Andrew Wheat

Indictment Heat Hits the Lobby

Tremors from the criminal investigation into Texans for a Republican Majority (TRM) PAC are reaching some top corporate lobbyists—a crowd that is to Tom DeLay’s power what hair follicles were to Samson’s fabled strength.

Tom “the Hammer” DeLay forged his extraordinary rise from bug exterminator to U.S. House Majority Leader by relentlessly shaking down special interests. With lobbyists in his advisory “kitchen cabinet,” DeLay organized the “K Street Project” in the 1990s to help Republicans grab more special-interest money in Washington. This scheme—named for the D.C. street that is home to many lobby shops—threatens corporations and trade groups with political reprisals if they hire Democrats as top lobbyists. DeLay and his cronies realized that the GOP gets more corporate money when a Republican heads the lobby. The K Street Project was as effective as it was crass. The House ethics committee, which few other lawmakers can arouse from its slumbers, admonished DeLay in 1998 for delaying an intellectual-property vote sought by the Electronic Industries Alliance because it was run by a Democrat.

The K Street Project hit Texas by 2002, when a D.C. lobby firm headed by former DeLay Chief of Staff Drew Maloney got a $360,000 state contract to promote Texas’ interests in Washington. Shortly after the disputed 2002 election, Governor Rick Perry, Lieutenant Governor-elect David Dewhurst and speaker-apparent Tom Craddick all appointed leading lobbyists to their transition teams or staffs. One of the first orders of business of Craddick transition-team lobbyists Bill Miller and Bill Messer was to solicit money from hundreds of other lobbyists for Craddick. Miller drafted a plan last year to make lobbyists “part of the Speaker’s Team” in exchange for material or financial support. After Miller’s firm mistakenly sent this proposal to the Dallas Morning News, Miller insisted that he never discussed it with his friend Craddick. In a rare split with the lobby, the speaker’s office denounced Miller’s account as “a lie.” Miller pitched Craddick on the idea in person, Craddick’s press secretary said, but failed to sell him on the idea.

Given the extent to which the corporate lobby has become an arm of powerful politicians in Washington and Austin, Texans for Public Justice recently conducted a dragnet of state and federal lobby filings. This search identified 11 Washington lobby firms and 11 Texas firms or solo lobbyists who worked for multiple TRMPAC donors in 2002. Together, these individuals and firms lobbied for 15 corporations that contributed $389,250 to TRMPAC—or 65 percent of TRM’s total corporate funding.

Craddick’s Kitchen Cabinet

More than half of the 17 Texas lobbyists who represented multiple TRMPAC donors in 2002 worked for three Austin firms: HillCo, Toomey & Associates, and Locke Liddell & Sapp. These firms left fingerprints all over Texas’ 2002 elections.

HillCo Partners

HillCo Partners’ lobbyists and clients have myriad ties to the TRMPAC scandal. The parent company of HillCo client Mariner Post Acute Network belongs to the indicted Alliance for Quality Nursing Home Care, Inc. (AQNHC). This nursing home trade group became TRMPAC’s top corporate donor when Craddick himself delivered the group’s $100,000 check to TRMPAC days before the 2002 election. HillCo also lobbied for Continental Airlines, which the grand jury subpoenaed to learn how it came to pledge $15,000 worth of airfare to TRM. Other 2002 HillCo clients include business affiliates of TRMPAC’s top non-corporate donors: homebuilder Bob Perry ($165,000 to TRM) and the PAC of Farmers Insurance Group ($150,000).

Ex-lawmaker Neal “Buddy” Jones founded HillCo Partners in 1998 with Bill Miller. Miller came from the MEM Hubble/Communications, a public relations firm, which once employed Governor Perry’s wife. Right after the disputed 2002 election, Craddick appointed Miller and Messer to his transition team, along with TRMPAC Treasurer Bill Ceverha. Messer accepted his Craddick appointment even though he was busy revamping a lobby shop called Toomey & Associates.

Toomey & Associates

Just after the 2002 election, Governor Perry appointed lobbyist Mike Toomey to be his new chief of staff. As Toomey —who lobbied for TRM donors AT&T and Philip Morris—prepared to hit the revolving door that November, he recruited Bill Messer and Toomey colleague Ellen Williams to reorganize his firm into the Texas Lobby Group. The new firm hired lobbyist Lara Laneri Keel away from the Texas Association of Business (TAB). That group faces a related grand jury probe into the $1.9 million in anonymous corporate money that it spent to support many of the same GOP House candidates that TRM backed.

When Toomey, Williams, and Messer rechristened Toomey & Associates as the Texas Lobby Group, an unnamed lobbyist told the Dallas Morning News that the new firm gave Toomey “a place to park his clients while he is on the governor’s payroll.” Last month Toomey resigned from the Governor’s Office amid rumors that his name could surface in a next wave of grand jury subpoenas and indictments. The grand jury already has subpoenaed Toomey colleague Ellen Williams and the PAC director of Texans for Lawsuit Reform, a Toomey client that backed most of TRM’s 2002 GOP House candidates.

