Tom Delay Page - Delay Inc. Part One

DELAY INC. PART ONE

This article includes excerpts from "The Hammer," and appeared in salon.com in October 2004. Lou Dubose and Jan Reid expose how Tom DeLay turned campaign fundraising into a shadowy enterprise.

PART 1

Peter Cloeren was a virgin. At least when it came to politics. He had never participated in a political campaign. He had never written a check to a candidate for elected office. He lived in a beat-to-shit Texas Gulf Coast town abandoned first by the shipping industry and more recently by big oil.

He was CEO and majority owner of one of the remaining successful and growing businesses in Orange, Texas. Cloeren Inc. was built on the inventive genius of Peter Cloeren Sr. and expanded by Pete Cloeren's hard work and market savvy. The company, which does more than $40 million in annual sales, designs, manufactures, and markets extrusion dies, coextrusion dies and feedblocks. In the English we speak in Texas: tools that inject color into colorless plastic.

Until he was seduced by Tom DeLay -- a seduction that would cost him $37,000 in political contributions, $400,000 in fines, a two-year probated sentence, and a hundred hours in community service -- politics to Pete Cloeren meant showing up to vote for conservative candidates. After his brief involvement with Tom DeLay and an East Texas dentist he was trying to get elected to Congress, Cloeren was done with politics. If Brian Babin lost the 1996 race for the second congressional district in East Texas, Pete Cloeren lost a lot more. And DeLay walked away unscathed. Actually, he flew. Cloeren picked up the $1,320 tab for the executive jet service that made the 180-mile round-trip from Sugar Land to Orange less of a burden for the congressman.

Texas songwriter James McMurtry once said he writes about small towns because they're easier to figure out than big cities. The $37,000 contribution scheme that got Pete Cloeren crossways with the FBI used the same devices to hide and move tens of thousands of dollars that DeLay and his political PACs use to move millions. It was just done on a small-town scale. Babin needed to raise a lot of money to compete for an open seat in a district that was more Democratic than Republican. In order to circumvent federal campaign finance laws, which then limited individual contributions to $1,000 per candidate and placed restrictions on corporate contributions, he needed "vehicles." That is, fresh names to attach to money from donors willing to donate more than the $1,000 federal max. Or the cover provided by organizations that were not corporations and could legally contribute to campaigns for federal office. That's why he needed Cloeren, who had both the money and, as Babin and DeLay would explain to him, the "vehicles."

Cloeren's story (told in detail in a sworn affidavit) begins with one of his employees introducing him to Babin, a candidate in the Republican congressional primary. Cloeren was flattered. And impressed. Babin wanted his help and told him that businessmen like him were essential to expanding a conservative Republican majority in Congress. And Babin was the kind of candidate Cloeren could get excited about. A small businessman with Main Street values. A Christian. A candidate who promised less government regulation and lower taxes. A Republican running for a House seat that had been the private property of larger-than-life Democrat Charlie Wilson. When Babin asked him to help raise $50,000, Cloeren said that it was impossible to do in a rural county peopled by blue-collar Democrats. He offered to write Babin a check for $20,000 or $25,000 -- a clear sign he was utterly out of touch with federal campaign finance law. Babin advised him there was a $1,000 per-person limit and suggested Cloeren "work with loyal employees."

In other words, Cloeren should make contributions in his workers' names, or have them make the contributions and reimburse them. Before long, Cloeren was sending his employees home on their lunch breaks to pick up their checkbooks. And Babin was swinging by Cloeren's plant parking lot to pick up his checks. The same way Paulie Walnuts picks up the tributo payments that Jersey businessmen owe Tony Soprano. In a charmingly na‹ve line in his congressional affidavit, Cloeren says: "Since I had never raised funds for a political candidate before, I didn't know whether it was unusual for the candidate to pick up the checks in person." (He would later learn why Babin avoided the mail.) When Babin made the runoff, he was back again, asking Cloeren to find more employees through which company money could be funneled to the campaign. (Like the wisecracking boys at Tony Soprano's Bada Bing Club, Babin knew that once you get your hand into somebody's pocket, you gotta work to keep it there.) Babin's fundraising consultant even devised a scheme by which Cloeren Inc. employees would get bonuses from the boss -- precisely the amount they were contributing to the campaign. After Babin won the runoff, House Majority Whip Tom DeLay got behind his candidacy. And Babin, who had served as mayor of the tiny East Texas town of Woodville, began to show real growth as a candidate. For example, he called Cloeren to ask if he would pick up the tab to fly the congressman in for a fundraiser.

DeLay was the talent at Babin's campaign event at the Ramada Inn, where the congressman made his standard stump speech: conservative, family values, small government, running against a liberal professional politician. After the speech, DeLay invited Cloeren to a private lunch at the local country club. Cloeren later provided Congressman Henry Waxman's investigator on the House Committee on Government Reform a detailed account of the lunch:

"Congressman DeLay turned to me and told me that Mr. Babin's campaign needed more money because Mr. Babin was being out-spent by his Democratic opponent. "Congressman DeLay told me that the Democratic candidate was receiving a lot of money from liberal interest groups like labor unions and trial lawyers. I told Congressman DeLay that I could not help Mr. Babin raise more money because I had run out of vehicles. Congressman DeLay specifically told me that it would not be a problem for him to find, in his words, "additional vehicles," since he knew some organizations and campaigns which could serve as these vehicles.

Mr. DeLay turned to his aide, Mr. [Robert] Mills and stated that money could be funneled to the Babin campaign through both Triad [a corporation that ran two nonprofit foundations] and other congressional campaigns. Congressman DeLay then specifically told me that Mr. Mills would follow up with me on the details of how to funnel additional monies to Mr. Babin's campaign."

GO TO PART TWO

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