Saturday, December 31, 2005

More Troubles Rubles for DeLay

Today, there was another of the almost weekly new reports linking Tom DeLay's fundraising machine to GOP lobbyist Jack Abramoff.

Hardly even news anymore, except....

it seems to cross yet another new frontier in the annals of DeLay, Abramoff and their willful brushing aside of campaign finance laws and ethics in DeLay's maniacal quest to create a lasting GOP majority in Congress by whatever means he could.

And WHAT was done?

Tom DeLay apparently benefitted from contributions from a foreign source.

The U.S. Family Network, a public advocacy group that operated in the 1990s with close ties to Rep. Tom DeLay and claimed to be a nationwide grass-roots organization, was funded almost entirely by corporations linked to embattled lobbyist Jack Abramoff, according to tax records and former associates of the group.

During its five-year existence, the U.S. Family Network raised $2.5 million but kept its donor list secret. The list, obtained by The Washington Post, shows that $1 million of its revenue came in a single 1998 check from a now-defunct London law firm whose former partners will not identify the money's origins.

Two former associates of Edwin A. Buckham, the congressman's former chief of staff and the organizer of the U.S. Family Network, said Buckham told them the funds came from Russian oil and gas executives. Abramoff had been working closely with two such Russian energy executives on their Washington agenda, and the lobbyist and Buckham had helped organize a 1997 Moscow visit by DeLay.

The former president of the U.S. Family Network said Buckham told him that Russians contributed $1 million to the group in 1998 specifically to influence DeLay's vote on legislation the International Monetary Fund needed to finance a bailout of the collapsing Russian economy.

The article then goes on through more information on the donors to the fund and the help they received from DeLay, and includes this little tidbit:

There is no evidence DeLay received a direct financial benefit, but Buckham's firm employed DeLay's wife, Christine, and paid her a salary of at least $3,200 each month for three of the years the group existed. Richard Cullen, DeLay's attorney, has said that the pay was compensation for lists Christine DeLay supplied to Buckham of lawmakers' favorite charities, and that it was appropriate under House rules and election law...

While DeLay's wife drew a monthly salary from the lobbying firm, she did not work at its offices in the townhouse on Capitol Hill, according to former Buckham associates.

Neither the House nor the Federal Election Commission bars the payment of corporate funds to spouses through consulting firms or political action committees, but the spouses must perform real work for reasonable wages.

He didn't receive a direct financial benefit but they hired his wife for $3,200 per month to pass on some lists (some people drop dead while working for less than that). Sounds like a pretty direct financial benefit to me (I don't mean to presume anything about the financial structure of the DeLay household, but I would think that money paid to his wife would constitute a direct financial benefit to him; My wife has been unable to find permanent employment for three years and it certainly has affected our household income, in the opposite manner from DeLay's).

So the next question is, given that the money was from a foreign source (and was therefore illegal), WHAT was it used FOR? Well, the article also delves into that.

Some of the U.S. Family Network's revenue was used to pay for radio ads attacking vulnerable Democratic lawmakers in 1999; other funds were used to finance the cash purchase of a townhouse three blocks from DeLay's congressional office. DeLay's associates at the time called it "the Safe House."

DeLay made his own fundraising telephone pitches from the townhouse's second-floor master suite every few weeks, according to two former associates. Other rooms in the townhouse were used by Alexander Strategy Group, Buckham's newly formed lobbying firm, and Americans for a Republican Majority (ARMPAC), DeLay's leadership committee.

It was used for attack ads, and to raise more money.

The only question I have, is how much money did it eventually turn into, and which Congressmen benefitted (because we know where ARMPAC money went-- to GOP Congressmen and Congressional candidates all across the country.)

And keep in mind that Tom DeLay is STILL the Majority Leader (only temporarily suspended) of these same Congressmen.

Funny how a million dollars of foreign money can go so far in America these days.

Then, there is a question of WHO were these Russians?

Three sources familiar with Abramoff's activities on their behalf say that the two Russians -- who knew the head of the Russian energy giant Gazprom and had invested heavily in that firm -- partly wanted just to be seen with a prominent American politician as a way of bolstering their credibility with the Russian government and their safety on Moscow's streets. The Russian oil and gas business at the time had a Wild West character, and its executives worried about extortion and kidnapping threats. The anxieties of Nevskaya and Koulakovsky were not hidden; like many other business people, they traveled in Moscow with guards armed with machine guns.

Tom DeLay's kind of people, living in Tom DeLay's kind of society, in other words.

There is also the question of HOW the donation was to be made.

A former Abramoff associate said the two executives "wanted to contribute to DeLay" and clearly had the resources to do it. At one point, Koulakovsky asked during a dinner in Moscow "what would happen if the DeLays woke up one morning" and found a luxury car in their front driveway, the former associate said. They were told the DeLays "would go to jail and you would go to jail."

The tax form states that the $1 million came by check on June 25, 1998, from "Nations Corp, James & Sarch co." The Washington Post checked with the listed executives of Texas and Florida firms that have names similar to Nations Corp, and they said they had no connection to any such payment.

