Tom DeLay deliberately raised more money than he needed to throw parties at the 2000 presidential convention, then diverted some of the excess to longtime ally Roy Blunt (search) through a series of donations that benefited both men's causes.
When the financial carousel stopped, DeLay's private charity, the consulting firm that employed DeLay'son lobbyist recently charged in an ongoing federal corruption and fraud investigation, and Jim Ellis, the DeLay (search) fundraiser indicted with his boss last week in Texas, also came into the picture.
The complicated transactions are drawing scrutiny in legal and political circles after a grand jury indicted DeLay on charges of violating Texas law with a scheme to launder illegal corporate donations to state candidates.
The government's former chief election enforcement lawyer said the Blunt and DeLay transactions are similar to the Texas case and raise questions that should be investigated regarding whether donors were deceived or the true destination of their money was concealed.
"These people clearly like using middlemen for their transactions," said Lawrence Noble. "It seems to be a pattern with DeLay funneling money to different groups, at least to obscure, if not cover, the original source," said Noble, who was the Federal Election Commission's chief lawyer for 13 years, including in 2000 when the transactions occurred.
None of the hundreds of thousands of dollars in donations DeLay collected for the 2000 convention were ever disclosed to federal regulators because the type of group DeLay used wasn't governed by federal law at the time.
DeLay has temporarily stepped aside as majority leader after being indicted by a Texas prosecutor. Blunt — who had been majority whip, the No. 3 Republican in the House — has taken over much of that role in DeLay's absence.
Spokesmen for the two Republican leaders say they disclosed what was required by law at the time and believe all their transactions were legal, though donors might not always have know where their money was headed.
"It illustrates what others have said, that money gets transferred all the time. This was disclosed to the extent required to be disclosed by applicable law, said Don McGahn, a lawyer for DeLay. "It just shows that donors don't control funds once they're given."
Blunt and DeLay planned all along to raise more money than was needed for the convention parties and then route some of that to other causes, such as supporting state candidates, said longtime Blunt aide Gregg Hartley.
"We put together a budget for what we thought we would raise and spend on the convention and whatever was left over we were going to use to support candidates," said Hartley, Blunt's former chief of staff who answered AP's questions on behalf of Blunt.
Hartley said he saw no similarity to the Texas case. The fact that DeLay's charity, Christine DeLay's consulting firm and Blunt's son were beneficiaries was a coincidence, Hartley said.
Much of the money — including one donation to Blunt from an Abramoff client accused of running a "sweatshop" garment factory in the Northern Mariana Islands (search) — changed hands in the spring of 2000, a period of keen interest to federal prosecutors.
During that same time, Abramoff arranged for DeLay to use a concert skybox for donors and to take a golfing trip to Scotland and England that was partly underwritten by some of the lobbyist's clients. Prosecutors are investigating whether the source of some of the money was disguised, and whether some of DeLay's expenses were originally put on the lobbyist's credit card in violation of House rules.
Both DeLay and Blunt and their aides also met with Abramoff's lobbying team several times in 2000 and 2001 on the Marianas issues, according to law firm billing records obtained by AP under an open records request. DeLay was instrumental in blocking legislation opposed by some of Abramoff's clients.
Noble said investigators should examine whether the pattern of disguising the original source of money might have been an effort to hide the leaders' simultaneous financial and legislative dealings with Abramoff and his clients.
"You see Abramoff involved and see the meetings that were held and one gets the sense Abramoff is helping this along in order to get access and push his clients' interest," he said. "And at the same time, you see Delay and Blunt trying to hide the root of their funding.
"All of these transactions may have strings attached to them. ... I think you would want to look, if you aren't already looking, at the question of a quid pro quo," Noble said.
Blunt and DeLay have long been political allies. The 2000 transactions occurred as President Bush (search) was marching toward his first election to the White House, DeLay was positioning himself to be House majority leader and Blunt was lining up to succeed DeLay as majority whip, the third-ranking position in the House.
The entities Blunt and DeLay formed allowed them to collect donations of any size and any U.S. source with little chance of federal scrutiny.
DeLay's convention fundraising arm, part of his Americans for a Republican Majority Political Action Committee (search) (ARMPAC), collected large corporate donations to help wine and dine Republican VIPs during the presidential nominating convention in Philadelphia in late summer 2000. DeLay's group has declined to identify any of the donors.
Blunt's group, a nonfederal wing of his Rely on Your Beliefs Fund, eventually registered its activities in Missouri but paid a $3,000 fine for improperly concealing its fundraising in 1999 and spring 2000, according to Missouri Ethics Commission records.
Both groups — DeLay's and Blunt's — were simultaneously paying Ellis, the longtime DeLay fundraiser who was indicted along with his boss in Texas in the alleged money laundering scheme.
The DeLay group began transferring money to Blunt's group in two checks totaling $150,000 in the spring of 2000, well before Republicans actually met in Philadelphia for the convention. The transfers accounted for most of money Blunt's group received during that period.
DeLay's convention arm sent $50,000 on March 31, 2000. Eight days later, the Blunt group made a $10,000 donation to DeLay's private charity for children on April 7, 2000, and began the first of several payments totaling $40,000 to a northern Virginia-based political consulting firm formed by DeLay's former chief of staff, Ed Buckham.
That consulting firm at the time also employed DeLay's wife, Christine, according to DeLay's ethics disclosure report to Congress.
Hartley said Blunt was unaware that Mrs. DeLay worked at the firm when he made the payments, and that she had nothing to do with Blunt's group.
On April 14, 2000, Concorde Garment Manufacturing, based in the Northern Marianas Islands that was part of Abramoff's lobbying coalition, contributed $3,000 to Blunt's group.
Hartley said the donation was delivered during a weekend of fundraising activities by Blunt and DeLay but his boss did not know who solicited it.
Concorde, derided for years in lawsuits as a Pacific island sweatshop, paid a $9 million penalty to the U.S. government in the 1990s for failing to pay workers' overtime. The company was visited by DeLay.
The company was a key member of the Marianas garment industry that the islands' government was trying to protect when it hired Abramoff to lobby DeLay, Blunt and others to keep Congress from imposing tougher wage and tax standards on the islands.
After the November 2000 election, Abramoff's firm billed its Mariana Islands clients for at least one meeting with Blunt and three meetings with Blunt's staff, billing records show. Abramoff's team also reported several meetings with DeLay and his staff on the issue, including one during the presidential convention.
On May 24, 2000 — just before DeLay left with Abramoff for the Scottish golfing trip — DeLay's convention fundraising group transferred $100,000 more to Blunt's group. Within three weeks, Blunt turned around and donated the same amount to the Missouri Republican Party.
The next month, the state GOP (search) began spending large amounts of money to help Blunt's son, Matt, in his successful campaign to become Missouri secretary of state. On July 25, 2000, the state GOP made its first expenditure for the younger Blunt, totaling just over $11,000. By election day, that figure had grown to more than $160,000.
Hartley said Blunt always liked to help the state party and the fact that his son got party help after his donation was a coincidence. "They are unrelated activities," he said.
Exchanges of donations occurred again in the fall. Just a few days before the November election, DeLay's ARMPAC gave $50,000 to the Missouri GOP. A month later, the Missouri GOP sent $50,000 to DeLay's group.