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Did Mitt Romney and Rick Perry Make an Illegal Million-Dollar Backroom Deal?

A new lawsuit reveals contradictory stories about an illicit $1 million campaign contribution from “Swift Boat” funder.

This story originally appeared at Salon.

 “Follow the money” is an elementary rule for understanding American politics, and in the case of Texas Gov. Rick Perry, the money trail leads to a case of apparent money laundering that involves his Republican presidential rival Mitt Romney and a $1 million contribution from the same Texas tycoon who bankrolled the “Swift Boat” attacks against the 2004 Democratic presidential candidate, Sen. John Kerry.

Bobby Jack “Bob” Perry, a residential construction magnate in Houston, is not related to Rick Perry by blood, only money. But there has been lots of that. As with the Swift Boaters to whom he donated $4.45 million, Bob Perry ranks as the single largest donor to Rick Perry during the latter’s 10 years as governor of Texas, according to official figures tabulated and analyzed by Texans for Public Justice, a nonprofit watchdog group in the state capital of Austin.

Bob Perry contributed $2,531,799 directly to Rick Perry from January 2001 to July 2011, TPJ reports in “Crony Capitalism: The Republican Governors Association in the Perry Years.” That puts him well ahead of such other notable donors as Koch Industries, the energy conglomerate owned by David and Charles Koch, the chief funders of the Tea Party, and Contran Corp., whose efforts to establish a nuclear waste dump in Texas have succeeded thanks to regulators appointed by Perry. (As Justin Elliott  reported this week, Perry is also a leading funder of Karl Rove’s American Crossroads political action committee.)

But to truly understand Rick Perry’s “pay-to-play” approach, TPJ executive director Craig McDonald told Salon, one must also look at contributions to the Republican Governors Association, which he chaired from 2008 through August 2011.

In an apparent and possibly illegal attempt to hide the money’s true origins, Bob Perry has routed $11,450,000 — five times the amount he has contributed to Gov. Perry directly — through the Governors Association since 2006.

That same year, Perry donated $1 million to the Governors Association, which days later channeled $1 million to Gov. Perry’s troubled reelection campaign. When Chris Bell, Gov. Perry’s Democratic challenger in 2006, filed suit alleging campaign finance violations, Perry’s campaign agreed to settle the case and pay Bell $426,000, nearly half the amount of the contribution at issue.

The Governors Association, however, refused to settle. In 2010, state Judge John K. Dietz ruled that the group had violated Texas law by not registering as a political committee and not reporting the $1 million contribution until after the election. The judge awarded $2 million to Bell, a ruling the Governors Association is appealing.

“I think it was a pass-through,” Bell told Salon. “They were trying to hide the source of the contribution.”

Bell speculated that the Perry campaign wanted to avoid charges of hypocrisy after criticizing Bell for accepting a $1 million contribution from a Texas trial lawyer, a contribution that Bell announced publicly. Texas law allows individuals to contribute unlimited amounts to candidates.

“Bob Perry had contributed hundreds of thousands of dollars to Rick Perry’s campaign prior to 2006,” Bell said. “So why else would he pass it through the Republican Governors Association, if they weren’t trying to hide the source of the contribution?”

That $1 million contribution by Bob Perry could come back to bite Rick Perry during this year’s presidential campaign. Romney could also face trouble. He was the chairman of the governors group in 2006 and reportedly participated in the decision to channel money to Perry’s campaign.

As reporters  Murray Waas and David Henderson of Reuters revealed on Wednesday, court documents describing Romney’s role indicate that two of Gov. Perry’s closest aides may have given “false or misleading testimony under oath” in their depositions for Chris Bell’s civil suit: