Corporate gifts still pouring into PACs$3.5 million reported donated in '04 despite 32 indictments
By CHRISTY HOPPE / Dallas Morning News
October 6, 2004
AUSTIN _ A 21-month grand jury investigation that led to 32 recent indictments has done little to stem the flow of corporate money into Texas political action committees, which have reported at least $3.5 million in such "soft dollar" contributions during the first six months of 2004.
Finance reports examined by The Dallas Morning News show that corporations and unions still provide significant money for political groups. Such donations are legally confined to covering "administrative expenses" of political committees and cannot be used for individual candidates.
This is the first year political action committees must report their corporate and union contributions in Texas. Almost all of the 88 groups that reported raising corporate donations did so exclusively from among their constituents _ such as Realtors giving to the Texas Association of Realtors Issues Mobilization Political Action Committee.
In almost two-thirds of the reports, the political committees raised less than $10,000 in corporate money, and most said they used the money to cover expenses such as utilities and rent.
A handful of political groups _ most of them with Republican affiliation _ continued to raise money from nonconstituent corporations.
The biggest beneficiary during the first half of 2004 was the Republican Party of Texas, which collected $1.3 million in corporate money through June 30, spending most of it on state and national convention expenses.
The Democrats raised $585,000 in corporate and union gifts, also used to cover convention costs, a spokesman said.
During all of 2002, the Republican Party raised $6.1 million in corporate donations; the Democrats $399,000.
"In 2004, there's not much political action in Texas," said Craig McDonald, executive director of Texans for Public Justice, a campaign finance reform group that filed criminal complaints prompting the grand jury investigations leading to the indictments.
Apart from a handful of statewide races this year, Mr. McDonald noted that the McCain-Feingold campaign finance law, limiting "soft money" donations to national campaigns, has taken root. He said fluctuations in corporate giving are hard to gauge.
But regardless of whether Texas is at a tipping point, "I do think from now on that corporations are going to be much more cautious," Mr. McDonald said.
Travis County grand juries are looking into two efforts in 2002 fueled with corporate money. Three fund-raisers and eight businesses associated with Texans for a Republican Majority (TRMPAC) are accused of illegally donating and using more than $400,000 in corporate money for political purposes. The political action committee has maintained that the "administrative expenses" it paid for with corporate money could include fund-raising, polling, political consultants and phone banks as long as it benefited Republicans in general and not a specific candidate.
The second effort drawing grand jury scrutiny involves $1.9 million in corporate money used by the Texas Association of Business for an ad campaign in the 2002 elections.
The association's effort bombarded 22 House districts and two from the Senate with mail sharply criticizing Democratic candidates while praising Republicans as pro-business and pro-education. The business group argues these were "issue ads" and not advocating for a specific candidate.
Fred Lewis, president of the reform group Campaigns for People, said it is too early in the campaign season to gauge whether corporate money is waning in Texas.
He pointed out that in 2002, most of corporate spending by the Texas Association of Business and Texans for a Republican Majority wasn't discovered until reports were filed after the election.
"It appears people are being much more cautious about corporate money, but it's hard to say if we're going to end up with sham "issue ads" or find that people are hiding corporate money," he said.
"We're just not yet seeing the TV ads, the mailers or out-of-state interests engaging in electioneering when they attack candidates right before the election. These are always to disguise soft money contributions," Mr. Lewis said.
" Associated Republicans of Texas raised $148,000, which it has used to pay the legal costs of congressional redistricting that benefited the GOP last year. Pat Robbins of Associated Republicans said that legal fees are a permissible expenditure and that the group has been involved "in the legislative process of helping Republicans get elected for 30 years."
" Texans for a Republican Majority raised $10,000 and is using the money to cover the legal expenses of defending its members against civil lawsuits arising from the 2002 campaign.
" Stars Over Texas, a committee started by House Speaker Tom Craddick to raise money for supportive House members, took in more than $100,000 in corporate contributions and returned all of them because of the legal questions raised by the grand juries.