Republican Congressmen scotch FDIC investigation of large contributor

The LA Times reports that Republican Majority Leader Tom DeLay together with two California Republican Congressmen caused federal banking regulators to drop an investigation of banking activities by Houston millionaire Charles Hurwitz.

Charles Hurwitz had owned 25% of the United Savings Assn. of Texas which was controlling interest. It failed in 1988, costing taxpayers $1.6 billion. in 1995 the FDIC began an investigation of Hurwitz and was seeking $300 million in reimbursement from Hurwitz for his role in the collapse of the financial institution.

In 1999 Tom DeLay wrote a letter to the head of the FDIC stating that the investigation was a "form of harassment and deceit on the part of government employees." When this failed to stop the FDIC investigation, California Representatives Reps. John T. Doolittle and Richard W. Pombo used their positions on the House Resources Committee to subpoena the FDIC's confidential evidence on Hurwitz resulting from the investigation. In 2001 they inserted many of the documents into the Congressional Record where Hurwitz's attorney's were able to determine the details of the government's case against him. FDIC officials stated this weakened the case that they were building against Hurwitz, resulting in them dropping the investigation in 2002.

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

Not only did the publication of the FDIC documents require the agency to ultimately drop the case against Hurwitz (costing the taxpayers the $300 million reimbursement), Hurwitz later took the federal government to court in a civil trial and forced the government to pay his attorney's fees.