DeLay’s new project

When it comes to Tom DeLay and children’s charities, the House Majority Leader doesn’t have a great history. It was just a year ago that DeLay created a fundraising scheme that offered wealthy GOP donors extravagant benefits under the auspices of helping abused and neglected children.

Now, DeLay has a new initiative — a foster-home project outside Houston.

House Majority Leader Tom DeLay on Monday opened a privately financed project touted as an innovative way of giving abused and neglected children a stable foster home environment.

“There is no other place in the entire country that does what we’re trying to do,” the Republican said of the project. “And we hope to take this as a model around the country because the foster care system in every state has problems that need to be dealt with.”

It’s tempting to worry about vulnerable children being exposed to Tom DeLay, but if this is a sincere effort to offer a stable home to kids who desperately need one, good for him.

But as is almost always the case with DeLay, there are reasons for suspicion.

The project also has drawn attention because the first phase includes homes constructed by Houston-based builder Perry Homes. The company is owned by Bob Perry, a Republican Party financial donor who gained notoriety last year as the chief financial backer of the Swift Boat Veterans for Truth, whose ads criticized the war record of John Kerry.

Joe Conason explained a few months ago that DeLay and Perry have been at this for a while and their intentions may not be entirely pure.

For the past 17 years the DeLays have also operated their own charitable outfit, the DeLay Foundation for Kids, which aims to raise $10 million to build the Oaks at Rio Bend, a special faith-based housing subdivision for a small number of foster families on 50 acres near Richmond, Texas. (Interestingly, the homes are to be constructed by Perry Homes, the company whose enormously wealthy founder, Bob Perry Jr., was the largest donor to the Swift Boat Veterans for Truth.) Evidently this activity allows DeLay to cut food stamps, children’s health insurance, federal housing and tax credits for the poor while remaining certain that he is a compassionate conservative, doing God’s work. According to DeLay, the intention of his charity’s “biblical” project is “to show that you don’t need a government program to take care of kids.”

What you need instead is a powerful politician with enough influence over government to shake down big donors.

Of all the profound and petty offenses charged against DeLay, his use of a children’s charity to aggrandize himself and raise money from lobbyists and corporations may be the most distasteful. The foundation has received comparatively less attention recently, perhaps because, as a registered charity, the details of its donors and operations are easily kept secret. This is a happy situation for DeLay, since his charitable and political operations continually blur into one another.

The foundation’s fundraisers have included his former deputy chief of staff and a consulting outfit that worked for his political action committees. A spinoff foundation, known as Celebrations for Children, employed his daughter Dani DeLay Ferro (who is also paid by his political action and campaign committees) and two more Republican operatives associated with the Hammer’s political machine. So far, most of the DeLay Foundation’s spending has gone toward fundraising and administration, although ground was broken for the Oaks in September 2003.

Many observers regard the DeLay Foundation as a substitute destination for outlawed “soft money” donations, since companies and lobbyists can give unlimited amounts. Indeed, it may be even better than his old soft-money scams — because the donors need not be identified publicly at all.

The details are not altogether clear, but the suspicion is that DeLay raises money through his charity, trades donation for political access, and remains unaccountable because donations to charities are private.

At this point, DeLay has not exactly earned the benefit of the doubt.

And, do any kids, anywhere, actually benefit?

  • Here’s the deal: Yes, some kids may get help from the program. It’s almost certainly not the most efficient use that one could get for the amount of money, but some kids get some help.

    But what the charity provides Tom with is a more legal way to shake people down in the course of fundraising–golf tourneys, private dinners with Tom, etc., all for sale. (He more or less admits the shakedown, but insists it’s all for the kids. You be the judge.)

  • Do we have any reasonable hope for a Dem defeating DeLay in 2006? Aside from sending money, can I burn some candles or incense or something to help make this happen?

  • Gads! I used to think using babies in photo ops is bad (or at a minimum tacky) this is disgusting.

  • I think it’s important to be very precise about what you’re criticizing here. There’s nothing wrong with using clout to raise money, and it’s even better to do it for a good cause. And even kissing babies isn’t really bad—the distaste is from the obvious or perceived lack of sincerity.

    What Tom DeLay is (probably) doing wrong here is using this as a scam to raise money for his political career and to funnel money to businessmen who act as 527 hatchet men for his issues. As far as that’s tasteless, well, so what, unless anyone cares about it. As far as it’s illegal, I’d like to see some action. While items like donor lists may be private for charities, fraud and political maneuvering is not, and in fact charities have to live up to higher standards to retain their status.

