Wyly Brothers, Top Republican Bankrollers, Accused of Massive Fraud

09 Justice, Commerce, Corruption, Open Government, Power Behind-the-Scenes/Special Interests, Secrecy & Politics of Secrecy
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By Dave Levinthal on July 29, 2010

Charles Wyly Jr. and Samuel Wyly, Texas businessmen and brothers who are among the nation’s most generous campaign donors to Republican political candidates and causes, were today hit with a Securities and Exchange Commission lawsuit accusing them of fraud worth hundreds of millions of dollars.

The SEC accuses the Wylys of pocketing $550 million in undisclosed money over 13 years.

“The cloak of secrecy has been lifted from the complex web of foreign structures used by the Wylys to evade the securities laws,” Lorin Reisner, the SEC’s deputy enforcement director, said in a statement this afternoon. “They used these structures to conceal hundreds of millions of dollars of gains in violation of the disclosure requirements for corporate insiders.”

Beneficiaries of Wyly brothers cash together compose a who’s who of the decade’s most notable Republicans, with dozens of top GOP partisans’ campaign coffers touched by Wyly money.

Together with their wives, the Wyly brothers have donated nearly $2.5 million to Republican candidates and committees during the past 20 years, a Center for Responsive Politics analysis reveals.

During the past 20 years, Charles and Dee Wyly have donated $855,150 to the Republican National Committee, while Samuel and Cheryl Wyly donated $483,900 to the RNC, the Center’s research indicates.

Both brothers have also contributed more than $100,000 each to the National Republican Senatorial Committee. The National Republican Congressional Committee, meanwhile has received $106,000 and $54,500 from Samuel Wyly and Charles Wyly respectively.

As recently as June 10, Charles Wyly made a $10,000 contribution to the Republican Congressional Campaign Committee.

(Download a complete list of contributions from the Wylys to federal political committees here: rep.committees.xls You must cite the “Center for Responsive Politics” when using this data.)

Presidents George H. W. Bush and George W. Bush enjoyed Wyly donations directly — each received thousands of dollars — but also the brothers’ fund-raising clout. Charles Wyly raised more than $100,000 for George W. Bush ahead of his 2000 presidential victory and contributed hundreds of thousands of dollars more to fund various advertisements designed to benefit Bush.

The Bushes are among the 192 federal-level candidates to receive contributions from at least one Wyly brother, according to the Center‘s analysis.

Notable politicos include current and former Sens. Kay Bailey Hutchison (R-Texas), Phil Gramm (R-Texas), Dick Armey (R-Texas), John Cornyn (R-Texas), John McCain (R-Ariz.), Bob Dole (R-Kan.), Elizabeth Dole (R-N.C.), Sam Brownback (R-Kan.), Mel Martinez (R-Fla.), Judd Gregg (R-N.H.), Bob Smith (R-N.H.), John Thune (R-S.D.) and Kit Bond (R-Mo.).

In terms of contributions, Charles and Dee Wyly’s favorite federal-level candidates since the 1990 election cycle are:

Candidate Campaign Leadership PAC
Kay Bailey Hutchison (R-Texas)$30,400$0
Pete Sessions (R-Texas)$19,000$10,000
Dick Armey (R-Texas)$10,500$17,500

Top federal-level recipients of Samuel and Cheryl Wyly’s money are:

Candidate Campaign Leadership PAC
Dick Armey (R-Texas)$5,000$22,500
Lamar Smith (R-Texas)$24,000$0
Phil Gramm (R-Texas)$16,000$5,000

(To download a complete Center for Responsive Politics list of the Wylys’ contributions to federal-level candidates, click here: wyly.candidate.xls You must cite the “Center for Responsive Politics” when using this data.)

A Wyly family representative could not immediately be reached for comment. But family lawyer William Brewer III said in a statement that the Wylys “intend to vigorously defend themselves — and expect to be fully vindicated.”

Official corporate biographies of the Wyly brothers may be found here: samwylybio.pdf and charleswylybio.pdf

Center for Responsive Politics Senior Researcher Doug Weber contributed to this report.

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