Summer truce ending in political litigationRepublicans, Democrats resume fighting over corporate donations
By Laylan Copelin, Austin American-Statesman
Wednesday, August 18, 2004
Texas Republicans and Democrats have been skirmishing over the GOP's use of corporate money in the 2002 campaign for almost two years, but a secret deal between the lawyers provided a summer truce.
The pact, though it's ending, resulted in concessions that will help shape the legal fight for months to come.
Several House Democratic candidates who lost in 2002 sued the Texans for a Republican Majority and the Texas Association of Business, accusing the groups of failing to disclose corporate donations that they say were illegal. The Republicans and their business allies defend their use of the money.
Both sides had their reasons for retreating to their corners for the past three months.
The Republicans didn't want Jim Ellis, a Washington consultant and right-hand money-raiser for U.S. House Majority Leader Tom DeLay, answering questions under oath in a civil lawsuit while a grand jury investigation was grinding on. The GOP also wanted a retired judge, who wouldn't have to face voters, to preside over the case.
In turn, the Democrats got Ellis to abandon his threat to fight the jurisdiction of Texas courts, a defense that he might have lost but that still would have tied up the lawsuit for months.
Meanwhile, in the lawsuit against TAB, the all-Republican Texas Supreme Court has mulled a pretrial appeal for almost seven months, allowing the state's largest business organization to withhold information about its 2002 campaign activities.
All in all, it has made for a relatively quiet summer on the litigation front, but the cat-and-mouse games will resume later this month just as the criminal investigation, fast approaching two years, lurches toward a September deadline.
The lawyers involved in the Texans for a Republican Majority case struck their deal June 4. At the time, the Republicans were hoping that the criminal investigation would be concluded earlier this summer, but there is no end in sight.
The term of the grand jury ends in September, and defense attorneys already are speculating that it could continue past the Nov. 2 election.
Travis County District Attorney Ronnie Earle said only, "We are searching for the truth, and the truth has no deadline."
None of the lawyers involved in the lawsuit against Texans for a Republican Majority would confirm the existence of the secret deal in writing. But they confirm the obvious: The litigation landscape has changed.
Last spring Terry Scarborough, the lawyer for the Republican political action committee, argued that his clients deserved a quick trial over the summer. Now he predicts there won't be a trial until after the Nov. 2 election.
But he praised the appointment of a retired judge, Joe Hart, a former presiding judge for Travis County, to hear the case.
"This is a very political case," Scarborough said. "Having a retired judge ensures the legal decisions will be made on the best legal argument and sound legal reasoning and no other reason."
Likewise, Ellis' lawyer, J.D. Pauerstein of San Antonio, has changed his tune about fighting jurisdiction.
In April, Pauerstein argued that Ellis, who also worked for DeLay's Washington, D.C.-based Americans for a Republican Majority, did not have the "minimum contact" to be sued in Texas. Yet Ellis, in 2002, helped direct campaign donations to Texas Republican candidates; the next year, on DeLay's behalf, he was in Austin for months lobbying for congressional redistricting. He represented private clients as well.
"My inclination is to stay in Texas and fight it out," Pauerstein said last week. "It seems like there is less press coverage and hysteria."
Under the secret deal, the lawyers for the Democratic candidates agreed to temporarily stop seeking information from Ellis or John Colyandro, the former executive director of the Republican Majority PAC.
That truce was to last until "the earlier date of August 16 or a date on which the Travis County grand jury investigating matters relating to TRMPAC ends."
Although the truce ended Monday, Ellis reserved the right to ask a judge to postpone giving a deposition.
Pauerstein said the grand jury investigation is a factor in trial tactics, but he said, "Jim Ellis hasn't been asked to talk to a grand jury."
The lawyers for the Democratic candidates are likely to press Ellis for a deposition, however.
"This suit raises serious questions about the corrosive influence of clandestine corporate cash in Texas elections," said Cris Feldman, a lawyer for the Democratic candidates. "We are eager to have a full trial on the merits so all can assess what happened in the 2002 elections."
The lawsuit claims the Republicans illegally spent $600,000 of corporate money among the $1.5 million they poured into a handful of Texas House races. Scarborough argues that the GOP didn't spend the money to help candidates directly.
The Democrats are seeking $1 million in damages.
In the second lawsuit, Democrats are questioning the $1.9 million in corporate money that the Texas Association of Business spent on direct mail. The business group contends the mail was issue ads and did not advocate the election or defeat of candidates.
The lawsuit involving Texans for a Republican Majority is much further along than a lawsuit against the Texas Association of Business.
Just as the business group fought the grand jury's jurisdiction for a year, it also is objecting to answering questions or providing evidence about the 2002 direct mail campaign in the civil lawsuit.
Houston lawyer Andy Taylor represents the association.
He argues that the First Amendment protects the identities of the corporate donors and the 2002 direct-mail effort because it talked about issues, not electioneering.
On Feb. 2, Taylor appealed a judge's order to provide evidence and answer questions to the Texas Supreme Court. The court ordered that briefs be filed by June 1 but has not taken any action.
Taylor said delay is a two-edged sword.
"TAB is not spending any money defending the lawsuits," Taylor said. "But this cloud still hangs over whether TAB's actions in 2002 fully complied with the law. TAB desires and deserves an answer."