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Thursday, September 29, 2005 FULL SHOW | HEADLINES | NEXT: SEC Opens Formal Investigation of Senate Majority Leader...
2005-09-29

DeLay Hammered by Campaign Finance Indictment, Steps Down as House Majority Leader

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A Texas grand jury on Wednesday indicted House Majority leader Tom DeLay (R–Texas) and two political associates, charging them with a conspiracy to violate Texas campaign finance laws. House Republicans gathered within hours of the indictment becoming public and chose Rep. Roy Blunt (R–MO) to replace DeLay as majority leader who was forced to step down because of House rules. We speak with the executive editor of The Texas Observer and independent journalist Doug Ireland. [includes rush transcript]

A Texas grand jury on Wednesday indicted House Majority leader Tom DeLay and two political associates on charges of conspiracy in a campaign finance scheme. DeLay is temporarily stepping down from his post as House majority leader–the Number Two ranking Republican in the US House of Representatives.

GOP House rules require DeLay to give up his leadership position because of the indictment, but he is allowed to retain his Congressional seat.

Delay has denied the charges and accused the prosecutor who lodged them–Ronnie Earle–of conducting a political witch-hunt against him.

  • Rep. Tom DeLay (R–Texas)

Longtime Travis County District Attorney Ronnie Earle is a Democrat with a long history of going after politicians on both sides of the aisle. He defended the accusations of partisanship made by DeLay and recounted his past record of prosecutions.

  • Ronnie Earle, Travis County District Attorney.

Tom DeLay could face up to two years in prison if convicted on the charge handed up by the Travis County grand jury in Austin. He is the first House leader to be indicted in office in at least a century–this according to the Associated Press. Republicans quickly rallied behind DeLay and announced their support for his return as House majority leader. House Speaker Dennis Hastert emerged from a meeting with House GOP leaders late Wednesday afternoon and announced that Rep. Roy Blunt of Missouri–the current majority whip–will temporarily replace DeLay. Congressmembers David Dreier of California–the chairman of the Rules Committee–and Eric Cantor of Virginia–the deputy whip–will assist Blunt with some of the majority leader duties.

  • Rep. Dennis Hastert (R–Illinois), Speaker of the House

Republican Congressmember Roy Blunt of Missouri and House Speaker Dennis Hastert at a news conference Wednesday.

Tom DeLay was indicted on a single conspiracy charge tied to illegal fund-raising activities in Texas. The indictment accuses DeLay and two alleged co-conspirators–John Colyandro and Jim Ellis–of engaging in a scheme to launder $190,000 in corporate donations through the Republican National Committee for distribution to Republican candidates for the Texas Legislature.

The money was funneled to the RNC from Texans for a Republican Majority political action committee–or TRMPAC–which was created by DeLay and associates for the 2002 state elections.

Texas law generally prohibits corporate money from being used for campaign activities.

TRMPAC’s money and expertise helped Republicans win control of the Texas Legislature for the first time since Reconstruction. At DeLay’s urging, the Legislature then conducted a controversial remapping of congressional districts that resulted in more Republicans from Texas being elected to the U.S. House.

TRMPAC itself was indicted on Sept. 8 for accepting illegal corporate funds. Eight corporations and an industry lobbying group have also been indicted during the 34-month probe.

At the White House, the president’s chief spokesman, Scott McClellan, expressed support for Delay.

  • Scott McClellan, White House spokesperson.

DeLay is an 11-term congressman from the Houston area. He was elected majority whip in 1994 and became House majority leader in 2002. His reputation as a tough party enforcer have earned him the nickname, "The Hammer."

With DeLay under fire for three admonishments by the House ethics committee on separate issues, and amid concerns about the grand jury investigation in Texas, House Republicans changed a rule in November 2004 so that DeLay could keep his leadership post in the event he were indicted. But they were forced to reverse the move two months later following a public outcry.

  • Jake Bernstein, Executive Editor of The Texas Observer.
  • Doug Ireland, a longtime radical political journalist and media critic. He has been a columnist for The Nation magazine, Village Voice, the New York Observer and the Paris daily Liberation. He is also a contributing editor of POZ, the monthly for the HIV-positive community and writes a blog, "Direland"

Transcript

This is a rush transcript. Copy may not be in its final form.

