Published: November 6, 2010

http://www.nytimes.com/2010/11/07/us/politics/07delay.html?_r=1&pagewanted=2

AUSTIN, Tex. — On the day after Republicans trounced Democrats in the midterm elections, Tom DeLay strolled around a courtroom here with an American flag lapel pin, looking carefree and chatting with strangers at his money-laundering trial with the habitual charm of a seasoned politician.

“I’m doing great; it’s a great day,” said Mr. DeLay, the former House majority leader, gripping the hand of a spectator as if he wanted her vote.

An hour later, during a break in testimony, Mr. DeLay faced a brace of cameras and crowed over the heavy Republican victory in Texas, where he almost single-handedly redrew the districts in 2003 to get more of his party members elected. Then he acknowledged, a bit wistfully, that the charges he faces in state court had, in effect, ended his career. He has no ambition to run for office again, he said.

“I would have liked to have been there, to have been a leader in this election,” said Mr. DeLay, who used to be called The Hammer because of his no-holds-barred electioneering style. “I have been found guilty of nothing. Now I’m standing trial on a political vendetta brought by a rogue D.A.”

This is a trial about American politics, about the way modern campaigns are financed, the way money fuels victories, the way the donations flow toward power.

It is also a window on the bare-knuckle partisan politics of Texas, where a district attorney’s office controlled by Democrats has managed to derail the political career of the Republican politician most responsible for ousting several powerful Democrats from Congress.

What remains unclear is whether Mr. DeLay actually committed a crime under state law. That will be up to a jury of six men and six women, unless the defense can persuade Judge Pat Priest to dismiss the charges after the prosecution rests its case.

Mr. DeLay resigned in 2005, after two decades in Congress, the day he was indicted here in Travis County, a Democratic bastion. At the time, Mr. DeLay was also under investigation by the Justice Department for his ties to the disgraced lobbyist Jack Abramoff, but that inquiry ended this year without any charges against him.

Many of the facts are not in dispute. In 2002, Mr. DeLay formed a state political action committee, Texans for a Republican Majority, with the goal of winning a majority in the Texas House and electing its first Republican speaker since Reconstruction.

The committee quickly raised nearly $200,000 from corporate lobbyists, many of them in Washington. Corporate donations cannot be legally given to Texas candidates, so the Texas committee sent the money to the Republican National Committee, which in turn sent the money from a separate, noncorporate account to seven Republican candidates in Texas.

Six of those candidates won. The Republicans took the Texas House, and the next year forced through a Congressional redistricting plan that led to the defeat of several senior Democrats.

Mr. DeLay had orchestrated the redrawing of the lines. The fight had so incensed Democratic legislators that they left the state en masse in a failed effort to prevent a vote on the new map.

Terry Nelson, who was the director of political operations for the Republican National Committee in 2002, testified Thursday that one of Mr. DeLay’s political associates, James Ellis, had asked him to do the money swap. He said the national committee often performed the same maneuver for state party committees, but not for political action committees. He said Mr. Ellis had told him the request came from Mr. DeLay himself.

“Tom DeLay wanted us to do that,” Mr. Nelson testified, according to The Austin American-Statesman. It was the first time in a week of testimony that a witness directly linked Mr. DeLay to the transaction.

But Mr. DeLay’s lawyers have argued that the transaction, while admittedly an end run around the state ban, did not break the state money-laundering law. The corporate money, they point out, remained in a separate account, and the noncorporate account had more than enough in contributions from individuals to cover the money sent to the Texas candidates. “It’s different money,” the lead defense attorney, Dick DeGuerin, has argued at several points.

Prosecutors argue that this distinction makes no difference if they can prove that Mr. DeLay and his two political associates, Mr. Ellis and John Colyandro, conspired to circumvent the state ban on corporate money in elections

Mr. Ellis led Mr. DeLay’s federal political action committee, Americans for a Republican Majority, while Mr. Colyandro was the director of the state political action committee. Both face lesser charges and will be tried later.

The state law defines money laundering as taking proceeds from a criminal activity and, through some financial transaction, putting them to a different purpose. The prosecutors argue that a conspiracy to use the corporate donations in state races amounts to an illegal activity, so the money can be considered ill-gotten.

“They were acting with the intent to put corporate money into Texas legislative campaigns,” the lead prosecutor, Gary Cobb, said in an interview. “If you have an agreement to do that, it is a conspiracy.”

Nonsense, say Mr. DeLay and his legal team. “They are stretching the law beyond all recognition,” said Matt Hennessy, one of Mr. DeLay’s lawyers.

Outside the presence of the jury, Judge Priest has made it clear that he agrees that the existence of separate accounts means little if the people involved in the transaction had a criminal intent. “Money is absolutely fungible,” he said. “It’s like beans.”

The testimony has offered a rare glimpse into the world of campaign finance. Lobbyists testified that they were asked to give to Mr. DeLay’s committees according to a tiered plan — gold, silver and platinum memberships — and that the more money they gave, the more access to him they received.

Lori Ziebart, a lobbyist for El Paso Energy, described going on junkets to golf resorts in Puerto Rico and Virginia to meet with Mr. DeLay, a privilege for which the company made $50,000 donations each to his federal and state committees.

Mr. DeLay’s daughter, Danielle DeLay Garcia, spent the better part of Tuesday on the stand, exchanging looks with her father as she answered questions from the prosecutors in a cheerful voice.

She explained her interlocking and overlapping jobs in 2002 as her father’s campaign manager and as an event planner for both his state and federal political action committees. But she maintained that he had little to do with the day-to-day running of the state committee. “He was too busy,” she said. “It wasn’t his thing. It wasn’t his PAC.”

In 2002, Mrs. Garcia earned $84,500 from the committees for planning events and about $60,000 for running her father’s campaign, which she said was a relatively small salary for a campaign manager.

“I know I was underpaid,” she said on the stand, smiling and looking directly at her father. Mr. DeLay began to giggle. “He’s laughing,” said Mrs. Garcia, who is now a sixth-grade science teacher.

The testimony also shed light on the trouble that Mr. DeLay’s state political action committee had in raising money from individuals in Texas as the 2002 campaign season wore on.

Warren Robold, a Washington-based fund-raiser who solicited most of the corporate donations to the state political action committee, testified that he received several urgent e-mails from Mr. Colyandro, its director, in August and September. “Any news?” Mr. Colyandro wrote on Sept. 16 in an e-mail introduced into evidence. “I need dollars desperately. Sorry to sound so needy.”

Around the same time, on Sept. 13, Mr. Colyandro signed the check for $190,000 that was sent to the Republican National Committee, according to the indictment.

None of this testimony has dampened Mr. DeLay’s outward optimism. During breaks in testimony, he has described the charges as trumped up and politically motivated. He juts out his jaw and says he will prevail.

“I have withstood 15 years of the Democrats’ frivolous attacks,” he said.