But after DeLay agreed to waive the statute of limitations for a month, Earle agreed to hold talks about the implications of DeLay's admission. That's why no mention was made of DeLay on Sept. 13, when the grand jury indicted Ellis and Colyandro for money laundering and conspiring to violate the state election law.
On Sept. 23, Ed Bethune, a retired FBI agent and former Arkansas congressman who oversees DeLay's legal defenses, met with Earle to discuss the possibility of DeLay pleading guilty to a lesser charge than Ellis, an idea that Earle was prepared to accept, according to the four sources. Earle said he wanted Ellis and DeLay to spend three to four months in jail if their appeals failed, an idea that DeLay's lawyers rejected. They then discussed letting a state jury decide the issue of punishment.
Asked for a comment, Jonathan D. Pauerstein, Ellis's lawyer, confirmed that Ellis's potential guilty plea was "a concept that was discussed" but added that it was "not something that anybody said they would do," because "there was never anything put on the table that would be worthy of consideration."
The principal reason the deal foundered was that DeLay's attorneys wanted to postpone his plea until after the Texas appellate courts had ruled on the validity of the state election law provisions at issue, the sources said. Under their proposal, if the courts agreed the law was invalid, then all charges would be dismissed and the promise of a plea forgotten. For the two years it might take to resolve the issue, DeLay would be able to keep his post.
Earle insisted instead that DeLay enter a plea with the court immediately. He was willing only to defer punishment until appeals related to the validity of the law were exhausted; striking any other deal would show undue favoritism to DeLay, several sources said he argued. But DeLay's defense team felt such a decision would gravely damage the majority leader's political standing.
"DeLay was at peace with not doing that. He is ready to fight about it," White said.
Earle said at the meeting that without a deal, he would have to present the case to the grand jury, and he warned that its members might indict DeLay on a felony. The following week, as promised, Earle presented his case to the grand jury and won a felony conspiracy indictment -- forcing DeLay to step down as majority leader. Within hours, however, Earle's aides informed him that DeLay's lawyers might convince a court that this crime was not included in the state election law in 2002.
Earle then decided that the best course would be to bring a new charge of money laundering, an offense that might require a higher standard of proof than conspiracy. But the old grand jurors could not be called back, and the only other grand jury empaneled in Travis County had just two days left to serve. Its members decided not only to vote against the proposed indictment but also to make their decision public.
DeLay, meanwhile, had decided to try to repair his reputation with a public defense, in which he accused Earle of "politics at its sleaziest" and gave his own account of the movement of funds between Washington and Texas.
"I knew about this after it happened, because Jim Ellis in passing said, 'Oh, by the way, we sent some money to . . . [an arm of the Republican National Committee]' and I said okay," DeLay said on the "Fox News Sunday" talk show Oct. 2. "That wasn't an approval. That was an acknowledgment" of what had happened. The meeting occurred, he said, in October 2002.
In a separate interview on Fox that week, DeLay conceded that "Jim Ellis would let me know how things were going, because I was interested in how things were going, and how much money they were raising."
Over the weekend of Oct. 1 and 2, Earle asked his staff to collect transcripts of everything DeLay had said publicly. Armed on Monday morning, Oct. 3, with what he considered these fresh admissions by DeLay of his knowledge of the deal, Earle persuaded a new grand jury at its first meeting to return two new indictments for money laundering and conspiracy.
For his part, DeLay has bluntly expressed regret over his handling of the matter even as he insists he did nothing wrong. He complained Oct. 4 on Rush Limbaugh's radio program that at his meeting with Earle, "I misspoke one sentence, and they have based all this on one sentence."