Locke Liddell & Sapp

Lobbyists at Locke Liddell worked in 2002 for TRM-donors Burlington Northern, Gulf States Toyota and Houston beer distributor Silver Eagle. In 2002 Locke Liddell also employed attorney Andy Taylor, who arguably had more fingers in the 2002 election scandals than any other political operative. A one-time clerk to Texas Supreme Court Chief Justices Tom Phillips and John Hill, Taylor joined Hill at Locke Liddell before then-Attorney General John Cornyn appointed him assistant attorney general in 1999. Cornyn and Taylor then steered $800,000 in legal work to Taylor’s old firm to help vet the state’s initial efforts to redraw congressional districts after the 2000 Census.

Taylor became busier than ever after the disputed 2002 election. He advised TRM and TAB, which now were fighting civil and criminal allegations that the $2.5 million in corporate money they collectively spent to influence those elections violated Texas’ severe restrictions on corporate electioneering. (Taylor later stepped down as TRMPAC’s lawyer.) As DeLay’s redistricting plans got underway, new Attorney General Greg Abbott hired Taylor as one of his outside redistricting lawyers. Starting this gig at Locke Liddell, Taylor continued to represent the state on redistricting after launching his own firm in April 2003. Taylor’s dizzying roles in the scandals surrounding the 2002 elections prompted recurring ethical questions. In one posed during the thick of the 2003 redistricting fight, Democratic Senator Royce West asked, “Why is the AG allowing Tom DeLay’s attorney to draw the [redistricting] map for the state of Texas?”

DeLay’s Kitchen Cabinet

Many of the 11 D.C. lobby firms that represented multiple TRM donors in 2002 have close ties to DeLay or Joe Barton. Both Texas Congressmen are involved in TRM-related controversies. Internal e-mails from indicted TRM-donor Westar Energy suggest that four Republicans in Congress (Senator Richard Shelby and Congressmen DeLay, Barton, and Billy Tauzin) directed Westar to channel $56,500 to TRM and other GOP candidates and committees in exchange for support for Westar’s legislative agenda. All of the Westar Four except Senator Shelby also visited Austin three years later to huddle with top state leaders as they drafted new congressional districts, according to official calendars of Governor Perry, Lieutenant Governor Dewhurst, and Speaker Craddick.

Alexander Strategy Group

Former DeLay staffers Ed Buckham, Karl Gallant, and Tony Rudy all went on to form the Alexander Strategy Group, which lobbied in 2002 for TRM donors AT&T and Questerra Corp. Gallant once directed TRM’s federal cousin, Americans for a Republican Majority (ARM) PAC. DeLay disclosed to Congress that the Alexander Strategy Group paid his wife $40,000 a year, the Fort Worth Star-Telegram reported in 2002. A DeLay spokesperson told the Star-Telegram that Christine DeLay actually was paid to help run ARMPAC.

Federalist Group

Top lobbyists at the Federalist Group include former DeLay aides Drew Maloney and Chris Lynch, as well as Stewart Hall, an ex-legislative director for Westar Four Senator Richard Shelby. This firm’s 2002 client list included the state of Texas as well as TRM donors Reliant Energy and El Paso Corp. A new client for this firm is the Texas Energy Center, which recently won a $3.6 million state grant from Governor Perry to build a research facility at the University of Houston Sugar Land campus—in DeLay’s backyard.

Preston Gates Ellis & Rouvellas

Although Preston Gates just lobbied for one TRM donor, Burlington Northern, this lobby firm itself contributed $25,000 to TRM. Two close DeLay associates also lobbied at Preston Gates until 2001: former DeLay aide Michael Scanlon and DeLay pal Jack Abramoff. Congress, the FBI, and a D.C. grand jury are investigating tens of millions of dollars that Scanlon and DeLay pal Jack Abramoff charged Indian tribes to promote casinos. In one remarkable deal, the duo first got paid to rally support behind Texas Attorney General John Cornyn’s February 2002 closing of a Tigua tribal casino in El Paso. Then Abramoff convinced tribal leaders (whom he privately derided as “stupid” and “moronic”) to pay him and Scanlon $4.2 million to try to reopen that same casino.

Barton’s Kitchen Cabinet

Former aides of House Energy and Commerce Chair Joe Barton lobby at three firms that represented multiple TRMPAC donors. Barton’s ex-legislative counsel, Stephen Sayle, is at Dutko Group, which lobbied in 2002 for TRM donors AT&T, PacifiCare, and Maxxam. Stephen Waguespack, Barton’s ex-legislative director, lobbies at Alpine Group, which represented TRM donors AT&T and El Paso Corp. Finally, ex-Barton aide Jeffrey MacKinnon is a partner at Ryan Phillips Utrecht & MacKinnon, which lobbied for TRM donors Reliant and Williams Companies.

Many lobby firms that represented multiple corporate TRM donors have close personal ties to DeLay, Barton, and Craddick, and to politicians involved in the 2002 Republican takeover of the House, as well as ties to the subsequent redrawing of Texas’ congressional districts. These firms’ lobbyists were well situated to help politicians and corporate donors coordinate political expenditures. How high up the political food chain prosecutors climb in the TRM and TAB probes presumably hinges on a key question: Is it by coincidence or coordination that these politicians, corporations, and consultants keep cropping up along TRM’s corporate money trail? Strong evidence of conspiratorial coordination might put powerful politicians on the prosecutorial hot seat.

Andrew Wheat is research director of Austin-based Texans for Public Justice.

Andrew Wheat is the research director for Texans for Public Justice.

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