Tammany Fall

by John B. Judis | June 20, 2005

When Tom DeLay became majority whip in January 1995, he and Grover Norquist, the president of Americans for Tax Reform, initiated the K Street Project, a plan to force lobbyists to hire only Republicans and raise money only for Republican candidates. It was based on the assumption that, by monopolizing political contributions from business, Republicans could preserve the congressional majority they had just won. But DeLay had his own stake in the project. By controlling the flow of these contributions, he could enhance his own power within the party. That, after all, was how he had defeated Robert Walker, Speaker Newt Gingrich's candidate for whip--by raising and dispensing over $2 million during the fall election to Republican House candidates.As a first step in tightening ties between corporate America and the Republican Congress, DeLay convened a meeting of lobbyists in early 1995 to write legislation that would freeze new government regulations on business. DeLay's success that year in getting the House to adopt this legislation and in waylaying the Clinton administration's ergonomics regulations cemented his ties to a group of lobbyists who would become his "kitchen cabinet." Then, in 1998, as he was assuming de facto control of the House from an embattled Gingrich, DeLay began to threaten firms and trade associations that refused to replace Democratic staffers with Republicans. When the Electronic Industries Association hired former Democratic Representative Dave McCurdy as its president, DeLay held up copyright legislation it had lobbied for. And, in the spring of 1999, after a court ruled against Microsoft in an antitrust suit, DeLay let Microsoft know that, if it wanted Republican support, it should hire Republican lobbyists and fund Republican candidates. Recalls one high-tech lobbyist, "The [GOP] leadership was pretty much saying that, if we are going to bail you out, what are you giving to those [Democratic] guys for?" The pressure worked. Although the Electronic Industries Association retained McCurdy, it made him a figurehead and put the actual lobbying work into the hands of two conservative Republicans. Microsoft began hiring Republicans and giving the bulk of its contributions to Republicans, including DeLay. (During the 2004 election cycle, for instance, Microsoft gave DeLay's PAC the maximum of $10,000.) By the late '90s, lobbying firms and trade associations were coming to DeLay's office to have their new hires cleared. That's when DeLay took the K Street Project one step further. He didn't just get lobbying firms to hire Republicans; he got them to hire his former staff. Through these staffers, DeLay created a network of lobbyists, political consultants, and conservative activists who did his bidding. The ex-staffers on K Street didn't act like conventional lobbyists, who represent the interests of their clients. When DeLay staffers left his office for K Street, they continued to represent his interests as well as those of their clients. They would tell businesses how to please DeLay--and that meant funding him and his political operations. And, in addition, they would aid and oversee the organizations that he was developing to enhance his power. The result was the rise of a political machine reminiscent of New York's Boss Tweed or Mississippi's Theodore Bilbo. That machine is one reason DeLay, now the majority leader, has continued to amass power over the last decade. With its assistance, he has raised much more money than any other House member, ensuring loyalty and obedience from his fellow Republicans. But DeLay's relentless drive to power has created a continuing temptation to sell votes, exceed campaign funding limits, and cloak greed in the guise of charity or education. DeLay, like Tweed and Bilbo, has repeatedly succumbed to this temptation to bend the law. That's why, as clouds of scandal gather over DeLay's office, the same political machinations that contributed to his rise to power may finally lead to his downfall. Since 1984, DeLay has employed about 300 people in his congressional and leadership offices and about 75 more on his campaigns and at his political and charitable organizations, including Americans for a Republican Majority Political Action Committee (armpac) and the DeLay Foundation for Kids. Working for DeLay was a plum assignment for ambitious conservatives, but many left after three or four years, with DeLay's blessing, to become lobbyists and political operatives. Indeed, lobbying firms competed intensely for top DeLay staffers. Says one high-level Republican lobbyist for a trade association, "There is always a premium for people coming from [the congressional] leadership, and DeLay has run a tighter ship, so that has put a premium on contacts with people who serve in his office." After the lobbying firm Williams %amp% Jensen landed former DeLay Chief of Staff Susan Hirschmann in 2002, National Journal termed it "the biggest hiring coup of the