DeLay's Fundraising Group Fined

U.S. Rep. Tom DeLay, right, reaches to shake hands after he voted in the Republican primary at Clements High School Tuesday, March 7, 2006, in Houston. (AP Photo/Houston Chronicle, Carlos Antonio Rios)
AP/HoustonChronicle
The fundraising organization that helped vault former Rep. Tom DeLay to GOP leadership and distributed election money to numerous fellow Republicans has been fined for campaign finance violations and is shutting down.

Under an agreement with the Federal Election Commission, Americans for a Republican Majority's political action committee agreed to pay a $115,000 fine and close. The agreement, reached July 7, was made public late Wednesday.

The agreement resulted from an audit by the FEC of the committee's records for Jan. 1, 2001 to Dec. 31, 2002. The audit found DeLay's committee had not properly reported contributions, disbursements and cash on hand.

It also found the committee failed to properly report outstanding debts and obligations and did not follow federal rules for paying for shared federal and nonfederal activities.

The audit was conducted last August. Citizens for Responsibility and Ethics in Washington, a watchdog group, had filed a complaint calling for enforcement action against the committee.

"The reason DeLay became so powerful was all about the money, the amounts of money he could pull in and could distribute to his colleagues," said Melanie Sloan, the watchdog group's executive director. "Nearly every Republican in Congress received money from ARMPAC, thus consolidating his power base. They loved him because he kept them flush. Now we find out, they brought in huge amounts of money, but they did it illegally."

Dani DeLay Ferro, DeLay's spokeswoman and his daughter, said the fine and shutdown of ARMPAC were voluntary. The audit "concerns highly technical FEC reporting rules, which due to their complexity, the commission has since reformed and simplified," Ferro said in a statement.

The FEC said ARMPAC corrected financial errors in its fundraising reports and refunded $111,913.19 to its nonfederal account. ARMPAC officials told the FEC that some of the mistakes were the result of misinterpretation or failure to understand the agency's regulations. The group disagreed with FEC counting some transactions as debts and obligations.

The FEC audit found that ARMPAC:

  • Failed to report $74,295 in financial activity in 2001 and $166,340 in 2002.
  • Failed to report debts and obligations totaling $322,306 to 25 vendors.
  • Failed to separate expenses between its federal and nonfederal account, resulting in the nonfederal account paying $203,483 more than its allowable expenses.

    ARMPAC officials told the FEC they can't raise the money to refund $91,569.81 to the nonfederal account and agreed to use any contributions exceeding $5,000 to pay the debt and will not spend more than $5,000 until the debt is paid. DeLay's campaign fundraising committee bought ARMPAC's donor list for about $34,000.

    The political committee also provided seed money for DeLay to launch Texans for a Republican Majority, the fundraising committee at the center of a Texas election fundraising investigation. DeLay was charged with money laundering in connection with that investigation, triggering Republican House rules that forced him to relinquish the majority leader post while the charges were pending. DeLay denies the charges.

    DeLay resigned from Congress June 9 after more than two decades in the House. He had planned to withdraw from the race for his District 22 House seat, but a judge's ruling in a Democratic lawsuit forced DeLay to remain on the Texas ballot. The state's Republican party leader is appealing that decision, which DeLay has criticized.