US: Former DeLay aide enriched by nonprofit

A top adviser to former House Whip Tom DeLay received more than a third of all the money collected by the U.S. Family Network, a nonprofit organization the adviser created to promote a pro-family political agenda in Congress, according to the group's accounting records.

DeLay's former chief of staff, Edwin A. Buckham, who helped create the group while still in DeLay's employ, and his wife, Wendy, were the principal beneficiaries of the group's $3.02 million in revenue, collecting payments totaling $1,022,729 during a five-year period ending in 2001, public and private records show.

The group's revenue was mostly drawn from clients of Republican lobbyist Jack Abramoff, according to its records. From an FBI subpoena for the records, it can be inferred that the bureau is exploring whether there were links between the payments and favorable legislative treatment of Abramoff's clients by DeLay's office.

In recent months, Abramoff pleaded guilty to charges of tax fraud and conspiracy to defraud clients and bribe a public official; DeLay (R-Tex.) stepped down from his post as House majority leader; and Buckham folded his lobbying firm, the Alexander Strategy Group.

Group a political machine
In the late 1990s, when DeLay's influence was growing, the lawmaker depicted the USFN in a promotional letter as a nationwide, grass-roots organization. In fact, it had a tiny staff that barely registered an impact on Capitol Hill. The group appears to have served mostly as a vehicle for funneling corporate funds to DeLay's advisers and financing ads that attacked Democrats.

The group's payments to the Buckhams -- in the form of a monthly retainer as well as commissions on donations by Abramoff's clients -- overlapped briefly with Edwin Buckham's service as chief of staff to DeLay and continued during his subsequent role as DeLay's chief political adviser.

During this latter period, Buckham and his wife, Wendy, acting through their consulting firm, made monthly payments averaging $3,200-$3,400 apiece to DeLay's wife, Christine, for three of the years in which he collected money from the USFN and some other clients.

Even though Buckham left DeLay's staff at the end of 1997, he still coordinated much of the congressional office's work and ran DeLay's principal fundraising committee from a building bought with USFN money, according to three former DeLay staff members who said they had firsthand knowledge of his role then.

Minister's influence disputed
"If an individual called DeLay's appointments secretary saying they wanted to talk to DeLay about overregulation, the appointment secretary would say go speak to Buckham," one former aide said. Buckham, an evangelical minister, also continued to serve as DeLay's spiritual adviser and prayed frequently with him, the former aides said.

DeLay's lawyer, Richard Cullen, disputed the accounts of Buckham's influence. He said Buckham made appointment requests but was not involved in final decisions on scheduling after he left the office. He also said Buckham did not coordinate the office's activities, saying that was done by successors.

Abramoff, for his part, once boasted that he had invested a million dollars in Buckham, according to a former Abramoff colleague who said he witnessed the conversation. Abramoff expressed confidence that the funds would bring a good return for his clients, the colleague said. Abramoff, through a spokesman, declined comment on this claim or other details of this article.

Wendy Buckham was not the only spouse of a DeLay staffer to benefit from the USFN revenue stream sustained by Abramoff's clients. A consulting firm owned by the wife of Tony C. Rudy, DeLay's deputy chief of staff, was paid $15,600 by the group in 1999 and another $10,400 in 2000. Rudy resigned to work with Abramoff in 2001. It could not be determined what the payments were for.

A friend on the Hill
DeLay supported the interests of many USFN donors on Capitol Hill, including an Indian tribe seeking to keep a tax exemption for gambling revenue and wealthy Russians seeking a favorable vote on Russian aid legislation. DeLay's spokesman has said his opinions and votes were based solely on "good policy" and national interests.

Edwin and Wendy Buckham and their lawyer, Laura A. Miller, did not respond to multiple requests for comment on USFN spending or the money they received. The Rudys did not return calls to their home and Tony Rudy's cellphone.

The accounting records reviewed by The Washington Post included a list of every transaction by the USFN from 1996 to 2000 and the group's tax returns for 2001, the last year it existed. They demonstrate that the consulting fees, bonuses and fundraising commissions for the Buckhams -- plus the purchase of a townhouse that served as the locus of DeLay's own fundraising efforts -- consumed far more of the group's budget than its spending for lobbying on "moral fitness" issues.

A previous article in The Post detailed how USFN had drawn its largest checks from Abramoff's clients, including $1 million from what several former Buckham associates described as Russian oil and gas executives and hundreds of thousands of dollars from an Indian tribe.

Records obtained by federal investigators after that article appeared and reviewed by The Post make clear just how unusual USFN's spending was. Its revenue was lavished not only on DeLay's advisers but on a variety of expenses that experts say are atypical for such a small nonprofit: $62,375 for wall art, a vase listed at $20,100, airfare and meals for Abramoff that cost $11,548, and $267,202 in travel and entertainment expenses that appear to have mostly benefited Buckham, the group's board members, and its tiny staff.

"They were using donor funds for interior decorating," said Chris Geeslin, a pastor in Frederick, Md., who between 1998 and 2001 served as one of the group's directors and then its president. He blamed what he described as the group's misspending on Buckham, who he said "would tell us where you should put things. He orchestrated all this. . . . He used us."

