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The Nation

A Donor Who Had Big Allies

DeLay and two others helped put the brakes on a federal probe of a businessman. Evidence was published in the Congressional Record.

January 08, 2006|Richard A. Serrano and Stephen Braun | Times Staff Writers

But what lay behind Doolittle's action, and the actions of Pombo and DeLay, did not become clear until recently, when the government documents and copies of letters between the congressmen and FDIC officials were obtained by The Times.

J. Kent Friedman, the general counsel for Hurwitz's vast Houston-based holding company, said last week that the FDIC was overzealous in its dealings with his boss.

"Their case was weak from the start. They had a terrible case," Friedman said. He said anyone trying to connect the congressmen to the fact that the case fell apart would be "attempting to put a bow on a pig."

The Texas S&L in which Hurwitz held a controlling interest of about 25% collapsed in 1988 as part of a financial fiasco that took federal regulators years to untangle. The investigation of Hurwitz began in 1995 and continued for about seven years before it was dropped.

After DeLay's 1999 letter attacking the investigation failed to dissuade the FDIC, Doolittle weighed in with a statement on the House floor in 2001, saying the FDIC investigators were "clearly out of control" and should have "dropped the case, period."

Pombo, in his own 2001 floor statement, suggested that the banking regulators were using strong-arm methods against Hurwitz, or what Pombo called "tools equivalent to the Cosa Nostra -- a mafia tactic."

Doolittle, 55, an eight-term congressman, represents California's fourth district, the Sierra Foothills region and the eastern suburbs of Sacramento. He has a consistent conservative voting record, opposing gun control and abortion and siding with property rights, timber and utility interests against environmental groups.

By 2000, he had grown close to DeLay, working with the Republican leader to oppose proposed changes to campaign finance law and restrictions on fundraising. When DeLay was indicted in Texas last year, Doolittle distributed about 100 lapel pins in the shape of tiny hammers as a tribute to the man nicknamed the "Hammer" for his ability to pound congressional Republicans into line.

Doolittle also was closely aligned with Abramoff. Records show that Abramoff gave Doolittle tens of thousands of dollars in contributions and employed the congressman's wife for other fundraising activities.

Pombo, the son of cattle ranchers, plays up his cowboy roots, often appearing in his district wearing a ranch-hand's hat and ostrich-skin boots. Forty-five years old, a seven-term congressman, he represents the fertile farming expanse of the Central Valley.

He had impressed DeLay with his fundraising prowess, garnering about $1 million for his 2002 House reelection, which he won easily.

And not long after his role in helping Hurwitz, the GOP House caucus -- led by DeLay -- helped get Pombo elected chairman of the Resources Committee over several more senior Republicans.

Hurwitz has been a prolific campaign donor since the early 1990s.

He has contributed personally and with funds provided by his Houston-based flagship company, Maxxam Inc., through subsidiaries such as Kaiser Aluminum, and through a company political action committee, Maxxam Inc. Federal PAC.

In the last three federal elections cycles, those entities have given about $443,000 in political contributions -- most of it to conservative politicians, including President Bush, for whom Hurwitz pledged to raise $100,000 in the 2000 campaign and also helped during that year's vote tally deadlock in Florida.

Hurwitz has been generous with DeLay too.

Starting in the 2000 election cycle, the businessman and his committees have distributed at least $30,000 to DeLay and his federal causes, including $5,000 for his current legal defense fund in the Texas money-laundering case.

Hurwitz also contributed $1,000 to Pombo for his 1996 reelection campaign. And through the Maxxam PAC, Hurwitz gave Doolittle $5,000 for his 2002 reelection campaign and then followed up with $2,000 more for his 2004 race.

When DeLay went to bat for Hurwitz, he was particularly critical of reported internal government discussions that would have pressed Hurwitz to settle his obligations for the collapsed S&L by selling the government vast forest areas and redwood trees in Northern California near Scotia. The forest land was owned by Hurwitz's Pacific Lumber company

"I am extremely concerned," DeLay told then-FDIC Chairwoman Donna A. Tanoue, "about the apparent abuse of governmental power and what appears to be misconduct in the form of harassment and deceit on the part of government employees."

Tanoue responded by telling DeLay "we can assure you that the FDIC lawsuit against Mr. Hurwitz was not filed for political reasons."

The investigation pressed on, and a year later the House Resources Committee, which had jurisdiction because of the forest area, set up a special Headwaters Forest Task Force and launched its own review. Doolittle was appointed task force chairman, and Pombo one of its members.

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