The WaPo reports that the federal probe is edging closer to Tom DeLay and raises some interesting insight into DeLay’s campaign funds and his defense fund. It seems that contributions (largely from corporate entities) for DeLay’s defense fund had dropped drastically in the last quarter of ‘05. Under FEC rules, any or all of DeLay’s campaign funds can be converted to pay for his legal expenses…

DeLay has assembled a substantial legal team to fight back, and he has a defense fund — financed largely by corporations with business before Congress — that contained more than $600,000 at the end of last year, based on the cumulative record of its receipts and contributions. But contributions to the fund dropped from $318,000 to $181,500 between the third and fourth quarters of 2005.

DeLay also is entitled under federal election rules to convert any or all of the remaining funds from his reelection campaign to his legal expenses, whether or not he resigns, is indicted or loses the election. Election lawyers say one advantage of bowing out of the election now is that the campaign cash can be converted to pay legal bills immediately, instead of being drained in the course of a bid to stay in office.

As of Feb. 15, when his campaign filed its most recent report with the Federal Election Commission, DeLay had $1,295,350 on hand. But that was two weeks before the Texas primary in which DeLay bested three Republican rivals to win renomination, and the pot of money available to him now may be considerably less.

By stepping aside so early in an election year, a lawmaker “wouldn’t be spending to be reelected” and could transfer the funds immediately to fend off any federal charges, said lawyer Kenneth A. Gross, a former head of the FEC’s enforcement division. The last lawmaker to gain the FEC’s formal approval for such a transfer was Rep. Randy “Duke” Cunningham (R-Calif.), who resigned last November after pleading guilty to evading taxes and accepting bribes.

Although DeLay maintains his innocence, the implication of the increased heat from the federal investigation can not be ignored. With contributions to his defense funds dropping, being able to transfer election funds could come in handy for DeLay… Muckracker had the same thought here.

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