3-21-05, 9:23 am

Arnold's Corporate Sponsors

While Arnold Schwarzenegger as action hero fought the corruption and abuse of power of the big corporations in Total Recall, he is now on the other side. He is working for them.

Last week the Foundation for Taxpayer and Consumer Rights (FTCR) unveiled what they describe as the Century Plaza 'Cash Syndicate,' a group of corporate CEOs who have shelled out millions to back Arnold Schwarzenegger 's re-election bid. As of the middle of March this collection of business tycoons had given over $5 million to the admitted former steroids user. According to the Public Campaign Action Fund (PCAF), a non-partisan campaign finance reform watchdog group, DeLay's ethics violations range from abuse of power to illegal expenditures of campaign contributions, illegal use of federal funds for partisan purposes, and acceptance of gifts in exchange for policy making.

Notoriously corrupt and now bankrupt Enron paid for DeLay’s rise to power in the GOP. The energy company hosted the first fundraiser for DeLay's leadership PAC, raising $280,000.

In exchange, DeLay fought for energy de-regulation backed by the company and tax loopholes that would have given the company $254 million back from the federal treasury if it had not collapsed in 2001. Campaign contributions, a salary for his wife, and grants for voter 'research' were DeLay's reward from Enron.

Unlike most members of Congress, DeLay did not return his Enron campaign contributions after the company’s collapse; nor did he donate them to help assist its many devastated ex-employees and pensioners.

DeLay's support for energy de-regulation and airline de-regulation came after very large donations from corporations in the concerned industries.

Other abuses listed by PCAF include DeLay's strong-arm tactics in the House. In 2003, during the House's extremely close vote over the GOP's controversial Medicare prescription drug legislation, DeLay offered to endorse Rep. Nick Smith’s (R-MI) son in his bid for a congressional seat in exchange for his support for the bill. The incident was made public when Smith, who was about to retire, wrote a newspaper column charging that Republican leaders had offered him 'bribes' in the form of campaign help for his son.

Smith’s son did not receive much backing from the GOP’s financial machine in his bid for election in the 2004 primary and lost his father’s seat to Joe Schwarz (R-MI).

In October 2004, the House Committee on Standards of Official Conduct admonished DeLay, saying 'The promise of political support for a relative of a member goes beyond the boundaries of maintaining party discipline, and should not be used as the basis of a bargain for members to achieve their respective goals.'

In 1995 DeLay helped found the 'K Street Project' with the intention of controlling the money and political orientation of Washington's lobbying corps. Through the K Street Project, DeLay circulated lists of lobbyists along with information on their ties and contributions to Democrats. The purpose was to peddle influence and jobs to interests who leaned to the right, while squeezing out pro-Democratic or liberal-oriented lobby groups.

DeLay was eventually rebuked by the House Ethics Committee for using strong-arm tactics to show his disapproval of the Electronics Industries Alliance for hiring a former Democratic congressman to be the group’s president.

Of special interest to criminal investigators in 2004 was DeLay's role in funneling illegal campaign contributions through corporate accounts to finance GOP candidates. Peter Cloeren, a Texas businessman and loyal Republican donor, charged that DeLay orchestrated a campaign contribution conduit scheme in which money was funneled through a variety of candidates and organizations to support a Republican candidate from Texas.

Cloeren told a congressional investigator that DeLay told him about this scheme and showed him how to funnel cash through a corporation called Triad, which controlled non-profit foundations that held money for these purposes. Money was also illegally shuffled through other campaigns, Cloeren stated.

While DeLay earned only the ire of campaign finance reform activists and others interested in ethics, Cloeren was fined $400,000 and received a 2-year community service sentence for his role in DeLay's campaign scheme.

To defend himself from ethics charges, DeLay raised about $1 million. According to Public Citizen, DeLay used his legal defense fund to raise special interest money, creating the appearance that members and corporations curry favor with DeLay through giving to his legal defense.

Ironically, during a fundraiser for his legal defense, in August 2004, DeLay received a check from Corrections Corporation of America (CCA) CEO John Ferguson for his nonprofit group, DeLay Foundation for Kids. CCA is a for-profit prison company that lobbies for legislation to privatize prisons. At the time, CCA sought DeLay’s assistance with a bill in Texas that would put up to half that state’s prisons under private control. DeLay's foundation is mainly a fundraising organization that has little to do with kids.

Not surprisingly, DeLay is a staunch opponent of campaign finance reform.

This CCA bribe garnered DeLay a second quiet rebuke from the House Ethics Committee. On top of that, the Committee mildly chastised DeLay for using federal resources in a Texas election dispute for the benefit of his party.

To protect his star, GOP House Speaker Dennis Hastert ordered the removal of Rep. Joel Hoefley who chaired the Ethics Committee and replaced others who voted to rebuke DeLay with party loyalists.



--Joel Wendland is managing editor of Political Affairs and can be reached at jwendland@politicalaffairs.net.