Former Bush adviser says GOP political action committee broke laws
BY Laylan Copelin, Austin American-StatesmanMarch 1, 2005
A former chairman of the Federal Election Commission with deep Republican roots testified today that Texans for a Republican Majority violated state election laws by failing to report the corporate money it spent during the 2002 elections.
Five Democratic candidates who lost that year are suing Bill Ceverha, the political action committee's treasurer, accusing him of illegally using corporate money for political activity and then failing to report it.
Trevor Potter, a Washington lawyer with ties to former President George H.W. Bush and Sen. John McCain, R-Ariz., appeared on behalf of the Democratic candidates.
Potter testified that Ceverha should have reported the corporate money it spent on the 2002 elections and disputed whether the state election laws are unconstitutional because they are vague.
He also said the political action committee's $190,000 contribution to the Republican National Committee raised questions about whether the corporate money was laundered into noncorporate donations for Texas candidates.
Lawyers for Ceverha are expected to counter this week with their own campaign finance expert.
In 2002, Texans for a Republican Majority spent about $1.5 million, including almost $600,000 in corporate money, to help Republicans take over the Legislature.
Allegations that the committee, along with the Texas Association of Business, illegally used corporate money in the state's legislative campaigns has spawned a criminal investigation and several lawsuits, including the one against Ceverha.
State law bars spending corporate or union money on political activity, but it does allow a political committee to spend it to establish the committee and administer its operations.
Texans for a Republican Majority spent its corporate money on consultants, pollsters, phone banks and fund-raisers. Potter testified that corporate money should not have been used for those efforts.
In another instance, the political committee contributed $190,000 in corporate money to the Republican National Committee which, in turn, contributed the same amount in noncorporate money to seven Texas GOP candidates.
"It raises the obvious question whether this was money laundering," Potter said.
He added that there is no way the $190,000 could be construed as part of the committee's overhead.
"The $190,000 was a political contribution and expenditure by TRMPAC and should have been reported," Potter said.
He also testified that Ceverha, who has tried to distance himself from the committee's day-to-day activities, is legally responsible for how the committee handled its money and was responsible for filing its reports with the Texas Ethics Commission.
Potter said he was surprised to hear Ceverha testify that he did not review the campaign finance reports created by the group's accountant.
Under cross-examination, Potter agreed that under state law, Ceverha could not have accepted a contribution because he was not a candidate or a political action committee.
That point might be important because the Democrats sued Ceverha both in his official capacity as treasurer and as an individual.
Also, Potter said the law is not vague because "people know they are giving to a PAC that they are giving money for a political purpose."
Ceverha's lawyers also have argued that the committee did not have to report corporate money that did not expressly advocate the election or defeat of a candidate.
Potter disagreed: "Express advocacy is not relevant for PACs because PACs exist to affect elections."
On broader topics, Potter said the federal government and many states forbid corporate money from being spent in campaigns because it gives businesses an unfair advantage over voters and could encourage corruption.
"Corporations might be giving money to get a bill passed, to have favor with an office-holder or to get an advantage over their competitors," Potter said.
Potter got his political start in the mid-1980s advising then-Vice President Bush on his run for president. His job was to keep Bush in compliance with federal election laws.
Later, Potter served as deputy general counsel to the Bush-Quayle campaign, then in 1991, the elder Bush tapped him to serve on the Federal Election Commission.
He advised McCain during his failed primary run against George W. Bush in 2000.
Potter is back in private practice representing mostly Republican clients and corporations.