Handpicked board
When the USFN was incorporated at Buckham's instigation in 1996, it described its purpose as promoting policies favorable for "families, the economic prosperity, social improvement, moral fitness, and general well being of the United States."

From the outset, it was organized differently from other public advocacy groups located in the capital that hoped to influence the nation's leaders. For example, Buckham selected as its board members three evangelical Christians from the tiny town of Republic, Wash. (pop. 954), who associates say he had met at a religious retreat.

According to the minutes from its March 1997 board meeting, the group considered appointing "J. Abramoff" to the board, but never did. The group's first donation, a $15,000 check, came from the Mississippi Band of Choctaw Indians, one of Abramoff's highest-paying clients, and the next two donor checks came from other groups linked with Abramoff.

Formally, Buckham was a consultant to the board, but he said in an October 2003 deposition taken by Federal Election Commission lawyers and obtained by The Post that he had a verbal understanding allowing him to take whatever actions he deemed "in the best interest of the USFN pertaining to issues that they cared about." This included authorizing payments to others.

Questionable practices
But some routine procedures were not followed: USFN officials did not register as lobbyists until 2000, when the group became the target of a complaint at the FEC, and they sent in retroactive registrations for the three previous years.

The Buckhams closely controlled the group's finances. Wendy Buckham formally served as the group's treasurer and secretary for only five months in 1996 and 1997, but kept the books and signed its checks until it folded until 2001, according to its tax forms and former officers. Edwin Buckham said in the 2003 deposition it was he who suggested she take this role.

USFN nevertheless paid both an accounting firm and Wendy Buckham for accounting in 1997. She also collected $43,000 in "commissions" that year on the first $524,975 in contributions to the group from business entities that worked with Abramoff, according to its ledger. Congressional ethics rules do not bar such payments to spouses unless they are meant to purchase favors from lawmakers or staff.

Alexander Strategy Group began collecting its monthly stipend of $10,000-$12,000 from USFN in October 1997 to perform fundraising and other services, even while Buckham was still receiving a salary from the whip's office, according to House payroll records. House rules allow such overlap only if the outside income is limited and not a reward for official acts.

Within four weeks after Buckham resigned from DeLay's staff in December 1997, Alexander Strategy Group began also collecting commissions on donations to USFN from firms that worked with Abramoff. The largest were two $75,000 payments in 1998 and one for $104,500 in 1999. The total reached $364,500 before they stopped at the end of 1999. USFN's ledger also lists an unexplained "bonus" payment of $60,000 in December 1998.

The Internal Revenue Service generally requires that board members of nonprofits approve all payments to related entities. But several documents labeled as contracts with Buckham's firm in the group's papers are not signed, and Geeslin said in an interview that some of the minutes for board meetings in 1998 and 1999 were formally written after the FEC began its investigation.

Cozy seating, careful editing
Besides spending lavishly during its meetings at various resorts, the group also spent $149,000 in July 1998 to lease a skybox at MCI Center "at the request of one of the donors to USFN," the group's internal audit states. Geeslin said that person was actually Abramoff, who expressed his gratitude while sitting near him at a sporting event.

In the version of the group's official, typewritten ledgers, supplied to the FBI last month under subpoena, several of its most unusual expenditures are partially crossed out and relabeled in ink. The $20,100 purchase of a vase in October 1999 from a Royal Doulton dealer in Miami was relabeled "office equipment," and the $62,375 purchase in January 1999 of a collection of Salvador Dali and Peter Max prints was relabeled "office fixtures."

Asked about the handwritten changes, the group's former lawyer, J. Thomas Smith, said he did not recall seeing them and declined further comment.

Art Taylor, head of the Better Business Bureau's Wise Giving Alliance, a watchdog group, noted after reviewing the nonprofit group's tax returns for 1998 and 1999 that a tax inspector might wonder if "they have enough activity going on" of public benefit to justify their tax exemption. "If they were a charity," he said, "they don't meet our standards."

Labor in the Marianas
One of the first policy issues to be discussed by the group's board, according to its March 1997 minutes, was a "free-market research project" in the Northern Marianas Islands, a U.S. protectorate in the Pacific Ocean.

At the time, Abramoff was under contract with the Marianas government to lobby against congressional legislation to impede the free flow of immigrant labor to the islands from China and elsewhere in Asia, and impose a minimum hourly wage exceeding the island's standard rate of $3.05.

To U.S. immigration officials and other critics, maintaining the Marianas' exemptions from these rules amounted to providing legal protection for sweatshops. But textile manufacturers, who dominated the islands' politics and profited heavily from paying immigrant workers less than required on the mainland, ardently opposed the legislation. The Marianas government paid Abramoff a total of $7.17 million in lobbying fees from 1996 to 2001, according to an audit there.

Abramoff focused on DeLay's office in his lobbying effort, billing the Marianas for 187 contacts in 1996 and 1997, including 104 conversations with Buckham and 16 direct meetings with DeLay, according to Abramoff's billing records. Buckham affirmed in a 1995 interview with the National Journal that Abramoff "is someone on our side. . . . He has access to DeLay."

