DeLay Committee May Have Misspent Funds

WASHINGTON – A political committee founded by House Majority Leader Tom DeLay (search) may have improperly spent unregulated "soft money" on get-out-the-vote and fundraising activities, the Federal Election Commission says. A DeLay attorney said Thursday the money has been reimbursed.

Americans for a Republican Majority Political Action Committee "potentially" spent about $203,000 in soft money from its nonfederal account to pay for the political activities and administrative expenses, the FEC found in an audit.

ARMPAC (search) has federal and nonfederal accounts that shared certain expenses. The federal account could contain only money subject to federal contribution limits and from individuals and PACs, or hard money. The nonfederal account was not subject to federal regulation and could accept soft money, which can include contributions from corporations and labor unions.

The FEC audit also found that DeLay's committee failed to report more than $300,000 in debts owed to 25 vendors and reported its finances erroneously. DeLay attorney Don McGahn said debts were paid but not in the time prescribed by the FEC. The expenses included eight fundraising events, two each held at Four Streams Golf Club in Beallsville, Md., and a resort in Humacao, Puerto Rico, and others in Orlando, Fla., California, New York and Hackberry Creek Country Club in Irving, Texas.

"Everything in this audit is accounting issues," McGahn said. The committee has filed amended reports and taken other steps recommended by the FEC, the audit said.

Using soft money to cover a bigger share of overhead could give a candidate or party an unfair advantage by freeing up hard money to use for direct candidate support.

The Federal Election Commission (search) has the option of pursuing enforcement action against Americans for a Republican Majority Political Action Committee, but the report didn't indicate whether it would. Bob Biersak, an FEC spokesman, said an audit is not an enforcement action. He said similar audits of political committees have been done on occasion.

The audit was posted on the Web site of PoliticalMoneyLine.com, which tracks political fundraising and spending. Its contents were made available earlier to ARMPAC officials, who filed corrected reports in May and June.

A spokesman for DeLay referred calls to his attorneys.

ARMPAC's executive director, Jim Ellis, was indicted in Texas in connection with a separate DeLay-related committee, Texans for a Republican Majority. In that case, Ellis is charged with money laundering in connection with contributions for state legislative campaigns in 2002. DeLay has not been accused of any wrongdoing in the case. He has called the investigation a political witch hunt.

District Attorney Ronnie Earle declined comment. ARMPAC records were subpoenaed by the grand jury for the investigation.

Watchdog groups said the FEC audit raises questions about whether similar activities were occurring with the Texas committee, which also had an account for limited, individual contributions and one for corporate, unlimited money.

"Is this the tip of the iceberg? We don't know," said Tom Fitton, president of Washington-based Judicial Watch.

The groups also questioned whether ARMPAC soft money assisted Texas campaigns. ARMPAC contributions totaling $24,000 were given to Texas Republican legislative candidates in 2002. The checks sent to them included DeLay's name and title as the PAC's chairman.

DeLay attorney McGahn scoffed at attempts to link the audit to the Texas case.

"They are reading an esoteric, minutiae question about overhead ratios that has been concocted by the FEC, that is no longer the law ... into a whole 'nother entity in Texas. And I'm going to wear tinfoil on my head so they can't hear my thoughts," McGahn said. "This has nothing to do with the Texas situation."