From the archives

by Jim Larson
used by Permission

Editors note: This story first appeared in the Billings Outpost in 2005. 

In a letter to Congress, the Texas Democrats have accused former Montana Gov. Marc Racicot of illegal fund-raising, money laundering and endangering a Houston neighborhood.

No proof accompanied their accusations.

Party Chairman Charles Soechting sent the letter to the House Ethics Committee in July. He accused Mr. Racicot of putting together the alleged money-laundering scheme that has embroiled Speaker of the House Tom Delay’s Texans for a Republican Majority in scandal. The letter also accused Mr. Racicot of raising illegal corporate money for TRMPAC and of using his influence to obtain a right of way for a train that would carry toxic chemicals through Mr. Delay’s district.

At the time the committee was investigating Mr. Delay for possible ethics violations.

In September, a Travis County Texas grand jury investigation into alleged campaign finance violations produced criminal indictments of three TRMPAC officials and eight corporations. One of those indicted was Jim Ellis, TRMPAC founder and Tom Delay staff member.

Mr. Ellis was accused of delivering illegal corporate contributions in the form of a TRMPAC check for $190,000 to the Republican National State Elections Committee, the nonfederal arm of the Republican National Committee. The indictment said that a list of candidates for the Texas House of Representatives accompanied the check.

The note suggested that the RNSEC make donations to those candidates, and amounts were recommended as well. A century-old Texas law forbids the use of corporate funds in political campaigns except for strictly administrative purposes.

The money and list went to the RNSEC in September. In October, checks totaling $190,000 were sent to the candidates on the list, the indictment said. Letters from Mr. Racicot, who was then chairman of the RNC, accompanied those checks, according to Kelly Fero, a Texas Democratic strategist. The RNC and TRMPAC told national news outlets that the identical sums were a coincidence.

Asked by Mr. Racicot to comment on his behalf for this story, RNC counselor Tom Josefiak confirmed that Mr. Racicot would have signed the letters.

All letters accompanying checks to candidates would have been signed by Chairman Racicot if he was “around at the time,” according to the prominent GOP lawyer. “Bringing the governor into this was absurd.”

He added that the RNC was careful to follow federal and state campaign laws, and he noted that Mr. Racicot was particularly conscientious about the handling of campaign funds. Referring to the Texas Democrats’ charge that Mr. Racicot planned the alleged TRMPAC money-laundering scheme, Mr. Josefiak said, “He wouldn’t stand for it.”

Accusing Mr. Racicot of campaign finance violations in a letter to the House Ethics Committee was absurd as well, Mr. Josefiak said. The committee had no jurisdiction over such matters, and the Texas Democrats knew it. The letter was simply a political ploy designed to take the public’s focus off the Republican agenda. Mr. Racicot’s integrity was above reproach, and it was an honor to work with him, the counselor said.

Mr. Josefiak served as general counsel for the 2004 Bush-Cheney campaign. Mr. Racicot served as its chairman.

Mr. Josefiak did note that it was unusual for groups and political action committees to give to the RNC, but said that great care would have been taken to put the money into the appropriate accounts. All restrictions imposed by state law would have been honored, he said.

Yet in his letter to the House Ethics Committee, Mr. Soechting wrote that Mr. Racicot attended a meeting on Oct. 3, 2002, where the circumvention of Texas law was a topic.

“Mr. Racicot presided over an RNC finance meeting in Fayetteville, Arkansas, where the $190,000 money-laundering scheme was discussed,” he wrote.

While Mr. Soechting’s letter offered no proof to back his assertions, strategist Fero sent the Outpost a copy of Mr. Racicot’s travel schedule for a fund-raising trip the RNC chairman made Oct. 2-4. The itinerary showed “RNC Finance meetings in Fayetteville” scheduled for the morning of Oct. 3, but no mention was made of the content of those meetings.

The itinerary was one of what Mr. Fero called a “treasure trove” of documents that became available when a civil action was filed in Austin against TRMPAC treasurer Bill Ceverha. According to Mr. Fero, the substance of the Fayetteville meeting referred to by Mr. Soechting was described in a deposition taken from a person who attended the meeting. That document was a product of the civil suit as well, said Mr. Fero. The Outpost has not yet obtained a copy of the deposition.

After the Fayetteville meetings, Mr. Racicot traveled to Houston. That evening he attended a fund-raising dinner that the itinerary described as “Dinner FR for Tom Delay’s PAC.”

According to RNC counsel Josefiak, the chairman did not attend any PAC fund-raisers, but only events for individual local candidates. Mr. Josefiak said he was familiar with the itinerary and said that Mr. Racicot had not put it out.

Mr. Racicot’s contact person for the Houston leg of his trip, however, was Susan Lilly, who, according to her website, was a fund-raising consultant for TRMPAC.

Mr. Fero called Ms. Lilly TRMPAC’s chief fund-raiser. When asked to comment on the Democrats’ accusations and TRMPAC’s motive for sending $190,000 to the RNC, she wrote that she was unable to reply because she “had nothing to do with how the money was spent or where it went once it was received.”

Some of the money was spent to pay Ms. Lilly. She received $28,500 to raise funds for TRMPAC, and every penny was corporate money, the Texas Observer said. While vague on many aspects of campaign finance, Texas law clearly forbids the use of corporate cash for political fund-raising.

And no tale of the West would be complete without the mention of a railroad.

In his letter to Congress, Mr. Soechting wrote, “It is especially disturbing that Mr. Racicot is currently helping a company on whose board he serves to push a toxic railway line through the heart of Rep. Delay’s congressional district.”

Mr. Soechting’s accusation was strong and clear but based on a loose collection of circumstances. The Burlington Northern Santa Fe wanted to build a controversial railway through the Clear Lake area in Mr. Delay’s district, the Houston Chronicle reported. Mr. Racicot has been on the railway’s board of directors since 2001, the BNSF website said.

In addition, Mr. Soechting reported that BNSF donated $26,000 in 2001 and $25,000 in 2003 to TRMPAC. Finally, Mr. Delay remained neutral on the railway, while most of the Texas delegation opposed the line.

Those circumstances, combined with Mr. Racicot’s proximity to the TRMPAC investigation, raised questions, but yielded no solid conclusions.