JUAN GONZALEZ: DeLay has denied the charges and accused the prosecutor who lodged them, Ronnie Earle, of conducting a political witch hunt against him.

REP. TOM DELAY: In an act of blatant political partisanship, a rogue district attorney in Travis County, Texas, named Ronnie Earle, charged me with one count of criminal conspiracy, a reckless charge, wholly unsupported by the facts. This is one of the weakest, most baseless indictments in American history. It’s a sham, and Mr. Earle knows it. It’s a charge that cannot hold up even under the most glancing scrutiny. This act is the product of a coordinated premeditated campaign of political retribution. The all too predictable result of a vengeful investigation led by a partisan fanatic.

AMY GOODMAN: Long-time Travis County District Attorney, Ronnie Earle, is a Democrat with a long history of going after politicians on both sides of the aisle. He defended the accusations of partisanship made by DeLay and recounted his past record of prosecutions.

RONNIE EARLE: At last count, that total stood at 15, 12 of whom were Democrats and three of whom were Republicans. Our job is to prosecute abuses of power, and our job is to bring those abuses to the attention of the public through juries. And that’s what we do, when we find a violation of the law.

AMY GOODMAN: Tom DeLay could face up to two years in prison if convicted on the charge handed up by the Travis County grand jury in Austin. He is the first House Leader to be indicted in office in at least a century. Republicans quickly rallied behind DeLay and announced their support for his return as House Majority Leader. House Speaker, Dennis Hastert, emerged from a meeting with House G.O.P. leaders late Wednesday afternoon and announced DeLay’s replacement as House Majority Leader.

REP. DENNIS HASTERT: The wisdom of the conference today was to move forward. We have elected Roy Blunt as the temporary Leader in the House. With him, we have had — asked a couple of people to kind of step up and help take on responsibilities. Eric Cantor will, as Deputy Whip, will also assume extra duties in the Whip office and David Dreier, as a chairman of the Rules Committee, will help us work with the chairman and move the agenda through across the House floor and make recommendations to both Roy and myself. I think our members were decisive, we’re ready to go to work and roll up our sleeves, and we will finish our agenda and get through this year with flying colors. Roy Blunt.

REP. ROY BLUNT: Thank you, Mr. Speaker. I think it’s fair to say that our members today, while they expressed great regret that Tom DeLay has had to go through what he is going through right now, I think largely because of his effectiveness as a leader, he became a target. We all believe that he will return once this indictment is out of the way to be the Leader again. That’s what our rules call for. That’s why my current situation will be to act as temporary Leader, and Tom would come back as Leader, but he will continue to be an important member of this House, an important part of getting our work done. He is still a member of Congress, is going to be an effective and influential part of what we’re doing as he works now to get beyond this terribly unfair thing that’s happened.

AMY GOODMAN: Republican Congress member Roy Blunt of Missouri and House Speaker Dennis Hastert at a news conference Wednesday.

JUAN GONZALEZ: Tom DeLay was indicted on a single conspiracy charge tied to illegal fundraising activities in Texas. The indictment accuses him and two alleged co-conspirators, John Colyandro and Jim Ellis, in engaging in a scheme to launder $190,000 in corporate donations through the Republican National Committee for distribution to Republican candidates for the Texas legislature. The money was funneled to the RNC from Texans for a Republican Majority Political Action Committee, or TRMPAC, which was created by DeLay and associates for the 2002 state elections. Texas law generally prohibits corporate money from being used for campaign activities.

AMY GOODMAN: TRMPAC money and expertise helped Republicans win control of the Texas legislature for the first time since Reconstruction. At DeLay’s urging, the legislature then conducted a controversial remapping of Congressional districts that resulted in more Republicans from Texas being elected to the U.S. House. TRMPAC itself was indicted on September 8 for accepting illegal corporate funds. Eight corporations and an industry lobbying group have also been indicted during the 34-month probe. At the White House, the President’s chief spokesperson, Scott McClellan, expressed support for DeLay.

SCOTT McCLELLAN: Yes, Congressman DeLay is a good ally, a leader who we have worked closely with to get things done for the American people.

