With no personal wealth to fall back on, Rep. Tom DeLay (R-Texas) faces mounting legal and financial troubles even as he flees a thicket of ethical scandals inside a chamber he dominated for more than a decade.
DeLay is still facing an Austin, Texas, trial on campaign finance charges later this year, and the workings of his old leadership office continue to be under the microscope of federal investigators probing the previously hidden lobbying transactions of Jack Abramoff.
DeLay appears to have even acknowledged that another former staffer will face an indictment or cut a plea agreement with the Justice Department. In an interview with Time magazine Monday, DeLay said three former aides had “violated the trust of my office.”
“Unfortunately, there’s three ... that I don’t yet, I’ll wait until they’re found guilty,” he told Time.
That appears to be a reference to Ed Buckham, a former DeLay chief of staff who was implicated in Friday’s plea agreement by former DeLay deputy chief of staff Tony Rudy. So far, Rudy and former press secretary Michael Scanlon are the only ex-DeLay staffers to have pleaded guilty as part of Abramoff’s more than seven-year conspiracy to win official favors on Capitol Hill and in the Bush administration.
Any official legal move against Buckham would draw the case that much closer to
DeLay, because Buckham has been considered his most trusted adviser, personally and politically, even after leaving DeLay’s office in December 1997.
Buckham and Rudy previously had been using the services of the same lawyer, Laura Ariane Miller, but Miller has declined repeated requests from news organizations to say if she’s still representing Buckham at a time when Rudy has singled him out in his own plea agreement. Buckham previously has denied any wrongdoing.
Once DeLay leaves office later this spring, it’s unclear how he’ll be able to meet his ever-rising legal bills. He has been using a legal defense fund to defray most of the costs, a fund that continues to raise money in increments of up to $5,000 per contributor, per year, under House rules.
Brent Perry, the fund’s trustee, said it brought in more than $250,000 in the first quarter this year, money that was instantly turned around and paid to lawyers, leaving the fund nearly exhausted.
Perry rejected reports that the defense fund had more than $500,000 in its coffers at the end of 2005, saying, “Anytime I’ve had six figures in the trust, it’s only been a matter of days before the money was spent.”
If his backers are still willing to support him financially as an ex-Congressional leader, DeLay may be able to finance his debt through big-money donors with a private defense fund once he retires. Funds for private sector individuals, such as the one that recently raised more than $2 million for indicted former White House aide Scooter Libby, can accept unlimited donations from individuals and corporations. Those donations are not tax deductible for contributors and may run into gift-tax issues as well.
But as he heads for the exit, DeLay is left without any obvious personal wealth to use to pay legal bills.
When he first rose to national prominence in the mid-1990s, DeLay had little in the way of savings. A disclosure form detailing his personal finances at the end of 1997 showed that, other than his personal residence, DeLay had only $60,000 to $150,000 in holdings, the lion’s share of it in Exxon Inc. stock.
Seven years later, DeLay held $80,000 to $200,000 in assets, split between Exxon stock and accounts with Wells Fargo and Charles Schwab, according to his 2004 disclosure form. However, at that time, DeLay was a net debtor, having already accumulated legal bills running from $125,000 to $260,000.
In addition to his home in Sugar Land, Texas, where he intends to retire, DeLay owns a condominium in Alexandria, Va., and for the time being he will need to retain the condo because he needs to use that as his new permanent residence in order to get his name off the Texas Congressional ballot in November.
An estimate from the National Taxpayers Union found that, at most, DeLay could expect $56,000 a year from his pension for almost 22 years of Congressional service. However, it is unclear if he immediately can begin receiving his full pension or wait three years until he turns 62.
As Roll Call reported in February, DeLay began earlier this year to dip into his campaign account to defray some of the costs related to the Abramoff probe. In mid-February, while still preparing for a re-election battle that he thought would cost close to $10 million, DeLay’s campaign was sitting on $1.3 million.
It’s unclear how much of that money was spent in beating back several challengers in the March 7 primary, or to what level the campaign fund was replenished in the final weeks of March.
Any leftover campaign funds could now be used to pay his legal bills, the course followed by ex-Rep. Duke Cunningham (R-Calif.) after his recent resignation and by ex-Sen. Bob Torricelli (D-N.J.) after he bowed out of his re-election amid ethics allegations in 2002.
But DeLay — who prided himself on creating a “team” attitude in the GOP Conference that involved giving contributions to colleagues, candidates and party committees — may feel peer pressure to turn over a large chunk of that cash to lawmakers or the National Republican Congressional Committee, as is allowed under the law.
In the two months before his GOP primary, DeLay was on the receiving end of a financial outpouring from his colleagues, taking in almost $100,000 from the campaign accounts of fellow House Republicans, their political action committees and their relatives, according to reports filed with the Federal Election Commission.
Even if DeLay decides to use a substantial chunk of his campaign committee’s cash to pay for lawyers, it’s unclear whether that will be enough to cover the mounting costs.
After his campaign paid $110,000 in February to McGuire Woods, home to Richard Cullen, the lawyer handling the Abramoff matter, DeLay’s legal payments topped $1 million since July 2004, according to records with the House and the FEC.
But his bills have only soared since and will continue to do so, particularly once the Texas trial approaches and commences, and the team of lawyers working on the Abramoff investigation continue to bill hours at a high rate.
The recent agreement the Justice Department worked out with Rudy officially placed the Abramoff scandal squarely inside DeLay’s leadership office, as Rudy pleaded guilty to a criminal conspiracy that began in 1997, when he was DeLay’s press secretary, continuing through his rise to deputy chief of staff and then into the lobbying world in 2001.
Without officially naming Buckham, the plea agreement clearly identifies him as someone who at times worked hand-in-hand with Abramoff as a co-leader of the conspiracy, working with the confessed felon to funnel $86,000 to Rudy’s family while he worked for DeLay in exchange for official favors.
In addition, the plea agreement covers events through 2004, meaning that Rudy — who left Abramoff’s firm and went to work for Buckham at his Alexander Strategy Group in mid-2002 — has admitted to committing crimes while working for two-and-a-half years at Buckham’s side.