The AP's Larry Margasak has the story.

A Texas grand jury on Wednesday charged Rep. Tom DeLay and two political associates with conspiracy in a campaign finance scheme, an indictment that could force him to step down as House majority leader.

DeLay attorney Steve Brittain said DeLay was accused of a criminal conspiracy along with two associates, John Colyandro, former executive director of a Texas political action committee formed by DeLay, and Jim Ellis, who heads DeLay's national political committee.

GOP congressional officials said the plan was for DeLay to temporarily relinquish his leadership post and Speaker Dennis Hastert will recommend that Rep. David Dreier of California step into those duties.

[...]

The indictment against the second-ranking, and most assertive Republican leader came on the final day of the grand jury's term. It followed earlier indictments of a state political action committee founded by DeLay and three of his political associates.

Even if DeLay eventually beats the rap, these are tough days to be a Republican, with an indictment of one leader and an insider trading investigation of another.

[Update 10:14 AM Pacific]: Reuters is also reporting that DeLay is leaving the Republican Party leadership.

U.S. House Majority Leader Tom DeLay said he would "step aside" from his congressional leadership post following his indictment in Texas on Wednesday on one conspiracy count, his office said.

"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," he said in a statement.

[Update 10:30 AM Pacific]: Laylan Copelin explains the charge against DeLay for the Austin American-Statesman.

The charge, a state jail felony punishable by up to two years incarceration, stems from his role with his political committee, Texans for a Republican Majority, a now-defunct organization that already had been indicted on charges of illegally using corporate money during the 2002 legislative elections.

[Update 10:47 AM Pacific]: The SEC is opening up an official probe to look at Senate Majority Leader Bill Frist's stock sales. More here.

[Update 11:08 AM Pacific]: The White House has some very kind things to say about the recently (if temporarily) departed House Majority Leader. Again, the AP's Larry Margasak.

White House press secretary Scott McClellan said the president still considers DeLay a friend and effective leader in Congress.

"Congressman DeLay is a good ally, a leader who we have worked closely with to get things done for the American people," McClellan said. "I think the president's view is that we need to let the legal process work."

[Update 11:26 AM Pacific]: The Hill's House GOP correspondent Patrick O'Connor adds another wrinkle to the story.

The indictment means DeLay will be required to resign his leadership post, sparking a potential race to succeed the Majority Leader that could threaten a fragile balance of power within the Republican conference.

[...]

GOP House leaders must first decide who will fill DeLay's leadership post. House Speaker Dennis Hastert (R-Ill.) could tap a senior to member of the conference to temporarily replace DeLay while the majority leader and his legal team determine the extent of the charges against him. But that option would require the cooperation of an increasingly restive conference.

Sources say that leadership wants to install House Rules Committee Chairman David Dreier (R-Calif.) as DeLay's temporary replacement as Majority Leader. [emphasis added]

[Update 12:23 PM Pacific]: The AP's Larry Margasak is reporting that DeLay has figured out his new line of defense -- the D.A. is a partisan Democrat.

A Texas grand jury on Wednesday charged Rep. Tom DeLay and two political associates with conspiracy in a campaign finance scheme, forcing the House majority leader to temporarily relinquish his post. A defiant DeLay insisted he was innocent and called the prosecutor a "partisan fanatic."

"I have done nothing wrong ... I am innocent," DeLay told a Capitol Hill news conference in which he criticized the Texas prosecutor, Ronnie Earle, repeatedly. DeLay called Earle a "unabashed partisan zealot," and "fanatic," and described the charges as "one of the weakest and most baseless indictments in American history."

The only problem with this tactic: Earle has actually investigated more Democratic politicians than Republicans, as Media Matters notes.

While Earle is an elected Democrat, as Media Matters for America has previously noted, a June 17 editorial in the Houston Chronicle commended his work: "During his long tenure, Travis County District Attorney Ronnie Earle has prosecuted many more Democratic officials than Republicans. The record does not support allegations that Earle is prone to partisan witch hunts." This assertion supports Earle's own claim about his record; a March 6 article in the El Paso Times reported: "Earle says local prosecution is fundamental and points out that 11 of the 15 politicians he has prosecuted over the years were Democrats."

Margasak does not report these numbers to refute DeLay's claim, but perhaps these facts will make their way into the evening broadcasts and the morning papers.

[Update 1:20 PM Pacific]: The AP's Larry Margasak, who's doing a fantastic job of keeping this story updated by the minute, reports that Dreier, a social moderate, is out and Blunt is in.

Republicans selected Rep. Roy Blunt, R-Mo., the current Republican whip — No. 3 in the leadership ranks — to fill the vacancy temporarily.

Says Josh Marshall, "Will Dreier ascend? Cold hand of James Dobson grips the House."

[Update 2:13 PM Pacific]: A conversation I had with the press secretary to Rep. Greg Walden, Oregon's sole Republican member of the House, yielded no immediate response to either the indictment of DeLay or the selection of Blunt, though a promise to send any new information on the Congressman's position was made.

[Update 2:22 PM Pacific]: Margasak speaks with the foreman of DeLay's grand jury and relays some interesting quotes.

The grand jury's foreman, William Gibson, told The Associated Press that Earle didn't pressure members one way or the other. "Ronnie Earle didn't indict him. The grand jury indicted him," Gibson told The Associated Press in an interview at his home.

Gibson, 76, a retired sheriff's deputy in Austin, said of DeLay: "He's probably doing a good job. I don't have anything against him. Just something happened."

Does this nix DeLay's attempt to make the indictment seem like a partisan attack by Earle?

[Update 9:18 PM Pacific]: The Hill's Patrick O'Connor adds a couple of interesting pieces of information to the story. The first explains how the job of temporary leader shifted from David Dreier to Roy Blunt.

After press reports shortly after the indictment that Dreier would assume the temporary position of majority leader, conservative activists from around the country flooded the Speaker’s office with phone calls protesting the selection of Dreier, according to one leadership aide. Many of the callers protested his vote on a controversial stem-cell measure earlier this year.

O'Connor also reports that the "arrangement will hold through the end of the year."

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