US House of Representatives majority leader Tom DeLay was indicted last night for his part in a Texas campaign-finance conspiracy and has resigned his post.
The powerful Texan, the second-ranking House Republican, could face up to two years in prison if convicted.
Mr DeLay denied any wrongdoing and said he was being persecuted because of his political successes.
"This is one of the weakest, most baseless indictments in American history. It's a sham. It's a charge that cannot hold up even under the most glancing scrutiny," Mr DeLay said in Washington.
Mr DeLay was indicted by a Travis County grand jury for criminal conspiracy in a scheme with two alleged co-conspirators, John Colyandro and Jim Ellis, to launder $190,000 in corporate donations through the Republican National Committee (RNC) for distribution to Republican candidates for the Texas Legislature.
The money was funnelled to the RNC from Texans for a Republican Majority political action committee, or TRMPAC, which was created by Mr DeLay and associates for the 2002 state elections.
Texas law does not permit the use of corporate money in political campaigns.