James & Sarch Co. was dissolved in May 2000, but two former partners said they recalled hearing the names of the Russians at their office. Asked if the firm represented them, former partner Philip McGuirk at first said "it may ring a bell," but later he faxed a statement that he could say no more because confidentiality practices prevent him "from disclosing any information regarding the affairs of a client (or former client)."

Nevskaya said in the e-mail yesterday, however, that "neither Naftasib nor the principals you mentioned have ever been represented by a London law firm that you name as James & Sarch Co." She also said that Naftasib and its principals did not pay $1 million to the firm, and denied knowing about the transaction.

Two former Buckham associates said that he told them years ago not only that the $1 million donation was solicited from Russian oil and gas executives, but also that the initial plan was for the donation to be made via a delivery of cash to be picked up at a Washington area airport.

A Rolls would be too obvious, and cash would be too messy, so hence the check.

And WHY did they want to give money to DeLay?

One of the former associates, a Frederick, Md., pastor named Christopher Geeslin who served as the U.S. Family Network's director or president from 1998 to 2001, said Buckham further told him in 1999 that the payment was meant to influence DeLay's vote in 1998 on legislation that helped make it possible for the IMF to bail out the faltering Russian economy and the wealthy investors there.

"Ed told me, 'This is the way things work in Washington,' " Geeslin said. "He said the Russians wanted to give the money first in cash." Buckham, he said, orchestrated all the group's fundraising and spending and rarely informed the board about the details.

Now, it was meant to 'influence' DeLay's 'vote.' Of course, one of 435 Congressmen is very unlikely to be the single deciding vote, but in DeLay's case, as Majority Leader, his 'vote' was more like his 'House.' I have blogged before on some of the tactics that Tom DeLay has used in the House to make sure that he gets legislation passed that he supports.

And he delivered in this case: (read on):

The IMF funding legislation was a contentious issue in 1998. The Russian stock market fell steeply in April and May, and the government in Moscow announced on June 18 -- just a week before the $1 million check was sent by the London law firm -- that it needed $10 billion to $15 billion in new international loans.

House Republican leaders had expressed opposition through that spring to giving the IMF the money it could use for new bailouts, decrying what they described as previous destabilizing loans to other countries. The IMF and its Western funders, meanwhile, were pressing Moscow, as a condition of any loan, to increase taxes on major domestic oil companies such as Gazprom, which had earlier defaulted on billions of dollars in tax payments.

On Aug. 18, 1998, the Russian government devalued the ruble and defaulted on its treasury bills. But DeLay, appearing on "Fox News Sunday" on Aug. 30 of that year, criticized the IMF financing bill, calling the replenishment of its funds "unfortunate" because the IMF was wrongly insisting on a Russian tax increase. "They are trying to force Russia to raise taxes at a time when they ought to be cutting taxes in order to get a loan from the IMF. That's just outrageous," DeLay said...

In the end, the Russian legislature refused to raise taxes, the IMF agreed to lend the money anyway, and DeLay voted on Sept. 17, 1998, for a foreign aid bill containing new funds to replenish the IMF account. DeLay's spokesman said the lawmaker "makes decisions and sets legislative priorities based on good policy and what is best for his constituents and the country." He added: "Mr. DeLay has very firm beliefs, and he fights very hard for them."

So, the Russians got their legislation to fund the IMF for bailing out the Russian economy while apparently still using their domestic leverage to avoid a tax hike. My only question is this: If 'Mr. DeLay has very firm beliefs, and he fights very hard for them,' then why did the Russian oilmen feel it was necessary to give him a nickel? I mean, if you try for a moment (I know it's a stretch) to put yourself in the shoes of a corrupt Russian oilman, wouldn't you try to bribe people whose help you actually needed? Ergo, they needed his help. It is just a 'coincidence' that he spoke up on their behalf and that members of Mr. DeLay's own party in the house were overridden and forced to vote for a bill they had taken a stance against.

Yeah, a lot like the 'coincidence' we mentioned earlier that the original cover group, after presumably interviewing many qualified candidates, just 'happened' to decide that Christine DeLay was the right person for their position.

Now, there is a question about the fact that the Federal Election Campaign Act prohibits foreign nationals from making any contribution to candidates or parties, but this organization was able to skirt the act.

No legal bar exists to a $1 million donation by a foreign entity to a group such as the U.S. Family Network, according to Marcus Owens, a Washington lawyer who directed the IRS's office of tax-exempt organizations from 1990 to 2000 and who reviewed, at The Post's request, the tax returns filed by the U.S. Family Network.

So that's the secret then. Give it to a 'public interest group,' and it's legal. But certainly unethical. And ultimately that should be illegal as well. But with Tom DeLay writing the laws, that won't happen any time soon.


Chuck said...

I think we can rest assured that hammer boy is going down next year.

HAPPY NEW YEAR to you & your family Eli! I hope all is well with your wife.

Best Wishes!

Day by Day said...

I agree with chuck...

Happy New Year to you and yours!!! :)

Anonymous said...

Excellent article and analysis, Eli.
Boy, the web of deceit is complicated and seems so far reaching. 2006 is going to be a very interesting year.

Happy New Year to you and yours, Eli.