AMY GOODMAN: Tom DeLay is an 11-term Congress member from the Houston area, elected Majority Whip in 1994 and became House Majority Leader in 2002. His reputation as a tough party enforcer has earned him the nickname, the Hammer. With DeLay under fire for three admonishments by the House Ethics Committee on separate issues and amid concerns about the grand jury investigation in Texas, House Republicans changed a rule in November 2004 so that DeLay could keep his leadership post in the event he was indicted. But they were forced to reverse the move two months later, following public outcry. We’re joined right now from Austin by the Executive Editor of The Texas Observer, Jake Bernstein. Welcome to Democracy Now!

JAKE BERNSTEIN: Good morning, Amy.

AMY GOODMAN: It’s good to have you with us. Well, can you talk about the significance of this indictment, and though we have described it somewhat, exactly what Ronnie Earle has charged Congress member DeLay with?

JAKE BERNSTEIN: Well, what you said at the beginning of the program really highlights the significance of it. This is the first time in over a century, I think, that a Leader in the Congress has been — sitting Leader in the Congress has been indicted. And the fact that he had to step down is nothing short of extraordinary. I mean, this investigation has been going on for several years now, and it’s almost like people here in Austin have been holding their breath, and yesterday they finally exhaled. The significance or the substance of the indictment — there’s really not much to go on unfortunately. I mean, it’s a conspiracy charge, and Ronnie Earle, the Travis County District Attorney, did not really go into the evidence behind that charge yesterday. So, it’s left a lot of people scratching their heads exactly what ties Tom DeLay specifically to this $190,000 that is a part of a money laundering allegation.

JUAN GONZALEZ: And, of course, for viewers and listeners who are not in Texas, from other parts of the country, this alleged funneling of money involved a — eventually a redistricting that had enormous impact nationwide in terms of the balance of power in Congress. Could you talk about that redistricting?

JAKE BERNSTEIN: Sure. It was sort of an unprecedented mid-decade redistricting that happened here in Texas, and the result was quite favorable to Tom DeLay and the Republicans. They picked up seven new seats, which certainly went a long way towards keeping the Congress Republican for a long time to come.

As far as the specific money, it’s — for over a hundred years, it’s been illegal to spend corporate money on candidates here in Texas. It’s a legacy of the populists, back at the turn of the century, who were going after the big railroad barons, or at least trying to curtail their power.

What’s alleged to have happened is that $190,000, actually a blank check, was sent up to Washington by the Executive Director of TRMPAC, Texans for a Republican Majority, where it was received by Jim Ellis, who is still the director of Tom DeLay’s national PAC, Americans for a Republican Majority. Now, Ellis then gave it to the Republican National Committee, apparently, according to the indictments, with specific instructions that it be returned as hard money, which could be spent on candidates, to seven specific House candidates — state House candidates here in Texas.

AMY GOODMAN: We are talking with Executive Editor of The Texas Observer, Jake Bernstein, and when we come back, he will also be joined by Doug Ireland, long-time political journalist, to talk about Tom DeLay, who has just been indicted, the Majority Leader of the House. And then we’ll talk about the Majority Leader of the Senate, Dr. Bill Frist, also in trouble.

[break]

AMY GOODMAN: We look at the House Majority Leader, Tom DeLay, and the indictment against him just yesterday, as well as the appointment of the man or men to replace him, and we’ll talk about that in a minute. Our guest is Jake Bernstein, Executive Editor of The Texas Observer. In a nutshell, can you give us a history of Tom DeLay’s career?

JAKE BERNSTEIN: Well, Tom DeLay started famously as an exterminator. He was an exterminator in Sugarland, Texas, who apparently was fed up with E.P.A. rules. And that was sort of the platform that he ran on to get into the state House. He got into the state House and was a state rep here in Texas for a little while and then moved on to Congress. And his rise in Congress has been fairly meteoric. He is now, as you know, Majority Leader. He kind of was in on — he was kind of on the outs with Newt Gingrich and the Republican revolution, but managed still to become Majority Leader. But what the power of Tom DeLay really is is the money. He is a prodigious fund-raiser. He has been very, very successful at raising money and parceling it out to Republican candidates. And that’s really the currency that’s most important in Washington these days.

AMY GOODMAN: I wanted to replay a clip we just played, and that is of Dennis Hastert, talking about who will replace Tom DeLay in the House. Listen carefully.