year." Since the late '90s, 29 DeLay alumni have acquired major lobbying positions on K Street. (That dwarfs any other leadership office. Speaker Dennis Hastert, for instance, has six former staffers on K Street.) Together, they represent around 350 firms and institutions, including the bulk of the country's energy firms, the giants of the finance and technology sectors, the airlines, the auto manufacturers, the tobacco companies, and the country's largest health care and pharmaceutical companies. Former DeLay staffers also represent 13 of the biggest trade associations, including the American Petroleum Institute, the Pharmaceutical Research and Manufacturers Association, and the Information Technology Industry Council. Microsoft, for instance, has retained a host of DeLay alumni, including nine lobbyists from the Alexander Strategy Group, which former DeLay Chief of Staff Ed Buckham founded in 1998 with a huge initial contract that DeLay secured from Enron. (The group also paid DeLay's wife a salary for several years.) A few former staffers went to work for other House members or senators before leaving for K Street and are more clearly identified with them than DeLay. But most DeLay alumni trumpet their association with the majority leader. The Alexander Strategy Group's website sports a quotation from "Ed Buckham, partner, former chief of staff, Majority Leader Tom DeLay." The former staffers call themselves "Team DeLay," and, after DeLay's legislative director, Drew Maloney, quit to join the Federalist Group in 2002, he convened a meeting of ex- staffers every six weeks. One attendee, former Deputy Chief of Staff Tony Rudy, who is now with the Alexander Strategy Group, told National Journal, "There is a lot of discussion about how we can help Republican candidates and expand the majority." As for DeLay, Rudy added, "As long as he wants me, I'll be there for him." (DeLay, as well as Buckham and Rudy, did not respond to interview requests for this story, and former staffers who were interviewed insisted on not being quoted.) DeLay's former staffers have also migrated to conservative Republican organizations. These include several high-powered communications firms. Former Press Secretary Michael Scanlon heads Capital Campaign Strategies, which is known as the partner of former lobbyist and DeLay crony Jack Abramoff in bilking American Indian tribes. Former DeLay Director of Communications Jonathan Baron's Red Sea LLC handles polling and media relations for armpac, Republican candidates, and the Club for Growth. DeLay alumni also occupy key positions in the Christian Coalition, the International Republican Institute, the National Right to Life Committee, the Home School Legal Defense Association, the Traditional Values Coalition, and Concerned Women for America. DeLay has alumni throughout the Bush administration, including the White House and the Commerce, Justice, and State Departments, too. In January 2004, after reaching an antitrust agreement with Microsoft on its browser, Internet Explorer, the Justice Department appointed Patricia Brink, who had served for ten years as DeLay's press secretary, to oversee Microsoft's compliance. Asked whether the appointment could reflect DeLay's influence, one lobbyist commented, "I think that was a significant choice." In the House, DeLay pushed Hastert, who had been his deputy whip, into becoming speaker in 1998 and nominated Missouri Representative Roy Blunt to succeed him as whip when he became majority leader in 2000. Many of their key staff are DeLay alumni, including Hastert's director of operations and Blunt's deputy chief of staff and director of floor operations. DeLay also has staffers in high positions in at least eight other House offices, including that of Republican John Boehner, who, along with Blunt, is often mentioned as a possible successor to DeLay. These connections--and lobbying ties in particular--have allowed DeLay to dominate the relationship between K Street and the Republican Party. When pharmaceutical companies wanted a prescription-drug bill in 2003 that would not force them to bargain with the government over prices or to compete with imported drugs, they worked through a broad coalition organized by Hirschmann. The pharmaceutical companies also hired five other former DeLay staffers to lobby, including three from Buckham's Alexander Strategy Group. When energy firms wanted to pass a provision that would retroactively limit liability for manufacturers of mtbe, a toxic gasoline additive, they hired Maloney. And, when tobacco companies wanted to keep the Food and Drug Administration from regulating their industry, they looked to former DeLay staffer Karl Gallant at the Alexander Strategy Group. DeLay almost invariably came through for these lobbyists and their clients, badgering and even allegedly attempting to bribe Republicans who didn't want to back the budget-busting prescription-drug bill, blocking the Bush administration's energy bill because the Senate version didn't