DeLay Foundation Exploits New Rules

Posted January 17, 2003 at 5:29pm

After engineering an abrupt reversal of rules that had prohibited lawmakers from accepting free trips and lodging in connection with charity events, House Majority Leader Tom DeLay intends to make quick use of the provisions. The Texas Republican will bring lobbyists and business executives together with lawmakers this April on the golf course of a South Florida resort known as “Fantasy Island” to pump an anticipated $1 million into a charity for abused children founded by him and his wife.

Fundraising for the Houston-based DeLay Foundation for Kids is being handled out of the Arlington, Va., office of a long-time DeLay fundraiser and lobbyist who recently joined the high-powered DCI Group, a GOP firm that counts dozens of top corporations as clients.

DeLay made little secret of the connection between his upcoming charity golf tournament and the unexpected rules changes adopted on the opening day of the 108th Congress weakening limits put in place in 1995 over the strenuous objections of then-Majority Whip DeLay.

“DeLay, in addition to other people, was supportive of this rules change so that Members could go, in large part,” DeLay’s spokesman Stuart Roy said. “Not that he has any interest in going somewhere, but so that he could get Members to come to the DeLay Foundation event and so that we could have additional leverage to raise money for abused, needy kids.”

The change in the charity travel provision, which came in tandem with the loosening of two other ethics provisions, shocked reform advocates and critics of the self-policing powers of Congress because they struck at the very heart of rules intended to restore public confidence in the institution during the mid-1990s. A majority of lawmakers in the House and Senate became convinced of the need to limit the freebies after a number of infamous television exposés showed Members of Congress frolicking on beaches, golf courses and ski slopes with high-priced lobbyists.

In creating the new loopholes, DeLay and the GOP leadership completely bypassed the House ethics committee, angering the panel’s chairman, Rep. Joel Hefley (R-Colo).

The House rules changes also surprised organizers for one of the best-known charity golf events, who said they were unlikely to revert back to the system of paying the travel expenses of lawmakers because Members of Congress had continued to attend the event even after the gift-ban provisions took effect.

“They provide their own travel and they pay for their own hotel rooms,” said Georgie Fenton, executive director of the Danny Thompson Memorial Golf Tournament, a four-day event held every August in Sun Valley, Idaho. “And I don’t expect that to change because it is working the way it is.”

The DeLay Foundation for Kids, a 501(c)3 organization that accepts tax-deductible donations, was formed in 1986 with the primary mission of aiding abused and neglected children in Fort Bend County, Texas, according to the foundation’s Web site, www.delayfoundation.org. DeLay and his wife, Christine, have long worked aggressively to aid abused youths and have been foster parents to three children.

Little-known outside of DeLay’s base in suburban Houston, the charity has raised more than $2 million, largely through the golf tournaments it has held each spring since 1995 at a Houston-area resort.

Over the past two years, the foundation’s goal’s has escalated dramatically, with plans to build a $6 million, 50-acre foster care facility in Fort Bend intended to provide a healthy environment for abused children who are unable to be placed in foster homes.

“The community will be a home for children in the foster-care system from the time they are removed from their biological parents until they can return home or be adopted. The community will include an assessment center, individual cottages with house parents, a chapel, support services, recreational facilities and a barn to house animals for pet therapy as well as children’s livestock projects,” according to an account in the Fort Bend Star.

Although ground won’t be broken on the Texas facility until later this year, the DeLays are already laying plans to make the project into a prototype that can be replicated on a national level, several people familiar with the foundation said.

So for the first time, the spring golf event will be held at the plush Ocean Reef Club in Key Largo, Fla.

“The Club is a wonderful tropical paradise, with the feel of Fantasy Island,” Tom and Christine DeLay wrote in an invitation posted on the Foundation’s Web site. The DeLays encouraged potential participants to bring their entire family to spend a portion of their spring recess with them for the event beginning April 13 and concluding on April 15.

“In addition to golf, this wonderful resort also offers tennis, swimming, fishing, spa packages, and much more,” the DeLays wrote.

“The Ocean Reef Club is an excellent spot for a fun-filled family vacation and we are delighted that you are considering this destination not only for your family, but also to help the DeLay Foundation for Kids,” according to a brochure on the group’s Web site.

The brochure describes in great detail the numerous golf, tennis, fishing and water-sports activities as well as enticing meals that will be offered to attendees.

Roy said the location of the event was switched to Florida in order to attract more participants and raise more money. Roy said he expected that a number of lawmakers will attend the three-day event and that the rules change will make it easier for lawmakers to participate.

“Obviously, if you have more Members there, there’s always some star power to that. It helps raise money,” Roy said.

Roy added that a handful of Members have attended DeLay Foundation events in the past.

The event kicks off with a private dinner for the top donors, who are being asked to give as much as $250,000. The event is seeking various levels of contributions: platinum ($250,000), gold ($100,000), silver ($50,000) and bronze ($25,000).

Tax returns for last year’s activities have yet to be filed. But a search of publicly available records disclosed that the AT&T Foundation gave the DeLay Foundation $25,000 in 2002.

The tax returns for DeLay’s charity also show that activity there ramped up sharply beginning in 2001, when the foundation launched a project to build the foster-home community center called the Oaks at Rio Bend.

In 2000, the DeLay Foundation raised just $31,195 from five contributors. The foundation supported a program that Christine DeLay has become personally involved with known as “Court Appointed Special Advocates,” which attempts to aid neglected youths. But the numbers skyrocketed in 2001 with the drive to build the $6 million foster-care center.

According to the DeLay Foundation’s most recent tax return, the spring golf tournament held in Houston in 2001 raised $527,660 in gross receipts. A fall golf event held that year outside of Washington, D.C., raised $57,500.