REP. DENNIS HASTERT: The wisdom of the conference today was to move forward. We have elected Roy Blunt as the temporary Leader in the House. With him, we have had — asked a couple of people to kind of step up and help take on responsibilities. Eric Cantor will, as Deputy Whip, will also assume extra duties in the Whip office and David Dreier, as a chairman of the Rules Committee, will help us work with the chairman and move the agenda through across the House floor and make recommendations to both Roy and myself. I think our members were decisive, we’re ready to go to work and roll up our sleeves, and we will finish our agenda and get through this year with flying colors.

AMY GOODMAN: House Speaker Dennis Hastert. Yes, he said that Roy Blunt would replace Tom DeLay with help from, among others, David Dreier. Doug Ireland joins us on the program today, long-time political journalist, media critic, runs a blog called Direland. Can you talk about the men who will and will not replace Tom DeLay, Doug?

DOUG IRELAND: Well, you have in Roy Blunt a pillar of Republican conservatism and a darling of the religious right whose appointment was hailed by groups like the Family Research Council, the right wing Christian right lobby, as being a wonderful thing. David Dreier, the chairman of the House Rules Committee and one of the most powerful men in Congress, is — very interestingly, The Washington Post in its story yesterday before when Hastert had first recommended Dreier as the replacement for DeLay, not Blunt, The Washington Post called him "a different kind of Republican" in its headline.

Well, that’s kind of amusing, because Dreier is a different kind of Republican. He’s a closet gay man, who has lived with his Chief of Staff, Brad Smith, in a relationship for many years and a closet case. Dreier consistently votes against full rights for gay people. He has voted against, just within the last ten days, the inclusion of gay people in the Hate Crimes Prevention Act. He has voted against the Housing for People with AIDS program, which helps poor people with AIDS to have a place to live. He has voted against allowing gay couples in the District of Columbia to adopt children. Just — and he has opposed the Employment Non-Discrimination Act, which the Congress has yet to pass, which would prevent discrimination on the basis of sexual orientation in employment. So, — and all of these things, of course, Mr. Blunt is in agreement on this homophobic political line that the Republicans used to win the election last year.

JUAN GONZALEZ: So, Doug, there were several press reports that did indicate that there was concern about the most conservative groups within the Republican Party about Dreier taking the lead role in replacing DeLay. So, is it your speculation or your sense that despite his consistently conservative record, that there were those who were opposed to him because of his own gay relationship?

DOUG IRELAND: The fact that Congressman Dreier is gay and in the closet is pretty widely known in the Republican House Conference. I think that there were multiple reasons why the Conference, the Republican Conference, rejected him in favor of Blunt. Yes, I think that the fact that Dreier is a gay closet case was a contributing factor. So was the fact that Dreier in one of his huge divergences from the conservative Republican line is pro-choice, although he favors a lot of limitations on abortion.

Another factor is that there’s been a lot of grumbling in the House Republican Conference among G.O.P. members of Congress since the House was reorganized after last year’s Congressional elections about the fact that so many Californians have powerful House committee chairmanships. They control — members of Congress from California control about half a dozen of the most powerful committees in the Congress. And there’s been a lot of resentment from people in other parts of the country, Republican members of Congress, about that, and elevating Dreier to Majority Leader from chairmanship of the Rules Committee would have made a Californian the top Republican in the House.

So, that, I think, was also a contributing factor, but yes, there was a feeling that Dreier was not conservative enough. He’s pretty conservative, but not conservative enough. Blunt is a dyed in the wool Christian conservative darling of the religious right.

AMY GOODMAN: Talking about Blunt, The Washington Post has an interesting piece today saying, "As Majority Whip, Blunt, even more than DeLay before him, has created a formal alliance with K Street lobbyists, empowering corporate representatives and trade association executives to assist the House leadership in counting votes and negotiating amendments to bring holdouts into the fold." Jake Bernstein, I want to ask you about this. The Post goes on to say, "Last year when the House leadership faced apparently insurmountable odds in passing legislation eliminating a $50 billion export tax break, the lobbying community stepped in to add billions of new tax breaks for major corporations with facilities in nearly every district: General Electric, Boeing, Caterpillar, United Technologies, Honeywell and Emerson. The support built up majority backing for the measure." And then it says, "Blunt’s best known special interest intervention was the 2003 late night attempt, unsuccessful as it turned out, to add an amendment sought by Philip Morris. Blunt’s son then was a lobbyist for Philip Morris in Missouri. Blunt himself was dating a Philip Morris lobbyist whom he later married, and he had received more than $150,000 in contributions from the company and subsidiaries." Jake Bernstein.