So it was perhaps understandable that in the spring of 1997, USFN's board was eager to demonstrate that the economic policies that were good for the Marianas (pop. 53,552) could be good for America. To do so, it dispatched its first director, a former manager of DeLay's 1996 Texas reelection campaign named Robert G. Mills.

During the trip, Mills -- accompanied by Buckham, who was still on DeLay's staff -- met with Willie Tan, the islands' largest private employer. Tan's textile companies had settled a lawsuit filed five years earlier by the U.S. Labor Department charging workplace abuses, and he had long cultivated contacts in Washington to stop the immigration and wage legislation.

In April 1997, for example, a longtime Tan aide and island politician named Benigno Fitial went to Washington, where he sang "Happy Birthday" to DeLay in the whip's office. He sent Buckham an e-mail after the trip expressing appreciation for his support and recalling Buckham's explanation that one of his roles was to "stop legislation from getting on the floor of the House." Fitial signed the e-mail, "YOUR 'ADOPTED' BROTHER BEN."

Three months earlier, Tan's network of companies had written five checks of $10,000 each to USFN, and Buckham's wife had claimed $10,000 in "commissions" on these checks, according to the group's ledger.

These were just the first of 23 payments by Tan's companies to the group, which eventually totaled $650,000.

Later in 1997, Wendy Buckham claimed another $10,000 in commissions on Tan's checks, and in 1998, the couple's jointly owned consulting firm took another $20,000 in commissions explicitly attributed to the Tan donations, according to the ledger. Many other "commissions" collected by the couple were not linked in the ledgers to a specific donor.

A pledge to 'resist evil'
DeLay saw Tan when he took his wife and daughter to the Marianas in a December 1997 trip arranged with the help of Abramoff and his lobby firm. After brunching with Tan on his first full day, followed by a round of golf with Tan and others, DeLay attended a dinner in his honor sponsored by Tan's holding company at the local Pacific Islands Club.

It was at this dinner where DeLay gave the speech in which he called Abramoff "one of my closest and dearest friends," according to a copy. DeLay also reminded Tan and his colleagues of his earlier promise that no wage and immigration legislation would be passed.

"Stand firm," DeLay said in his closing. "Resist evil. Remember that all truth and blessings emanate from our Creator." He then departed with Tan to see a cockfight, according to a written account by one of the trip participants.

In response to a reporter's question, Tan said in an e-mail Friday that "We hired [a] reputable firm, and we never ask[ed] the firm to do anything wrong." He said he was unaware of the commissions collected personally by the Buckhams.

No Marianas immigration or wage reform legislation passed the Congress. Aides to Rep. George Miller (D-Calif.), a key sponsor, say that Senate-passed legislation was never taken up by any House committee.

Funding attack ads
Before the U.S. Family Network folded in 2001 under pressure from an FEC probe, it became involved in other controversial political matters.

In 1998, the group lobbied Congress against new regulations on cigarettes and collected a $100,000 donation from the R.J. Reynolds Tobacco Co. It also spent $75,863 that year on radio ads that called for President Clinton's resignation and attacked Democrats, according to the group's ledger and transcripts of the ads.

The following year, the National Republican Congressional Committee gave the USFN a $500,000 check to finance additional radio ads in the districts of vulnerable Democrats. Buckham told the FEC he solicited the check, and others told FEC investigators it was paid over the objections of the NRCC's director and chief counsel.

Of the $500,000, USFN gave just $300,000 to another nonprofit group for the ads. In his deposition, Buckham explained that he retained a portion of the Republican Party's check as a commission. "If I raise money, I get a portion," Buckham said. "It is in my contract."

The NRCC in 2004 paid the eighth-highest fine in FEC history to settle allegations that some of its officials colluded with USFN on the ads in violation of campaign finance laws.

As the group started to wind down, it made five payments totaling nearly $200,000 to entities affiliated with its staff or board members or located at USFN's address, according to the ledger. It sold the townhouse at a $19,000 loss.

Favor for a 'gentleman'
The board also agreed at its final meeting in January 2001 to pay $150,000 to the Dorothy Joan Morris Foundation. The minutes state this was done at the request of "the gentleman who donated the largest amount of money to USFN" -- a term that Geeslin said is a euphemism for Buckham's fundraising.

Incorporation papers on file with the Maryland Secretary of State list the foundation's location as an insurance company office in a strip mall in Frederick.

The papers state the foundation is in turn owned by another group, Foundation Ministries Inc., which has its legal address at the Frederick home of the Buckhams.

Dorothy Joan Morris is the name of the 79-year-old mother of a former Buckham assistant named Roger Albanese, who is described in USFN documents as collecting roughly $20,000 from the group for "program services related to prayer." She says she never authorized the use of her name for the foundation, was never told about the $150,000 donation and never saw any of the proceeds.

"What rights does he [Buckham] have to put that in my name?" asked Morris, who said she lives with her husband in a trailer home parked in Las Vegas. "It's fishy."

• 106 Money & Politics