limit mtbe liability, and killing a provision in a tobacco bill that would have permitted FDA regulation. His success redounded in fund-raising receipts. During the 2004 election cycle, two tobacco companies, R. J. Reynolds and Brown and Williamson, gave the maximum $10,000 contributions to DeLay's PAC. Energy companies contributed $143,425 and pharmaceutical companies $106,000 to DeLay's reelection campaign in the cycle.; Of all DeLay's ventures, the one that has gotten him in the most trouble is Texans for a Republican Majority. But DeLay's former staffers not only raised money for his campaigns--all lobbyists have their clients give money to politicians they want to influence-- they also helped fund and staff his PACs and a succession of shadowy groups that intended to advance DeLay's personal agenda and preserve his power in the House. These efforts have proved enormously remunerative, but they have also contributed to the scandals and investigations that have dogged him. The heart of DeLay's fund-raising has always been armpac, which he founded before the 1994 election to buy support from fellow Republicans. Initially overshadowed by Newt Gingrich's gopac, it became the leading House Republican PAC after Gingrich resigned. Its directors have played musical chairs between DeLay's offices and the Alexander Strategy Group, to which, at one point, armpac paid rent. After DeLay became majority whip, he recruited tobacco lobbyist Gallant to head it. Gallant was succeeded in late 1997 by Buckham, who also set up the Alexander Strategy Group, where Gallant went to work. In 1999, Jim Ellis, who worked for the Alexander Strategy Group, succeeded Buckham as armpac's director. Buckham and Ellis (along with Abramoff and later Hirschmann) became DeLay's principal political advisers. ARMPAC was wildly successful. From 1998 to 2004, it raised $14.3 million, which it dispensed to the National Republican Congressional Committee (nrcc) and Republican House members. But DeLay was never satisfied with armpac, which had to disclose its contributors and limit the size of their hard money contributions. So, after the 1998 election, DeLay, Buckham, Ellis, and Gallant set up three dubious fund-raising vehicles: the U.S. Family Network (usfn), Americans for Economic Growth (AEG), and the Republican Majority Issues Committee (rmic). Usfn and AEG were registered as tax-exempt "social welfare" organizations that didn't have to report their contributors but did have to devote the bulk of their time to nonpolitical activities. The rmic could participate in politics but couldn't back specific candidates. All of these organizations were supposed to be independent of DeLay, but DeLay's lieutenants ran them on his behalf. Usfn, run by DeLay's former campaign manager, Robert Mills, seemed designed to subsidize DeLay's political operations and Buckham's lobbying. It raised over $1 million from five donors, which it used to purchase a Washington, D.C., townhouse for armpac and the Alexander Strategy Group and a 15-year lease on an MCI Center skybox (presumably to entertain clients and donors). In 1999, the nrcc--whose chairman, Representative Tom Davis, owed his position to DeLay's support, and which hired Buckham as a consultant--sent the usfn $500,000, most of which it funneled to AEG for ads in congressional races. The FEC later ruled that the nrcc was trying to avoid rules on the use of corporate money by laundering it through the two organizations and fined it $280,000. DeLay shut down usfn and AEG after the 2000 election and rmic soon afterward. But he wasn't finished with questionable ventures. After the 2002 congressional election, when new campaign finance rules took effect barring members of Congress from raising soft money, DeLay's hand could be seen in the establishment of the Leadership Forum, chaired by Hirschmann and launched with a $1 million grant from the nrcc. And, on the eve of the Republican convention last August, DeLay established a "charity," Celebrations for Children, which planned to use the money it raised to entertain lobbyists and politicians at the convention. But, of all DeLay's ventures, the one that has gotten him in the most trouble is Texans for a Republican Majority (trmpac). In September 2001, DeLay and Ellis established trmpac to help Republican candidates win control of Texas's House of Representatives in the 2002 elections, so that they could vote for a new congressional redistricting plan that was aimed at replacing seven Democratic incumbents with Republicans. Trmpac raised $1.6 million for Republican statehouse candidates, but at least $600,000 of trmpac's funds came from corporations. That's against Texas law, which forbids corporations and unions from funding state campaigns. Last September, a grand jury in Travis County indicted Ellis and two co-workers, John Colyandro and Warren Robold (who came from armpac). DeLay denies that he had any knowledge of trmpac's fund-raising, but the entire operation was geared toward attracting