Monday, August 15, 2005

The Ryun, Delay, Westar Axis

Following up on a story from yesterday (and last September).

One scandal swirling around Delay and his PAC is the allegation that, speaking bluntly, Delay solicited bribes from executives of Westar, a Topeka based energy company with diversified interests. They wanted a special purpose provision to protect them from potential new reporting provisions if they spun off a money-losing home security division.

We know they went to Delay and asked how to get their amendment tacked on to the Investment Company Act. We know this because the memos came out, and Public Citizen has a nice page full of actual documents, illustrating the progression of this particular scandal.

Delay explained that several congressmen needed to get certain contributions for themselves and their allies in order for the amendment to pass, contributions totaling $56,500, including $25,000 to Delay's PAC. The donations were made, and shortly thereafter, the amendment passed.

Public Citizen explains the amendment like this:

the exemption sought by Westar was critical for it and its executives to allow then CEO David Wittig and vice president Douglas Lake to split up the company in a deal that would garner Wittig as much as $15 million and Lake as much as $12 million. [Washington Post, 6/7/03] The exemption was also critical to split Westar’s regulated utility from the rest of its businesses to enable Westar to transfer more than $3 billion in debt to the utility company. The utility could then try to pass those costs to its customers through utility rate hikes. [AP Newswire 6/6/03, Yost]. For this reason, the Kansas Corporation Commission, in addition to the Securities and Exchange Commission, had opposed the exemption (see below).
Wittig and Lake are currently on trial on fraud, conspiracy and money laundering charges surrounding this plan. As this article shows, using contributions to buy support for this scheme was their modus operandi.

Wittig gave $800 to Ryun in 2002 and $2,000 in 2000; Lake gave $300 in 2002, $1000 in 2000. Since 1997, Ryun got almost $12,000 from Westar, including a total of $2,800 from Wittig.

Dennis Moore – who received some money from Wittig and Lake as did all of the incumbent Kansas Congressmen – opposed the exemption before the influence peddling became public knowledge in May, 2003. Ryun defended the exemption at the time, while the rest of the Kansas delegation claimed ignorance.

What follows is speculation, questions that ought to be asked, but that I don't have answers to. I'm not alleging facts, I'm just wondering out loud.

If you had a problem that needed federal action, who would you turn to? I'd go to my congressman first, and the Westar congressman would be Jim Ryun.

How did Westar get to talking with Delay? While there's a certain logic in going straight to the top, one might also begin by feeling out one's representative, who, if he has close ties to the Majority Leader, can set up a meeting and arrange favorable terms.

How was the $25,000 to TRMPAC spent? Delay is known to have moved money between his PACs, so money donated to TRMPAC (the Texan for a Republican Majority PAC) could flow to ARMPAC (the national version). That's 5 times Delay could max out a contribution, and he maxed out Ryun once ($5,000) in 2002 and twice ($10,000) in 2004.

It is easy to imagine a scenario in which Jim Ryun acted as the initial contact, or even a go-between throughout the process. I don't know that that happened, but it's difficult to imagine Westar completely ignoring their congressman as they tried to get this key amendment through.

Going against this hypothesis is Ryun's position on the House Committee on Financial Services. It's a powerful committee with jurisdiction over a bill relating to the Investment Company Act. Why did the action happen in the Energy Committee? On the other hand, the amendment was attached to an energy bill, and Ryun wasn't on the conference committee for it, meaning he had no way to help it along if he wanted to.

If you review the debate over the bill, you see various people debating what should happen to this Kansas company, none of whom represent Kansas. That's odd. I don't know if Ryun was sitting it out to protect his reputation or if he was kept out of the loop. On one hand, he was deceiving the public, on the other, his constituent didn't think he was competent to get something done. Neither speaks well of him.