Burnt Orange Report

Tomstown: A Primer

By Andrew Dobbs

Well, I had no idea how important our little outpost here in the nether regions of the blogosphere really was to some people. I get an email today from a political hack buddy of mine and he berated me for not talking more about the Tom Craddick scandal because many of his Austin friends get all of their Texas news from us and we had dropped the ball- they had no idea that our illustrious speaker might very well be indicted in the near future. I suppose because I spend so much time looking at this stuff at work I get desensitized to how important and how obscure some of this stuff is. As a service to all of you who do not know the details, I am putting together this introduction to the scandal now being called "Tomstown."

The scandal's name is a play on the legendary real estate scandal that brought down the House Speaker, Attorney General and dozens of State House members in the early 1970s known as "Sharpstown" involving the first name of both the main culprits- Tom Craddick and Tom DeLay. The best introduction to this scandal was in this week's Austin Chronicle. As they explain:

The Tomstown Scandal refers to a series of grand jury investigations and lawsuits – and propaganda barrages and mudslinging – spawned during the execution of the Toms' strategy of conquest. The two main groups whose activities are under scrutiny are the Texas Association of Business, a pro-GOP group with connections to both Toms, and the Texans for a Republican Majority political action committee, created by DeLay to secure GOP control of the Texas Legislature. Both groups are accused of violating Texas election law during the 2002 state elections – into which TAB and TRMPAC poured around $4.5 million – and during Craddick's subsequent campaign to become speaker of the house. (..)

The Election Code (Chapters 253 and 254) does forbid 1) contributions by corporations or labor unions to political campaigns (a provision that dates back nearly 100 years); 2) "coordination" between corporate-funded efforts and political candidates; and 3) campaign expenditures that are unreported to the TEC. The Tomstown Scandal involves alleged violations of all three areas of the law, as well as of the "Speaker Statute" – a law passed in the wake of Sharpstown that forbids speaker candidates from exchanging "anything of value" in return for pledges of support from House members. Investigators are now reviewing the records of Craddick, his predecessor Pete Laney, and other 2002 speaker candidates, following allegations of irregularities by PACs in the speaker campaigns. (...)

The money rolled in, and the money flowed out. By law, corporate money can only be used in Texas campaigns for "administrative overhead" – office rent, utilities, supplies, and other basic expenses that would be necessary in any business. Apparently, TRMPAC either decided to ignore those restrictions or to redefine "overhead" to mean all expenses not directly spent on specific campaigns. So corporate cash paid for polling, fundraising, telemarketing, and salaries for Colyandro and others. More than $100,000 in soft money went to political "consultants," including Robold, Susan Lilly, Kevin Brannon, telemarketing firm Contact America, and even DeLay's daughter Danielle Ferro (of Coastal Consulting of Sugar Land). Those expenditures were not disclosed to the state Ethics Commission.

Meanwhile, the TAB's own public relations contractor, Chuck McDonald, says he was occasionally uncertain whom to bill for those nonpolitical "voter education" mailers; both Colyandro and Mike Toomey consulted with Hammond and McDonald about the nature and targets of the TAB ads, suggesting illegal coordination to critics and investigators. But "communication," says TAB lawyer Andy Taylor, "is not coordination."

Also intriguing is the $190,000 in corporate money that TRMPAC donated to the Republican National Committee in September of 2002. Two weeks later, the RNC obligingly donated the identical sum to a handful of Texas candidates. Laundering of corporate dollars? "Coincidence," say the TRMPAC lawyers. It appears, however, that TRMPAC provided a blank check to Jim Ellis for the RNC, with the precise amount to be determined later – and it just happened to total $190,000.

But wait, there's more. Funds totaling $152,000 from the Union Pacific railroad's PAC – by agreement with TRMPAC – were distributed to Texas House candidates either by Craddick himself or by his staff. This revelation piqued interest into whether Craddick had exchanged cash for support of his speaker's race, in direct violation of the speaker's statute. (...)

Travis Co. District Attorney Ronnie Earle began investigating the TAB campaign when the group started bragging about its victories in those legislative races in which it supposedly stood by, innocently "educating" voters, which prompted the defeated Democrats' lawsuits. Meanwhile, Texans for Public Justice reviewed TRMPAC's state filings and discovered that they didn't match its IRS filings – particularly in the matter of corporate donations and expenditures – thus suggesting misdeeds similar to, and linked to, those of the TAB. Common Cause, Public Citizen, and the Texas Consumer Association all weighed in, asking the authorities to investigate what they called "numerous, admitted, and blatant criminal violations of state campaign finance laws."

After a year's worth of investigation, it's likely that Earle, Cox, and the grand jury will hand down indictments of at least a few players, but that still may be months away. In the meantime, the civil suits methodically proceed. On Friday, the TRMPAC trial was postponed from March 29 until the summer. Defendant Jim Ellis is expected to contest being forced to return to Austin from D.C., where he officially resides, for that trial.

That's a lot of text I know, and it seems kind of boring but it is pretty explosive. Texas banned corporate political donations more than a century ago and banned trading speaker votes for money after the previous huge Austin scandal in the 70s. Tom DeLay's PAC joined with TAB, essentially a GOP front group, and laundered corporate cash in various ways to send out millions of dollars to GOP candidates across the state. Tom Craddick personally handed out huge checks from railroad companies in return for speaker votes (somewhere, Jim Hogg is rolling in his grave). These two things are big no nos and someone will go to jail for them.

What remains to be seen is if the Toms themselves will go down or if someone a little lower level will take the fall. Smart money is on the latter, but this kind of scandal is the sort of thing that brings down big name politicians. While it is still confusing, the image of Tom Craddick heeling around the capitol handing out huge checks with a wink and a grin like some kind of Machine Boss is one that will stick in people's minds. The scandal boils down to taking (and using the RNC to launder) illegal money and then trading that money for votes. Expect this story to get even bigger very soon.