By R. Jeffrey Smith
Washington Post Staff Writer
Wednesday, June 7, 2006
A registered lobbyist opened a retirement account in the late 1990s for the wife of then-House Whip Tom DeLay (R-Tex.) and contributed thousands of dollars to it while also paying her a salary to work for him from her home in Texas, according to sources, documents and DeLay's attorney, Richard Cullen.
The account represents a small portion of the income that DeLay's family received from entities at least partly controlled by lobbyist Edwin A. Buckham. But the disclosure of its origin adds to what was previously known about the benefits DeLay's family received from its association with Buckham, and it brings the total over the past seven years to about half a million dollars.
Buckham was DeLay's chief of staff before he became a lobbyist at the end of 1998, shortly before the account was opened and the flow of funds began. He has come under scrutiny from federal investigators because his lobbying firm received hundreds of thousands of dollars in revenue from clients of indicted Republican lobbyist Jack Abramoff.
Buckham's financial ties to DeLay's family -- and the retirement account in particular -- have recently attracted the interest of FBI agents and others in the federal task force probing public corruption by lawmakers and lobbyists, according to a source who was questioned in the course of the government's investigation.
Cullen said the retirement account was required for Buckham's employees under Internal Revenue Service rules. But investigators are looking at Buckham's role in establishing the account and at whether the lawmaker may have performed official acts in return for any of the income arranged by Buckham, according to the source. DeLay denies any wrongdoing.
Another lawmaker, Rep. John T. Doolittle (R-Calif.), has similarly come under Justice Department scrutiny in the past year because of fees paid to his wife's consulting firm -- in that instance as compensation for soliciting corporate campaign contributions.
Abramoff, who was friendly with both DeLay and Doolittle, put Julie Doolittle's firm on his lobbying firm's payroll to plan a fundraising event for a nonprofit group he created. A nonprofit organization that Buckham created also hired her firm to keep its books; the organization subsidized a $28,000 trip to South Korea by DeLay and his wife.
Laura Blackann, a spokeswoman for John Doolittle, confirmed that a grand jury investigating Abramoff's lobbying activities subpoenaed Julie Doolittle's firm in 2004 to obtain some of its records. In February, the FBI subpoenaed another nonprofit group created by Buckham, seeking records of any dealings with DeLay, his wife and his daughter, according to a copy of the subpoena.
From 1998 until recently, Buckham, an evangelical minister, met regularly with DeLay, occasionally attended staff meetings in his office, made scheduling recommendations or decisions for the office, and served as DeLay's chief political and spiritual adviser, even though he was not formally employed by him. At the time, Buckham's clients included a host of companies with regulatory and legislative business before Congress, and whose interests DeLay supported.
Under congressional ethics rules, lobbyists such as Buckham are barred from providing gifts or gratuities with a total value exceeding $50 to lawmakers in a single year. No similar prohibition exists for payments to a lawmaker's family members, but the pay must be a reasonable wage for real work and not be meant to influence a lawmaker's votes. Nothing in pending House and Senate lobbying reform legislation addresses the issue of such lobbyist payments to lawmaker's families.
DeLay, who was indicted in October 2005 on charges of money laundering related to the 2002 elections in Texas, announced in April that he would resign from Congress on June 9. He stepped down as House majority leader after the indictment, relinquishing a post he held from 2002 to 2005. DeLay has not disclosed his future employment plans but has said he plans to continue to promote conservative causes in Washington.
Buckham, who co-owned his lobbying firm with his wife, initially opened the retirement account for Christine DeLay at First Union bank. In 2001, he transferred it to the Charles Schwab & Co. office near his home in Frederick, according to a source with direct knowledge of the matter. From 1999 to 2000, DeLay listed the account as a spousal asset on his financial disclosure forms without specifying its value.
In his 2001 disclosure, DeLay said for the first time that the account was valued at between $15,000 and $50,000. Beginning in 2003, he listed it as a joint asset, though Cullen said in an interview that it remained in Christine DeLay's name and that such a listing was not required. "I believe the IRA has remained in Christine's name since the inception and that [the joint] designation must have been an error," Cullen said.
DeLay's salary from the House during this period ranged from $136,700 to $180,100. He will receive a pension starting at about $56,000 annually, and he is eligible for a defined-contribution retirement program, according to the National Taxpayers Union.
Cullen said that the Schwab account was a routine way for Buckham to contribute to an employee's retirement needs and that Christine DeLay, like others who worked at Buckham's now-defunct lobbying firm, received funds for the account as a percentage of her income during her employment. Charles Wm. McIntyre, a colleague of Cullen's at the McGuireWoods law firm, said DeLay and his office are unaware of any particular interest in the retirement account by federal investigators.
Besides financing the retirement account, Buckham played a role in two other streams of income that indirectly benefited DeLay.
One involved payments to DeLay's family by his principal political action committee, Americans for a Republican Majority (ARMPAC), which drew its largest donations from corporations. Three former DeLay staffers with firsthand knowledge of Buckham's activities have described him as a decision maker for the group, even though it was formally run by its executive director.
An arm of the group paid Buckham a monthly consulting fee, and Buckham in turn employed its executive director as a consultant to his lobbying firm. The two of them shared a single office on the top floor of a townhouse owned by a nonprofit organization that Buckham created and directed. Buckham's role is relevant because from 2001 to Jan. 31, 2006, ARMPAC paid Christine DeLay; DeLay's daughter, Dani DeLay Ferro; and Ferro's Texas firm a total of $350,304 in political consulting fees and expenses, according to public records.
The Washington Post previously disclosed that from 1998 to 2002, Buckham's lobbying firm, Alexander Strategy Group, paid Christine DeLay a monthly salary averaging between $3,200 and $3,400. Cullen initially said the payments were for telephone calls she made periodically to the offices of certain members of Congress seeking the names of their favorite charities. Christine DeLay then forwarded that information to Buckham, along with some information about those charities.
Last week, Cullen said the payments were also for general political consulting Christine DeLay provided to her husband. Cullen said he does not have complete records of the salary payments or the dates when Christine DeLay performed the work from the couple's home in Sugar Land, Tex. But a source familiar with the pay records said the total she received from the Alexander Strategy Group was about $115,000.
Together with the retirement account worth about $25,000, this means the family's total financial benefits from entities at least partly controlled by Buckham exceeded $490,300.
Before being paid by ARMPAC for political consulting, Christine DeLay, a homemaker and advocate for foster care, had not done paid work of that type. That circumstance has figured in government investigations of payments to other lawmakers' spouses, on the grounds that, if the compensation began after a lawmaker's election, it might have been meant to influence official acts.
Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, a group that has criticized payments to lawmakers' spouses, said that "the real scandal in Washington is what is legal."
"This is a prime example of that," she said. "But there is a distinction between what is legal and what is right. . . . What was DeLay doing for all that money? Even Ed Buckham was not paying DeLay and his family out of the goodness of his heart."
Buckham's lobbying clients during the period in question included Enron, AT&T, the American Bankers Association, the National Association of Convenience Stores, Freddie Mac, Nextel, United Parcel Service, Time Warner, Microsoft, BellSouth, the Pharmaceutical Research and Manufacturers of America and the Coalition to Preserve Dietary Supplements.
Several groups represented by Buckham also helped sponsor lavish overseas travel by DeLay and his family.
"Tom DeLay has never taken an official act that was not based on his strongly held principles," Cullen said. Buckham and his attorney did not return several telephone calls seeking comment.
Database editor Derek Willis, researcher Madonna Lebling and research editor Lucy Shackelford contributed to this report.