DeLay's Corporate Fundraising Investigated

Texas is one of 18 states that bar political contributions from corporations for election purposes. But the law has an exception for expenses incurred by political action committees. At issue in Earle's probe, and the lawsuit, is whether the law permits corporations to finance only routine administrative expenses, such as rent, as an official of the Texas Ethics Commission contends, or whether the law permits corporations to finance virtually any activity besides direct contributions to candidates, as TRMPAC's lawyer contends.

The Texas statutes involved -- barring the acceptance of prohibited contributions, the donation of corporate money for improper purposes and the expenditure of money for unauthorized uses -- have been invoked in only a few previous cases. Violations are punishable by as many as 10 years in prison.

Requests to Enron

DeLay's effort to build a Republican majority in the state legislature by channeling large campaign donations to Texas from lobbyists and corporations with interests before Congress dates at least from the 2000 election.

In an e-mail dated July 24 of that year, Enron Executive Vice President Steven J. Kean advised colleagues that DeLay had sent notes to company executives "about designating portions of their contributions for use in Texas."

Three days later, Enron sent a check for $50,000 to the Republican National State Elections Committee (RNSEC) in Washington, and three top executives sent checks totaling $25,000. Around the same time, RNSEC transferred $1.2 million to the Texas Republican Party, which in turn donated $1.3 million to 20 legislative candidates that year, according to federal and state records.

Public records do not track the final destination of the Enron contribution. But Republican National Committee spokeswoman Christine Iverson said any corporate money sent to Texas by RNSEC was spent only for allowable purposes.

In 2001, DeLay assisted Enron in its efforts to secure deregulation legislation. Houston business lobbyist Anne Culver also sent executives at Enron and other energy firms an e-mail in March of that year stating that "Mr. DeLay is interested in what he and the other congressmen may be able to due [sic] legislatively to assist in addressing some of the issues we have" with new pollution-control rules.

DeLay's daughter, Dani Ferro, played a role in arranging access for corporations that gave money to DeLay's project and earned fees for planning fundraising events. On Oct. 10, 2001, Ferro called Enron's Washington-based lobbyists to remind them of an upcoming fundraising event in Florida. "As part of platinum sponsorship, we have the opportunity to have a dinner with Congressman DeLay either here or in Houston," said an e-mail from lobbyist Carolyn Cooney to colleague Linda Robertson. "Dani wants to know" when to schedule it, Cooney added.

Roy, the DeLay spokesman, said there was nothing unusual about DeLay's contacts with Enron, a major local employer that had not yet become notorious for accounting fraud.

Ferro, who has not been named as a target in the investigation but has turned over documents to the grand jury, declined to be quoted for this article.

For a Republican Majority

The efforts to collect money from Enron represented a small part of DeLay's overall campaign to build a GOP majority in the Texas House. DeLay conceived of TRMPAC as a way to counter Democratic spending and pour new money from corporations and their executives into the redistricting effort.

TRMPAC's startup expenses in 2001 were covered by $50,000 in corporate money from DeLay's principal political action committee, Americans for a Republican Majority (ARMPAC). A second payment of $25,000 was made in late 2002. TRMPAC then raised $525,000 in corporate money on its own, and spent less than $70,000 on its director's salary; the rest went mostly toward fundraising, receptions, polls, candidate evaluations, voter identification and private investigations of key Democratic candidates, according to files obtained by The Post.

TRMPAC's director was John Colyandro, a veteran of White House political adviser Karl Rove's direct-mail firm; one of its decision-makers was Jim Ellis, who runs DeLay's ARMPAC; and its chief corporate fundraiser was the same person who performed that function for ARMPAC. As it turned out, ARMPAC donated money to 15 of the same Republican candidates in Texas, sending along cover letters printed on TRMPAC stationery, lawyers said. No allegations of wrongdoing have been made about the ARMPAC donations.

DeLay chaired the TRMPAC advisory board, wrote his own cover letter for its fundraising brochure and received copies of memos that described Texas candidates being considered for TRMPAC funding. He also traveled to Texas to appear at fundraisers and meet with donors, flying at least once on a plane provided by a private company reimbursed by TRMPAC.