Wednesday, March 3, 2004

Two years ago, Bill Zedler won a tough Republican primary battle for a state House seat, went on to beat his Democratic opponent and fought off a lawsuit that said he had not established the required residency in District 96.

Legislator's legal bills scrutinized

Part of grand jury investigation into TRMPAC

By Jay Root, Fort Worth Star-Telegram
March 3, 2004

AUSTIN - Two years ago, Bill Zedler won a tough Republican primary battle for a state House seat, went on to beat his Democratic opponent and fought off a lawsuit that said he had not established the required residency in District 96.

But thousands of dollars of his legal bills were paid for by Texans for a Republican Majority, a group founded by U.S. House Majority Leader Tom DeLay, R-Sugar Land, records show.

Now some of Zedler's legal bills have come under scrutiny in a grand jury investigation of 2002 fund raising, according to subpoenas on file at the Travis County Courthouse in Austin. A review of state and federal records indicates that much of the money used to pay the bills was corporate funds, the use of which is heavily restricted.

Zedler, a freshman lawmaker now running for re-election, said that his lawyers got the Republican Majority money and that he has no idea who donated it. Zedler has not been subpoenaed.

"I have to have knowledge that it was inappropriate for me to have a problem," Zedler said. "I had zero knowledge, so I know I have zero problems."

It is illegal for candidates to receive corporate money for and spend it on their election campaigns, and political action committees such as the Republican Majority can use it only for "administrative" expenses such as rent and utilities, according to the Texas Ethics Commission.

Legal bills for a candidate, as opposed to a PAC, would not qualify as an administrative expense payable with corporate dollars, said Texas Ethics Commission Executive Director Karen Lundquist. She also said candidates would be required to disclose anything they spend on legal fees.

"If somebody pays your legal bills for a residency challenge, that would be a contribution to you as long as you knew about it," Lundquist said. "As far as an administrative expense, it's not." In early 2003, Zedler reported a $10,000 contribution from the Republican Majority for "legal fees" paid to a San Antonio firm, but he did not report $1,200 paid by the committee to Fort Worth lawyer Nick Acuff.

The expenditures are reported on Internal Revenue Service forms that require the disclosure of corporate donations. But they were not listed on state Ethics Commission records that do not require such disclosure.

Zedler said he didn't report the $1,200 on his disclosure forms because he didn't know about it. He said that if he determines that it was used for his residency case, he will report it as a donation.

A December e-mail from John Colyandro, Republican Majority director, to a Republican Majority accountant mentions Zedler's legal obligations to the firm Acuff & Gamboa and to Arlington lawyer Paul Francis.

"Pay $5,000 to Acuff and Gamboa. Nothing more," Colyandro wrote. "We are not paying Paul Francis. I told Bill Zedler that the remainder of the Acuff bill and the Francis bill are his responsibility. You might draft a letter to that effect."

Neither Colyandro nor his lawyer returned phone calls. Attempts to reach Francis were unsuccessful.

Zedler said he never got a letter about the bills and has been unable to reach Colyandro. He said the Republican Majority promised to pay up to $25,000 of his legal bills but didn't come through.

"I will pay it off after this primary because I will have money in the campaign chest," Zedler said.

Acuff said he never got the $5,000 mentioned in the e-mail, but state records show that the Republican Majority paid him $4,000 over the summer.

With the investigation heating up, the state Republican Party is calling for the Texas Legislature to relieve Democrat Ronnie Earle, Travis County district attorney, of investigative powers and transfer them to the office of the attorney general, a post now held by a Republican.

Republican Gov. Rick Perry would not rule out supporting such an initiative, Perry spokeswoman Kathy Walt said.

"On the face of it, the governor would not have a problem with that, with reviewing that or having the debate," Walt said.

Earle said that in his 27 years in office, elected officials have repeatedly called for relieving him of the power to prosecute them. "Public outrage" has always stopped them, he said.

"There is no principle of Texas law more important than the principle of local prosecution," he said. "Every time that we have prosecuted high-level state officials, there have been attempts to mess with the Public Integrity Unit."