JAKE BERNSTEIN: Well, it’s hard to make the argument that this is a clean start. The Associated Press reported yesterday that Blunt’s political action committee has actually paid $88,000 to Jim Ellis, who is one of the people who has been indicted in this campaign scandal here in Texas as a consultant for work that Ellis did for Blunt’s political action committee. So, this is a very sort of incestuous group of politicians.

AMY GOODMAN: Let’s turn now from the House Majority Leader, who is now under indictment, to the, well, it turns out, scandal-ridden Senate Majority Leader, Dr. Bill Frist. Juan?

JUAN GONZALEZ: Yes, DeLay’s indictment is the latest in a recent spate of ethical high-ranking Republicans or Bush administration officials having problems. Last week, it was disclosed that Senate Majority Leader, Dr. Bill Frist, was under federal investigation for a stock sale. The Wall Street Journal is now reporting that the U.S. Securities and Exchange Commission has given subpoena power to investigators looking into potential insider trading by Frist of shares in his family’s corporation, H.C.A., the Hospital Corporation of America. The S.E.C. has officially changed the investigation status from informal to formal. The non-partisan Foundation for Taxpayer and Consumer Rights estimates that Frist made between $2 million and $6 million by selling his H.C.A. holdings just before stock values plummeted in the face of a bad earnings report.

AMY GOODMAN: Doug Ireland, you are writing about — well, your headline in your blog, Direland, says "the bad doctor." Talk about Frist. You have been following him for years.

DOUG IRELAND: Well, the interesting thing that we’re not reading in the mainstream corporate media is just what the Frist family company, H.C.A., Hospital Corporation of America, was all about. When the Bush administration came into office, H.C.A. was, had been for nearly a decade, the target of one of the most extensive federal investigations of any corporation in the history of the United States. And H.C.A. was, in fact, one of the largest corporate swindles in American history.

The company that provided the family money that Bill Frist used to buy himself a Senate seat from the State of Tennessee was obtained by fraud, and fraud on the government. H.C.A. defrauded for years and years the programs designed to help poor Americans get healthcare. H.C.A. defrauded Medicaid. It defrauded Medicare. And it defrauded Tricare, which is of course, the federal program that covers the military and their families. The government case against H.C.A. was basically that the Frist family company kept two sets of books and fraudulently overbilled the government. It inflated its expenses. It billed the government for inflated overrun.

It violated both law and medical ethics when the company increased its Medicare billings by exaggerating the seriousness of illnesses they were treating. It bribed doctors in a whole scale bribery operation. It gives them partnerships in H.C.A. hospitals as a kickback for the doctors referring patients to H.C.A. It gave them free gifts, loans that were never expected to be paid back, gave them free rent, free office furniture, free drugs from hospital pharmacies. All of this to bribe the doctors into referring patients to H.C.A. companies.

When the Bushies came in at a time when this investigation, which the deputy F.B.I. director said was one of the most important the F.B.I. had ever conducted into corporate America, it was expected that Bill Frist’s brother, Thomas, who was one of the richest men in America — Fortune estimated he had over $2 billion — was going to be indicted, along with a raft of H.C.A. executives.

But the Bushies and John Ashcroft decided otherwise. And they arranged a little sweetheart deal with the Frist family, with Bill Frist’s brother, Tom, and the executives of the Frist family business, H.C.A., that let them get off the hook without any jail time. They did have to pay a fine, and the size of the fine tells you just how massive the fraud was, because the fine was for $1.7 billion, with a "b", $1.7 billion that H.C.A. had to pay the government for the fraud that it had committed.

JUAN GONZALEZ: Now, Doug, that was one of the largest fines in U.S. history, wasn’t it?

DOUG IRELAND: It was the largest. It broke the record. The previous old record had been set by Drexel Burnham.

JUAN GONZALEZ: But there were no indictments in the case, no criminal charges?

DOUG IRELAND: Nope, no. They were huge crimes, but no criminals went to jail, not Tom Frist, Bill Frist’s brother, not a single H.C.A. executive went to the can.

