"Behind every great fortune is a crime," wrote French novelist Honore de Balzac in words that could have been penned by Karl Marx. That invidious assessment is in need of a crucial clarification: every political fortune is built on crime--generally in the form of what Frederic Bastiat called "official plunder." When viewed in that light, Balzac's cynical maxim may apply to the ongoing travails of Representative Tom DeLay (R-Texas), the former House majority leader.
Within a week, Rep. DeLay was indicted by two separate grand juries in Texas. The first indictment accused DeLay of conspiring to funnel illegal campaign contributions to Republican candidates for the Texas state legislature; the second charged the congressman with conspiracy to commit money-laundering. The congressman is accused of redirecting $190,000 in corporate campaign donations through an arm of the Republican National Committee to 2002 Republican state election campaigns in Texas. This would constitute a violation of state law, which does not permit campaign donations from corporate interests.
According to the indictment, a group called Texans for a Republican Majority (TRMPAC) raised money directly from corporate contributors and then donated the corresponding amount to a branch of the Republican National Committee, which then disbursed the $190,000 to state legislative candidates.
Predictably, Congressman DeLay reacted to the first indictment by accusing Travis County District Attorney Ronnie Earle, who is building the case, of being a "rogue prosecutor" conducting a "partisan witch hunt." He also insists that the funds were transferred from Washington to Texas without his approval. During an August meeting with Earle, DeLay admitted--although not under oath--that he was aware that the money raised by TRM-PAC was being routed to state candidates by way of the Republican National Committee; however, he insists that he was advised that the process was legal.
Forced by Republican Party rules to surrender his leadership position, Rep. DeLay has been ordered to appear in an Austin, Texas, courtroom on October 24. Understandably, supporters of the Democratic Party--and their allies in the media--relish the prospect of DeLay's humiliation. However, Dick DeGuerin, DeLay's defense attorney, warned that "anyone expecting to see DeLay handcuffed and paraded before cameras in a so-called 'perp walk' will be disappointed," reported the Houston Chronicle.
Private vs. Political Perpetrators
It may seem excessive to heap such public disgrace on an individual accused of what could be construed as a technical violation of an obscure bookkeeping regulation. But it should be remembered that Congressman DeLay himself has endorsed the ritual humiliation of corporate leaders accused of financial misdeeds.
"We need to strip corrupt corporate kingpins of their ill-gotten gains," blustered DeLay in a June 2002 press conference. "We're going to shackle them and take them to jail. We're taking the mansion. We're draining the accounts. And we're coming after the yacht." The congressman's comments were made in reaction to disclosures of accounting fraud by the corporate leadership of such firms as Enron and WorldCom--and the widespread perception that the Republican Party displayed an improper sympathy to corrupt corporate interests.
DeLay and other GOP congressional leaders, for purposes of partisan political advantage, decided to act "on the premise that 'business is theft,'" recalls former Treasury Department official Paul Craig Roberts, by enacting--with DeLay's enthusiastic support--the Sarbanes-Oxley Act of 2002. That measure effectively "tarred all corporate executives with the misbehavior of a few," Roberts continued, by permitting the federal government to micromanage and second-guess all corporate financial operations--in essence, turning bookkeeping errors or inaccurate but honest financial projections into prosecutable felonies.
"Today's message from Congress to CEOs and corporate boardrooms is clear," proclaimed House Speaker Dennis Hastert (R-Ill.) following the measure's passage. "If you steal, cheat or commit some other white-collar crime, you'll face the same consequences as law-breaking street thugs by spending time behind bars." (Emphasis added.) Stealing and cheating were already illegal, of course--which begs this question: what are these unspecified "other white-collar crimes"? Most likely, those "crimes" would consist of any corporate decisions or practices that attract the interest of federal prosecutors who possess ambition and inventiveness similar to that displayed by Ronnie Earle of Texas.
"One of Sarbanes-Oxley's most onerous provisions makes every member of a company's board of directors, as well as the company's chief executive officer, criminally liable if they fail to catch accounting errors," observes Representative Ron Paul (R-Texas). The mandates prescribed by Sarbanes-Oxley "have caused directorship, accounting, audit, and legal fees to double," he continues. "In addition, the cost of directors' liability insurance has almost doubled since Sarbanes-Oxley became law. Not surprisingly, the impact of these new costs hit small businesses especially hard--the traditional engine of job creation in America."
Rep. Paul, who has sponsored legislation to repeal the most egregious elements of Sarbanes-Oxley, points out that "every state in the nation has fraud laws on the books, and the market responded to Enron rumors well before Congress held any hearings on the matter. Once again, Congress has presumed to understand what it does not, and regulate what it has no authority to regulate."
