Deal Struck

Posted December 10, 2004 at 6:12pm

Travis County District Attorney Ronnie Earle, who is investigating the activities of a Texas political action committee founded by House Majority Leader Tom DeLay (R-Texas), has cut a deal with one of the companies indicted for giving to the fund. [IMGCAP(1)]

Diversified Collection Services was one of eight corporations charged in September by a Travis County grand jury with making prohibited political contributions to Texans for a Republican Majority PAC. Three DeLay aides have also been indicted in the case. Earle is probing whether TRMPAC illegally funneled corporate funds to Texas state candidates during the 2001-02 election cycle. Corporate funds cannot be used in Texas state races.

Diversified, a San Leandro, Calif.-based collection company, gave $50,000 to TRMPAC in June 2002. Under the agreement with Earle, Diversified has agreed to stop making corporate donations in Texas state elections, according to a copy of the document released by Earle’s office. In return, the felony indictment against Diversified is being dropped.

Diversified will also “cooperate with the State of Texas in its prosecution of any other indicted person for any offense related to the corporate contribution” made by the company.

Inaugural Ethics. The House ethics committee is reminding Members, especially newly elected lawmakers, that lobbyists and corporations cannot pay the costs of their receptions or parties after being sworn in next month.

In a Dec. 7 memo to all new Members, as well as incumbents and staffers, Reps. Joel Hefley (R-Colo.) and Alan Mollohan (D-W.Va.), chairman and ranking member of the ethics panel, said the committee “has received several inquiries, the substance of which is whether it is permissible for a lobbying firm or other private entity to pay the costs of a Member’s swearing-in or Inauguration Day reception.”

Hefley and Mollohan cautioned that “such arrangements are not permissible” under House rules. Members and aides are not permitted to accept any single gift worth more than $50.

Hefley and Mollohan also noted that “Inaugural-related events are fully subject to the House gift rule.” However, Members and staff can accept free tickets to “widely attended” political or official events such as a state society party, provided the invitation comes from the organizer of the event.

— John Bresnahan