The identity of the contributors wasn’t disclosed. But the return showed that the charity took a single $250,000 donation. The form also reported a single contribution of $117,500, a $60,000 donation, and three $25,000 donations.

Neither Tom DeLay nor Christine DeLay serve on the board for the foundation, which is instead overseen by a board of directors made up of volunteers and community leaders from DeLay’s district. The group recently hired its first full-time executive director to oversee day-to-day operations in Houston.

Washington Strategies, a lobbying firm with connections to DeLay, was paid $67,070 by the foundation for fundraising work in 2001. Craig Richardson, who has served as a top fundraiser for DeLay and former Rep. Steve Largent (R-Okla.), has handled the foundation’s fundraising.

Richardson, whose lobbying registration forms list the same address in Arlington, Va., as the address listed for the DeLay Foundation on its Web site, has recently left Washington Strategies to join the DCI Group. DCI, founded by grassroots lobbying strategist Tom Synhorst, counts dozens of corporations as well as Republican candidates as clients. Several DCI principals have ties to senior White House political adviser Karl Rove.

During a brief phone call, Richardson confirmed that he worked on behalf of the DeLay Foundation. He did not return calls seeking additional comment. The Arlington building listed as the address for the DeLay Foundation on its Web site does not list the Foundation on its lobby directory. But the building does house a firm called Richardson Ziebart Consulting, LLC, in the suite cited for the foundation. Richardson’s longtime partner at Washington Strategies, which has moved to a different location in Arlington, is Geoffrey Ziebart, who is also now working at the DCI Group. Richardson and Ziebart also serve as executive director and corporate liaison for the American-Danish Business Council, a trade group seeking to promote ties between the United States and Denmark. The group lists the same address as the DeLay Foundation.

Roy, citing confidentiality rules that allow charitable groups to hide their lists of donors, said the DeLay Foundation would not reveal its contributors.

Reform advocates who had waged an often-bitter fight to enact the gift restrictions in the House and Senate in the mid-1990s were astounded to learn of DeLay’s golf event. “It makes it look like he created this little loophole for himself,” said Meredith McGehee, who now runs her own consulting firm. McGehee led the push for the ethics rules on behalf of Common Cause.

“DeLay always hated the change that was made in 1995. But he didn’t have the power then to stop it that he does now,” she said.

“What’s wrong with this is that you are basically using this charity as a means for special interests to buy time, often face time, with Members of Congress to advance the interests of their clients. There is a mutual back-scratching aspect to it. For the Members, they get to go to Fantasy Island, which generally they can’t afford to do on a Member’s salary. And they get a chance to meet people who can be turned into generous campaign contributors.”

In addition, lawmakers benefit from the publicity of raising money on behalf of noble causes while enjoying luxurious recreational facilities.

Roy scoffed at such contentions, arguing that lobbyists and lawmakers can already go on trips using campaign funds.

“We’re asking folks to give money for poor, abused, needy children. And we are proud to do it. I would also ask Common Cause and some of these other groups what they have done for foster children and kids most in need who are in danger of having their lives destroyed,” Roy said.

Roy insisted that the change to the House rules, which allows lawmakers to accept travel and lodging expenses from bona fide charity events, doesn’t benefit the lawmaker.

“It’s actually a benefit to the charity. That’s how you raise money, through star power, whether it’s a Member of Congress, the president of the United States or a movie star.”

But officials at the Danny Thompson golf event said they didn’t see any drop in contributions after their charity was no longer allowed to pay for lawmakers and their families to attend the well-known event in Idaho that attracts entertainment and sports celebrities to play golf and raise money for leukemia and cancer research. In fact, said Fenton, the tournament has raised more money each year after 1995, and the dire predictions that the charity would be hurt because lawmakers would stop attending never proved true.

“It surprised a lot of people, but the Members kept coming,” Fenton said. The tournament regularly draws about a dozen House Members and Senators, including Reps. Charlie Stenholm (D-Texas) and Dan Burton (R-Ind), and Sens. Don Nickles (R-Okla) and Conrad Burns (R-Mont).

Ralph Harding, who served in the House in the 1960s and founded the golf tournament with a partner in 1976, recalled in an interview the origins of the free trips for lawmakers to come out to Idaho.

Harding, a potato industry lobbyist at the time, wanted to convince then-Speaker Tip O’Neill (D-Mass), an avid golfer, to come to Idaho during the August break. “He said ‘Ralph, it will never work. You want us to go all the way to Idaho and take four days out of our vacations. It will never work. No one is going to do that.’”

But Harding persisted. “I said ‘Mr. Speaker, will you come?’ And he said ‘Ralph, for you I will. But on one condition. You get me a private plane. I don’t want to change planes in Chicago or Denver. If you get me a private plane, I will come.’ So, I said ‘I will get you one, Mr. Speaker.’”

Harding, though, wasn’t able to find a private plane to transport O’Neill. So instead, he said he bought four first-class tickets out of his own pocket to carry O’Neill and three other lawmakers, former GOP Leader Bob Michel (Ill.) and Reps. Dan Rostenkowski (D-Ill.) and Jamie Whitten (D-Miss.).

As the golf tournament grew in stature each year, it became much easier to arrange freebies for lawmakers, Harding noted. “Later on we did have people who did give us private aircraft. The defense companies that had a private plane, well they would let us use it.” And he credited DeLay, who has attended the event occasionally, with convincing a number of airlines to provide free trips to lawmakers. “Tom DeLay gave us a lot of help in those days because he was on the Transportation Committee,” Harding said.