his donors. Trmpac's fund-raisers went after not only Texas companies, but also firms like Kansas City- based Westar Energy Corporation, which didn't have any special business in Texas but wanted to buy favors from the majority leader. And DeLay's former staffers from K Street were brought in to involve DeLay in the fund-raising. One of these ex-staffers was Drew Maloney of the Federalist Group. In June 2002, Maloney organized a joint armpac/trmpac golf fund-raiser featuring DeLay at the Homestead Resort in Virginia. It included several energy companies interested in limiting mtbe liability and Westar, which wanted a special exemption from public utility laws. In an e-mail to another former staffer, Chris Perkins, who was working for armpac, Maloney explained that Westar was giving $25,000 to trmpac on the understanding DeLay would champion its legislation. And, after reportedly asking Westar executives what they wanted, DeLay did so. DeLay later drew an admonishment from the House Ethics Committee for appearing to sell his vote to Westar. As the Travis County case and a civil suit by former Democratic Representative Chris Bell, a victim of DeLay's gerrymandering, have proceeded, e-mails have surfaced linking DeLay directly to trmpac through his ex-staffers. In one e-mail, Maloney told Robold that he had two checks from Reliant Energy that he would give to DeLay to convey to trmpac. "Will deliver to T.D. next week probably," Maloney wrote. In another, Robold asked Colyandro to draw up a list of the top ten potential givers. "I would then decide from response who Tom DeLay others [sic] should call," Robold wrote. These and other e-mails could provide the basis for indicting DeLay. At the least, they add further detail to the picture of DeLay as an accessory to corruption. DeLay has, of course, been dodging investigators and civil suits since 1999 without any apparent reduction in his power. Up until this year, his notable successes--for instance, winning the Republicans six additional House seats from Texas--increased his clout. But DeLay's accumulation of misdeeds, most of which grew out of his attempt to create a political machine that would put lobbyists and their clients at his service, may have finally stalled his drive to power. Facing a panoply of ethics charges, DeLay's influence has begun to wane. In the face of new charges against Delay, the House voted earlier this year to repeal the changes in ethics rules that were adopted last November at DeLay's behest--and which would have allowed him to keep his leadership position even if indicted in Texas. DeLay also failed to block a bill relaxing government rules on funding stem-cell research. Says one influential Republican lobbyist, "You would not think that, if he were at the height of his powers, the stem-cell bill would have passed." Only a handful of DeLay's colleagues showed up at a tribute that the American Conservative Union held for him in Washington on May 12. And Republicans, who once coveted DeLay's backing, are now worried about suffering from a "DeLay factor" in November 2006. Social conservatives like Paul Weyrich and James Dobson of Focus on the Family have stood solidly behind him, but other conservatives have begun to waver. The Wall Street Journal's editorial page has criticized DeLay for ethical lapses. And even his closest conservative allies are distancing themselves. Norquist, while insisting that DeLay has not been weakened by the scandal, tried to dissociate DeLay from the K Street Project. "Not to be critical of DeLay," Norquist says, "but this is an outside project where we have raised the importance of hiring people who understand economics." Norquist showed up briefly at the tribute to DeLay but left before the dinner and the speeches. There has also been a sharp falloff in DeLay's fundraising. Contributions to his legal defense fund have plummeted, even as DeLay's legal expenses have mounted. In the last quarter of 2004, DeLay raised $254,250. In the first quarter of this year, he raised only $47,750. Contributions to armpac may also be falling off. In its FEC filing for the first months of this year, armpac listed $386,252 in contributions. In a comparable filing for the first four months of 2003 (also at the beginning of an election cycle), armpac listed $446, 223 in contributions. (According to FEC records, DeLay also loaned his congressional campaign $100,000 this spring.) DeLay could still rebound, or he could be forced out as Gingrich was, allowing Blunt, who is being groomed as his successor, to take up where he left off. But, in the growing public disquiet with congressional corruption--which is reminiscent of the early '90s--there are clear warning signs to DeLay and to Republicans. In trying to introduce the kind of political machine most commonly found in postbellum Mississippi or Tammany New York City, DeLay may have damaged not only his career, but also the Republicans' grip on Washington.

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