AMY GOODMAN: Now, the Senate Majority Leader, Bill Frist, has always said his money is in a blind trust so, you know, it doesn’t compromise him. What about this news, the Wall Street Journal reporting that the S.E.C. has opened a formal investigation into selling off this stock? So, he was directing the person in charge of the trust.

DOUG IRELAND: Well, I mean, it’s quite clear that Frist got rid of the stock for two reasons: Number one, he wants to be President, and having stock in a company that was one of the biggest corporate criminals in American history, when it was a family-owned company, is not exactly a credential you want to present to the American public if you are asking for their votes to become their president.

But more than that, I would say that if Bill Frist was really a patriot first, he would have sold his H.C.A. stock a long time ago, because this company was built on criminal activity. The company was a giant criminal conspiracy that defrauded the programs of the federal government designed to give poor people healthcare.

AMY GOODMAN: We’re talking to Doug Ireland. He runs the blog Direland, long-time political journalist and media critic. As we wrap up this section, yes, we have talked about Dr. Bill Frist, the Senate Majority Leader, Tom DeLay, under indictment right now, the House Majority Leader.

Then there’s Jack Abramoff, there’s David Safavian, the President’s chief procurement officer, stepped down two weeks ago, arrested last week, on charges of lying to investigators and obstructing a separate federal investigation into Jack Abramoff’s dealings in Washington. Jake Bernstein, Executive Editor of The Texas Observer, what about Jack Abramoff, the Republican super-lobbyist, as salon.com describes him, known to have bragged about his contacts with Karl Rove, indicted in Florida last month along with his business partner on wire fraud and conspiracy fraud charges related to their purchase of a fleet of gambling boats? This week, three men were arrested, including two who received payments from Abramoff’s business partner in a mafia-style killing of the man from whom Abramoff and his partner purchased the gambling boats, and Jack Abramoff’s ties to, well, Tom DeLay.

JAKE BERNSTEIN: Well, it’s interesting, Amy, we always thought here in Austin that Tom DeLay was in more trouble because of Jack Abramoff than he would be because of TRMPAC. Abramoff received $82 million from six Indian tribes. And he spent that money in all kinds of places, including for sniper training on the West Bank, which clearly had nothing to do with what the Indians were expecting it was going to be spent on. He paid for DeLay to go to a trip to Scotland. DeLay called Abramoff "my very good friend, Jack Abramoff." Abramoff was clearly trading on his friendship with Tom DeLay in all kinds of places. The Abramoff scandal implicates Grover Norquist. It also touches on —

AMY GOODMAN: Why Grover Norquist?

JAKE BERNSTEIN: Well, Grover Norquist actually received money, this Indian tribe money. He was selling visits to the White House with the President. So, the Indian tribes would give $25,000 through Abramoff to Norquist’s organization, and then they would get a meeting with the President and a visit to the White House. It also implicates Ralph Reed, who was taking money from Abramoff, this Indian money, to campaign against Indian tribes here in Texas, which would then benefit other Indian casinos in other states.

AMY GOODMAN: And, of course, Ralph Reed, also former head of the Christian Coalition. And then you have the — you have Timothy Flanagan, the President’s nominee to serve as Deputy Attorney General under Alberto Gonzales. The eight Democrats on the Senate Judiciary Committee Wednesday called for a new round of questioning of the nominee for the number two job at Justice, seeking more information about his links with indicted lobbyist, Jack Abramoff. Now, Flanagan has said he will have to recuse himself from the Abramoff investigation if he is confirmed, because he hired Abramoff to help the company where he works, scandal-ridden Tyco International, lobby DeLay and Rove on tax issues. Jake.

JAKE BERNSTEIN: Now, certainly if Abramoff decides to sing to save his skin, he is very, very conversant with the whole Republican fundraising network, with all kinds of details that could implicate a number of Republicans throughout the administration and Congress. And so, certainly, I think people have been nervous about that. Abramoff sort of intonated months ago that he was not willing to go down alone, which is why there was so much speculation that testimony from Abramoff could be very damaging to Tom DeLay.

AMY GOODMAN: Well, I want to thank you, Jake Bernstein, Executive Editor of The Texas Observer, for joining us in Austin. And Doug Ireland, long-time political journalist, media critic, writes the blog Direland.

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