The purpose of Sarbanes-Oxley and similar measures is not to protect businessmen, investors, or consumers, but to create a regulatory system that operates much like a protection racket. The behavior of Congressman Michael Oxley (R-Ohio), a cosponsor of that "reform" legislation, offers a splendid illustration of that protection racket in action.
Writing in the June 23 New York Review of Books, Elizabeth Drew described how Oxley, chairman of the House Financial Services Committee, "put pressure on the Investment Company Institute, a consortium of mutual fund companies, to fire its top lobbyist, a Democrat, and hire a Republican to replace her" A total of six sources, both Republican and Democrat, recounted to the Washington Post "that members of Oxley's staff told the institute that a pending congressional investigation of mutual fund companies 'might ease up if the mutual fund trade group complies with their wishes," recalled Drew. "It apparently didn't matter to them that House ethics rules prohibit congressmen or their staffs 'from bestowing benefits on the basis of the recipient's status as a supporter or contributor, or partisan affiliation.' A Republican now holds the top job at the Investment Company Institute."
Every enhancement of the federal government's regulatory power leaves private interests more vulnerable to that type of political blackmail. This helps explain the primacy of "K Street," the infamous Washington, D.C., Avenue where lobbyists for business and trade groups maintain their offices.
Following the Republican conquest of the House of Representatives in 1994, Congressman DeLay and a few associates inaugurated the "K Street Project," which Elizabeth Drew describes as "an effort to place more Republicans and get rid of Democrats" in the ranks of prominent lobbying groups. Explains Republican activist (and co-architect, with DeLay, of the "K Street Project") Grover Norquist: "We don't want nonideological people on K Street, we want conservative activist Republicans on K Street.... There should be as many Democrats working on K Street representing corporate America as there are Republicans working in organized labor--and that number is close to zero."
Rep. DeLay has admitted as much, as well. Newsweek's Jonathan Alter describes a 1995 conversation with Rep. DeLay (at the time the House majority whip) in which he discussed "a rumor about him that I figured could not possibly be true. The rumor was that after the GOP took control of the House that year, DeLay had begun keeping a little black book with the names of Washington lobbyists who wanted to come see him. If the lobbyists were not Republicans and contributors to his power base, they didn't get into 'the people's House.' DeLay not only confirmed the story, he showed me the book. His time was limited, DeLay explained with a genial smile. Why should he open his door to people who were not on the team?"
One problem with the perspective described by Norquist and DeLay is that true conservatives don't want power to accumulate in Washington. But more importantly, DeLay, like all other members of Congress, swore an oath to "support and defend the Constitution of the United States," rather than the interests of their respective political "teams."
More than any other Republican leader, Tom DeLay has worked to centralize power in Washington and keep it in Republican hands. While he has paid rhetorical tribute to conservative concerns--reduction in the size and expense of government, de fense of national sovereignty, protecting the sanctity of life--his actions attest to his true priorities, which are to exalt the Republican Party over all else.
Arguably the best illustration of those priorities was offered on September 13 by DeLay himself when he made the astonishing claim that during their 11 years in power the Republicans had "trimmed the fat" out of the federal budget. That claim came just weeks after the GOP-led House, acting in concert with the Bush White House, passed a grotesquely obese federal highway bill larded with hundreds of millions of dollars in bribes to pay off congressmen who had voted in favor of the so-called Central American Free Trade Agreement (CAFTA). From DeLay's perspective, taxpayer-subsidized bribes aren't "fat," since they are compatible with the prime directive: advance the interests of the Republican leadership at all costs.
Little tangible damage to anyone was done as a result of DeLay's alleged violations of Texas campaign laws. The same cannot be said, however, of the system of official plunder he has served so faithfully.
"Tom needs to be taken to task for his votes on CAFTA and unconstitutional spending bills, not for supposed violations of obscure campaign finance laws," a veteran of Texas Republican politics who has known the congressman for decades commented to THE NEW AMERICAN anonymously. "I've known Tom since before he entered the Texas legislature nearly 30 years ago. We were actually in business together for a while. I have no doubts about his personal integrity. His problems have more to do with philosophy than with matters of ethics."
"On a few occasions, I've been with Tom in a hotel bar following Republican Party events, and when I've offered to buy him a glass of wine, he's refused," continues the Texas GOP activist. "He's explained to me that he can't even discuss the matter because of campaign finance laws. So I'm inclined to believe him when he says that he never intended to violate either state or federal campaign laws. I do think, however, that where he may have been naive, or exercised poor judgment, is in the choice of some of the people he's associated with. He's not dishonorable, but people of that sort are kind of thick on the ground in Washington."
Where political power accumulates, corruption will thrive, despite any supposedly noble intentions of those who exercise that power. And this is true irrespective of which political "team" happens to be in control.…