resort in Virginia.

The fund-raiser was organized by former DeLay energy aide Drew Maloney, in coordination with ARMPAC staff. Energy executives were told they could play golf with DeLay for corporate contributions of $25,000 to $50,000 to either ARMPAC or TRMPAC.

At the time, Westar was trying to get legislation passed to remove the company from regulation under the Public Utility Holding Company Act.

A company lobbyist, Richard Bornemann, had written executives a memo explaining how campaign contributions could help the firm gain influence with House leaders, including DeLay.

But at first, Maloney did not want Westar participating in the golf excursion because the company was not a traditional electric-producing energy company. Bornemann told company executives in a memo they still might get into the event if they were willing to make a corporate donation to a DeLay committee.

"We think we can get by with that if we beg," Bornemann wrote.

4 companies attended

A May 8, 2002, memo from Maloney to DeLay's daughter, Dani DeLay Ferro, who organizes fund-raisers for her father, said energy companies that had confirmed attendance at the golf event were Reliant Energy of Houston with $50,000; and Williams Energy of Oklahoma, Mirant Corp. of Georgia and Westar, with $25,000 each.

Executives of those companies were the only ones to attend the golf event. But other companies donated, for a total of $152,500 raised at the two-day event, according to a memo from Maloney to an ARMPAC employee, Chris Perkins.

In a separate memo to Perkins before the event, Maloney detailed what the companies attending the golf tournament needed from federal legislation.

"Reliant's primary goal for the conference is to make sure the progress that has been made to deregulate the wholesale electricity markets are not rolled back," Maloney wrote.

As for Westar, "the company has a unique problem that was addressed in the House bill."

Donation questioned

When Westar wrote its check to TRMPAC in May 2002, one vice president questioned why the company was making a donation to DeLay. "DeLay is from TX what is our connection?" asked Westar Vice President Douglas Lake in an e-mail.

Douglas Lawrence, Westar vice president for public affairs, replied: "DeLay is the House Majority Leader. His agreement is necessary before the House conferees can push the language we have in place in the House bill."

DeLay actually was majority whip at the time.

The ethics committee noted that when attendees got to the golf event, two members of DeLay's leadership staff were there: Jack Victory, who handled energy issues, and office counsel Carl Thorsen.

Attorneys for Lawrence and another Westar executive who attended the event said DeLay spoke to the group on June 2, 2002, and asked them "to advise him of any interest we had in federal energy legislation."

Lawrence said he spoke with DeLay that night about Westar's needs in the legislation. After golfing with DeLay the next day, Lawrence said, he again talked to DeLay about the bill.

DeLay told the ethics committee his staff members were at the event on their own time. He said he had no specific memory of what he said there, but he questioned the Westar characterization of his remarks at the opening meeting.

"It would not be typical for me at such events to have 'asked the group to advise' me of 'any interest' the attendees had in 'federal energy legislation,' " DeLay said. "That is not at all consistent with the manner in which I normally would interact with attendees at such an event."

Rep. Joe Barton, R-Ennis, who had DeLay's proxy, cast a vote for the Westar legislation on the conference committee.

But Barton withdrew the legislation after the chairman of the Kansas Corporation Commission notified the committee that Westar was facing investigations by a grand jury and the Securities and Exchange Commission, and said it would be a mistake to remove the company from federal regulation.

Westar's then-CEO David Wittig met with DeLay in September to see if there was a chance of reviving the legislation. DeLay told him there was not, according to the ethics committee report.

Several days later, Lawrence sent an e-mail to company executives stating: "Things are grim in DC. The DeLay staff has asked us to release people from their commitment to support our provision."

DeLay told the ethics committee he was "not aware" of any commitments he or his staff had made to Westar.

No improper action

The ethics committee concluded that "DeLay took no action with regard to the Westar provision that constituted an impermissible special favor or was otherwise improper."

But the ethics committee said the golf event violated the House standard that some fund-raising opportunities need to be passed over "solely because they create an appearance of improper conduct."

"In view of the circumstances of the June 2002 energy company fund-raiser ... Representative DeLay's facilitation of and participation in that event were contrary to those standards," the committee said.

"Those circumstances included not only the nature of the event, but also its timing in that it took place just as the House-Senate conference on the energy legislation _ legislation of vital importance to the contributors at the fund-raiser _ was about to commence."