Money Laundering Alleged in Texas
By R. Jeffrey Smith, Washington PostTuesday, October 4, 2005; A01
A Texas grand jury indicted Rep. Tom DeLay (R-Tex.) yesterday for alleged involvement in money laundering related to the 2002 Texas election, raising new and more serious allegations than the conspiracy charge lodged against the former House majority leader last week.
The surprising new indictments followed by a matter of hours a motion by DeLay's Texas legal defense team to quash last week's charge on grounds that the Texas prosecutor in charge of the case lacked authority to bring it. The lawyers alleged that the crime of conspiracy was not covered by the state election law at the time of the alleged violation.
Later on Monday, a different grand jury -- which had no prior involvement in the case -- brought the new charges, which roughly match allegations made against two of DeLay's political associates one year ago.
DeLay, who had earlier accused the prosecutor -- Travis County District Attorney Ronnie Earle -- of partisan zealotry, promptly issued a statement accusing him of stooping "to a new low with his brand of prosecutorial abuse." DeLay said Earle "is trying to pull the legal equivalent of a 'do-over' since he knows very well that the charges he brought against me last week are totally manufactured and illegitimate." The congressman added: "This is an abomination of justice."
One count of the new indictment accuses DeLay of conspiracy to commit money laundering. It says he agreed with one or more associates to launder $190,000 in corporate contributions through an arm of the Republican National Committee in Washington, allowing the funds to be passed illegally into the election campaigns of Republican candidates in Texas. Texas law prohibits the use of corporate money in political campaigns.
The aim of the assistance was to ensure that Republicans could gain control of the Texas House, and thus reorder the state's congressional districts in a manner that would favor the election of Republicans. The stratagem worked: Five more Republicans were elected to the U.S. House from the state last year, making it harder for Democrats to wrest control of Congress.
The other new count alleges that DeLay and the two associates "did knowingly, conduct, supervise, and facilitate" the transfer of the $190,000 to Washington and back to Texas in violation of the state's money-laundering statutes. Last week's conspiracy charge, in contrast, involved the state's election law, and it was that linkage that DeLay's attorneys challenged.
Earle, who spoke to reporters after last week's action, did not explain his decision to present his case to a new grand jury on the first day it met. DeLay spokesman Kevin Madden said that Earle's action came after he "panicked" after realizing his error in bringing last week's charges.
But a source close to the investigation, who spoke on the condition of anonymity because he lacks authority to speak publicly, responded by noting that Earle told reporters last week his investigation was continuing, and asserting that Earle had intended to bring these charges even before the challenge raised by DeLay's lawyers.
Whatever the reason, the potential consequences for DeLay are more dire. Both money-laundering crimes are more serious felonies, and the maximum punishment is life in prison. DeLay has been forced by House rules to relinquish his post as majority leader, and the new indictments stand in the way of any quick reinstatement based on any legal flaws in last week's indictment.
Jennifer Crider, a spokeswoman for House Minority Leader Nancy Pelosi (D-Calif.), called the new indictments "yet another example that Republicans in Congress are plagued by a culture of corruption and cronyism at the expense of the American people."
DeLay has said his resignation as majority leader is temporary and vowed to continue to exercise influence over the House through his close ties to Speaker J. Dennis Hastert (R-Ill.) and other leaders. Some moderate Republicans, however, have questioned whether he should be allowed to return to power.
The sequence of Monday's events make clear that neither side is prepared to back down from confrontation. Around noon on Monday, DeLay attorney Dick DeGuerin had written in a letter to Earle that "I request . . . you immediately agree to dismiss this indictment so that the political consequences can be reversed." The response, from Earle, was instead to expand the allegations.
The backdrop for yesterday's action may have been a dispute over the continued viability of a waiver of the three-year statute of limitations that DeLay granted in writing on Sept. 12, in order to keep trying to persuade Earle not to issue any indictments. After last week's conspiracy charge, DeGuerin said the waiver was withdrawn.
Yesterday's indictments maintained the waiver was still in effect. But DeGuerin said in an interview that Earle may have brought the new charges so speedily because he was uncertain of his ground on that issue. A key transaction in the alleged conspiracy -- the payment of $190,000 by the RNC to the Texas Republican candidates -- occurred on Oct. 4, 2002, or three years ago today.
That means that if the waiver is no longer in effect, the new charges had to be brought quickly. "I think they were losing sleep about this over the weekend," DeGuerin said.
DeGuerin reiterated yesterday that DeLay was unaware of the transactions involving $190,000 before they occurred and learned about them only weeks afterward. But Craig McDonald, director of Texans for Public Justice, said that "for a new grand jury to indict DeLay on a day's notice suggests the evidence of his participation is convincing."