    Anyone have some insight on this from a legal perspective? Is a quid pro quo scenario exchanging investment of charitable resources (construction work) for political support (Swift Boat Ads, with more to come I’m sure) illegal? What is the standard of proof?

    If nothing else, this would make for entertaining legislation. A prominent Democrat proposes legislation that makes explicit the illegality of this type of relationship, couched in appropriately toxic terminology, to be shot down as an anti-DeLay measure (thus implicating his operation as just such a scam). “The anit-corruption in charities act� or some such?

  • “Anyone have some insight on this from a legal perspective? Is a quid pro quo scenario exchanging investment of charitable resources (construction work) for political support (Swift Boat Ads, with more to come I’m sure) illegal? What is the standard of proof?”

    Eadie,

    I’ll take a shot. I would assume that the “DeLay Foundation for Kids” is (A) organized and IRS-approved as a 501(c)(3) tax-exempt charity, and (B) approved by the Stae of Texas to make charitable solicitations under fairly universal rules regarding governance of charitable organizations (and trusts) and their publicly-solicited and collected funds. If so, then many special requirements must be met, both as to how the charity is put together (who can be officers and directors, “trust or fund accounting” must be used rather than GAAP, special reports must be filed, etc.) AND as to how it operates (how funds are solicited and by whom, limiting its activies to those permitted by federal and state law, etc.). These seemingly complex rules are, with the proper (legal, tax and accounting) advice AND the desire to follow them, easily satisfied.

    The most important issue that relates to your question is that the charity’s promoters, officers and directors/trustees are considered to be “fiduciaries.” That is a specific legal status, requiring those persons (which may be a corporation, such as a bank offering trust services) to act in the sole and best interests of the charity’s actual and intended beneficiaries. One must avoid both a conflict of interest AND even the appearance of one.

    In addition to and coupled with this concept of fiduciary duty is the fact that all charitable laws prohibit the use of a charity’s assets for the “private pecuniary benefit” of any person. A classic example is where the President of the charity “borrows” the charity’s funds at no or below-market interest. Another is where a charity’s office employees and equipment (e.g., fax, copier, telephone, secretarial services, postage meter, etc.) are used by the President for his unrelated for-profit business but without reimbursement back to the charity for the full value of what was delivered to the President.

    So, if there is a quid pro quo, where for example DeLay pays Perry for the costs of construction, and in return Perry makes political contributions to DeLay OR as DeLay directs, then there is a problem. Even if Perry gets paid market rates, they both have a problem because of the “but for” principle. “But for” the fact that there was a quid pro quo arrangement, the charity would not have made the contract with Perry, and Perry would not have made the political contributions. DeLay does privately benefit from the use of the charity’s assets, and likely Perry would be in violation of similar “exclusive use” rules.

    If the IRS, the state, or a class of beneficiaries seek a refund of the money misappropriated by DeLay and Perry, the standard of proof is the same as in most other civil cases: a mere preponderance of the evidence (i.e., a smidge more proof on one side of the scale than on the other). If, on the other hand, the IRS or a prosecuting attorney (say, Ronnnie Earle, who conveniently just happens to already have a huge file on DeLay’s shenanigans) goes after DeLay and Perry on criminal charges, then the standard of proof would be the well-known “beyond a reasonable doubt” standard. Most evidence is going to be the documents that can be uncovered (contracts, correspondence, email, file notes, tec.), but also the direct testimony of underlings and co-conspirators.

    Neither a civil nor a criminal case would be easy — corruption charges never are — but they can be won IF the violations are egregious enough (either in amount or in public revulsion) AND the plaintiffs and/or prosecutors are motivated enough. DeLay and Perry would meet both aspects of this “recipe” for a successful action against them!

    Hope this helps…

  • Here is the Fort Bend County tax record for the Oaks at Rio bend:

    http://www.fbcad.org/Appraisal/PublicAccess/PropertyDetail.aspx?PropertyID=284974&dbKeyAuth=Appraisal&TaxYear=2005&NodeID=11&PropertyOwnerID=512103

    The appraised value, including the improvements, is $842,210. The homes were built at cost by Perry Homes. I wonder how the rest of the money is being spent?

    Also, this a horrible design for a community. It’s basically a little slice of typical suburb with the focus on the automobile. It shouldn’t be a surprise to anyone that there were no architects involved in the design.

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