Investigation spreads to corporate boardroomsGrand jury subpoenas AT&T records on 2002 elections
By Laylan Copelin, Austin American-Statesman
Wednesday, April 7, 2004
The yearlong investigation into allegations of secret spending of corporate money in the state's 2002 legislative campaigns has moved into corporate boardrooms.
An AT&T spokesman confirmed Tuesday that prosecutors subpoenaed records from the corporation's vice president of government relations, Michael Jewell, who is based in Austin.
Kerry Hibbs, an AT&T spokesman, declined to say what the subpoena requested specifically except to say, "It's the topic you've been writing about."
The subpoena has not been filed publicly, and prosecutors declined to comment Tuesday.
Travis District Attorney Ronnie Earle began investigating the Texas Association of Business a year ago after the president of the state's largest business organization, Bill Hammond, boasted of helping elect a Republican majority to the Legislature by spending $1.9 million contributed by corporations.
Hammond has refused to disclose the corporate donors, saying the $1.9 million was spent on voter education mailers that are protected from state regulation by the First Amendment. Critics have argued that the mail pieces were political advertising that violated the state law barring the use of corporate money for campaign expenditures. The offense is a felony.
Hammond raised most of the $1.9 million by calling on lobbyists representing corporations.
While AT&T is the first corporation to be identified as readying its records for investigators, the company is thought by Capitol sources to be just the first of many corporations being drawn into the expanding investigation. The investigation already had spread to include Texans for a Republican Majority, a political committee created under the direction of U.S. House Majority Leader Tom DeLay, R-Sugar Land. That group spent almost $1.5 million, mostly in the same state House races targeted by Hammond. The money included $600,000 in corporate donations, mostly raised by DeLay's corporate fund-raiser, who called on Washington lobbyists representing companies.
While state law bars corporate money from being spent on campaign expenditures, it allows political committees to spend corporate money on administrative expenses. Lawyers for Texans for a Republican Majority argue that the corporate money it spent on consultants, pollsters and phone banks went for administrative expenses that did not benefit a candidate directly.
Earle also is investigating Texas House Speaker Tom Craddick, R-Midland, because of reports he delivered money from Texans for a Republican Majority and Union Pacific railroad to House candidates who later voted for him for speaker. Craddick has denied any wrongdoing.
A specific law on speaker campaigns bars outside groups from directly or indirectly influencing the election, in which only 150 House members vote.