No.2 Republican in U.S. House indicted

By Hilary Hylton

AUSTIN, Texas (Reuters) - The second-ranking Republican in the U.S. House of Representatives, Majority Leader Tom DeLay, was indicted on Wednesday on a felony campaign-finance charge and temporarily stepped down from his post.

The powerful Republican, nicknamed "The Hammer" for his reputation as a tough party enforcer, could face up to two years in prison if convicted on the charge handed up by the Travis County grand jury in the Texas state capital, Austin.

DeLay was indicted on a single conspiracy charge tied to illegal fund-raising activities by Texans for a Republican Majority, or TRMPAC, a political action committee he created, the Travis County District Attorney's office said.

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.

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

Delay denied any wrongdoing.

House Republican rules require DeLay to give up his leadership position because of the indictment, although he can remain in Congress. Republicans had scrapped the indictment rule during the course of the DeLay probe, but then reversed the move this year following a public outcry.

DeLay, the second-ranking Republican in the U.S. House of Representatives, said in a statement: "I have notified the speaker that I will temporarily step aside from my position as majority leader pursuant to rules of the House Republican Conference and the actions of the Travis County District Attorney today."

ETHICAL QUESTIONS

The indictment is the latest in a recent spate of ethical questions involving high ranking Republicans or Bush administration officials. Last week, it was disclosed that Senate Majority Leader Bill Frist was under federal investigation for a stock sale.

Also, the top White House procurement official resigned days before his arrest last week on lying and obstruction charges in a probe of a 2002 golf trip he took, while serving in another administration post, with a Republican lobbyist.

Republicans in the House were expected later in the day to meet and select a successor to DeLay, who was first elected as majority leader in November 2002.

Among the possible contenders were: House Republican Whip Roy Blunt of Missouri, Rules Committee Chairman David Dreier of California and Education and Workforce Committee Chairman John Boehner of Ohio.

White House spokesman Scott McClellan called DeLay "a good ally, a leader who we have worked closely with to get things done for the American people.,"

"I think that the president's view is that we need to let the legal process work," he said.

Delay, who has represented a Houston-area district since winning election to the House in 1984, dismissed the charges as having "no basis in the facts or the law."

DeLay has said he was not involved in TRMPAC's day-to-day activities.

WITCH HUNT

He has frequently accused Travis County District Attorney Ronnie Earle, who has led the TRMPAC investigation, of conducting a political witch hunt and did so again on Wednesday.

"This indictment is nothing more than prosecutorial retribution by a partisan Democrat," he said.

DeLay's indictment was the latest in a growing line of charges related to TRMPAC.

On September 8, TRMPAC and lobby group Texas Association of Business were indicted on charges of illegally funnelling corporate donations into 2002 elections for Texas Legislature.

Last year, Colyandro, Ellis and Warren Robold, all DeLay associates, were indicted in the case and are awaiting trial. They were charged with accepting a total of $600,000 in illegal corporate contributions.

TRMPAC's money and expertise helped Republicans win control of the Texas Legislature for the first time since the post-Civil War Reconstruction era.

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.