Bacardi indictment draws top Republican into donation row

Adrian Gatton
Sunday 26 September 2004 00:00

Bacardi has been indicted by a Texas grand jury on charges of making an illegal $20,000 (£13,600) payment to a Republican political group whose founder lobbied against rival Cuban rum brand Havana Club.

The charge against the rum giant is the latest twist in the decade-long "rum war" between the exiled anti-Castro rum dynasty and communist Cuba. At stake is control of the US trademark for Bacardi's arch rival, Cuban-distilled Havana Club, currently owned by Cubaexport - a joint venture of Cuba and French drinks giant Pernod Ricard.

The drink is the fastest-growing rum brand in the world but, because of a legal dispute going back to Fidel Castro's revolution in 1959, both sides claim to own it in the US. Bacardi lost the last round of the trademark dispute, but is appealing.

On 21 September, Bacardi USA, based in Miami, was charged by a grand jurybased in the Texas capital, Austin, with making an "unlawful political contribution" to a political action committee (PAC), Texans for a Republican Majority. This breaches the Texan election code.

The PAC was founded by, and is closely linked to, Republican House majority leader Tom DeLay, seen as one of Bacardi's staunchest supporters in Washington. A copy of Bacardi's cheque no 00189933, issued on 3 July 2002 and carrying its world-famous bat logo, was filed among court papers seen by The Independent on Sunday. If convicted, Bacardi could be fined $20,000.

The charge is one of 32 indictments against a dozen companies and individuals and is part of a sweeping investigation into whether corporate cash was illegally used to help Republicans win the 2002 Texas state elections. Congressman DeLay has not been charged himself, but some of his aides have.

Cheque no 00189933 has become a thorn in the side for Mr DeLay, who has been dogged by allegations of favouring Bacardi. Last June, outgoing Texas Congressman Chris Bell filed an ethics complaint in the House of Representatives, which accused Mr DeLay of trading finance for favours. The House ethics committee has yet to decide whether to investigate Mr Bell's complaint.

Mr DeLay appears unperturbed. He said that he has not been indicted and dismissed the charges as electioneering.

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