Oxley Faces Mounting Legal Bills

Powerful Chairman’s Relationship With K St. at Center of Probes

Posted March 19, 2004 at 2:08pm

House Financial Services Chairman Mike Oxley (R-Ohio) paid more than $72,000 in legal fees last year as the powerful chairman found himself facing allegations that he and several of his aides improperly pressured a mutual-fund industry group to hire a Republican lobbyist.

Oxley has also been caught up in the recent controversy surrounding R. Mitchell Delk, the former top lobbyist for mortgage giant Freddie Mac.

Delk was ousted from his high-profile post after it was revealed that Freddie Mac has asked the Federal Election Commission to review Delk’s fundraising activities, which include 24 fundraisers with Oxley during 2001 and 2002.

Those events netted tens of thousands of dollars in campaign contributions for members of the Financial Services Committee, which has jurisdiction over Freddie Mac.

Oxley has previously denied wrongdoing in both cases, although he will not comment publicly now.

The 12-term lawmaker saw his legal bills soar last year, and that total could increase as the FEC’s investigation of Delk moves forward.

From Jan. 1 to Dec. 31, 2003, Oxley’s re-election campaign paid $72,836 to the Washington law firm Bracewell Patterson LLP.

Partners at that firm include former Rep. Ed Bethune (R-Ark.), who defended House Majority Leader Tom DeLay (R-Texas) during an unsuccessful racketeering lawsuit brought by Democrats four years ago. Bethune declined to comment for this article.

In all of the previous election cycle, covering both 2001 and 2002, Oxley paid just $7,025 in legal fees to the firm Baker & Hostetler LLP.

Questions about Oxley’s actions began after The Washington Post reported in February 2003 that Republicans had sought to supplant Julie Domenick of the Investment Company Institute with a GOP lobbyist.

ICI officials were reportedly told by two Oxley aides that the Financial Services panel would hold off on an investigation of mutual fund companies and their business practices if Domenick, a Democrat and the organization’s executive vice president, was either replaced with a GOP lobbyist or if ICI hired a well-known Republican to work with her.

House Democrats charged that the incident was another example of why they believe the “K Street Project” has been conducted in an unethical — if not illegal — manner.

The project is an effort by DeLay and other powerful GOP lawmakers to pressure lobbying firms, corporations and trade associations to hire Republicans and give donations to GOP campaigns.

ICI did eventually hire a Republican lobbyist who reports directly to Domenick, but Oxley strenuously denied that he or his staff had acted improperly.

The House ethics committee privately began an “informal fact-finding” probe of Oxley and two of his aides, Robert Foster and Sam Geduldig, who has since moved to another leadership office, an investigation that has apparently ended with no charges being brought against Oxley or his staff.

Delk’s recent ouster from Freddie Mac, and the subsequent announcement by the organization that it wanted the FEC to review his fundraising activities, has brought new problems for the veteran Ohio lawmaker.

Oxley headlined 24 fundraising events put on by Delk at the upscale Galileo restaurant, out of a total of roughly 50 during a two-and-a-half-year period, according to the watchdog group Public Citizen.

More than a dozen of the dinners benefited members of the Financial Services Committee, which oversees Freddie Mac. The company, a government-sponsored enterprise, has been involved in an accounting scandal that forced it to restate financial earnings by $5 billion in a three-year period.

Delk used Epiphany Productions, a GOP fundraising firm whose principals include Julie Wadler, a former top National Republican Congressional Committee official, to organize the events.

Galileo gave a Delk a special rate for the dinners, a move that may have been done to avoid in-kind contribution limits to candidates, although there is some question about whether those limits were in fact broken.

Epiphany was apparently not paid by the various lawmakers’ campaigns for its work on some events or paid only after a long delay, another potential violation of election law.

As a result of the ensuing controversy, Public Citizen filed a complaint with the FEC against both Delk and Epiphany last October.

Kenneth Gross, a former FEC general counsel who is now Delk’s lawyer, insisted his client had “done nothing wrong,” although he declined to comment further on the status of the FEC probe.