Ruling Targets DeLay Fundraising ArmJudge says a Texas PAC broke the law by failing to report campaigns' use of corporate money.
By Scott Gold, Times Staff Writer
May 27, 2005
AUSTIN, Texas — A fundraising operation founded by House Majority Leader Tom DeLay broke the law when its treasurer failed to report more than $500,000 in corporate money funneled into Texas campaigns during the pivotal 2002 elections, a judge ruled Thursday.
Texas District Judge Joseph Hart determined that the treasurer, Bill Ceverha, must pay five Democratic candidates who lost their elections a combined $196,660 in damages.
The ruling marks the first time — amid a flood of lawsuits and criminal investigations surrounding the Republican Party's rapid rise to power in Texas — that a piece of the GOP's aggressive fundraising operation has been found illegal.
"It won't be the last," said Craig McDonald, director of Texans for Public Justice, a nonpartisan group that fights the influence of money in politics. He said the ruling showed that Republican activists "blatantly violated Texas law," which banned corporate contributions to legislative candidates.
Hart's decision, which came in a lawsuit brought by the Democratic candidates, added to the pressure on DeLay, under siege for ethics problems and questions about his relationships with lobbyists.
But Bobby Burchfield, DeLay's attorney in Washington, dismissed the lawsuit as part of a left-wing "jihad" against DeLay. DeLay was not a defendant in the suit, and Burchfield noted that his name was nowhere to be found in the judge's decision.
"It is outlandish to suggest that this decision could implicate him," Burchfield said.
Ceverha's attorney, Terry Scarborough, said his client would appeal. He said Ceverha was "exercising his constitutional rights of freedom of speech and freedom of association."
Ceverha, a prominent GOP consultant and one of President Bush's top fundraisers, is treasurer of Texans for a Republican Majority, a political action committee founded by DeLay in 2001. The group is an arm of DeLay's Americans for a Republican Majority, which assists in the election of conservative politicians.
Reverberations from the 2002 election cycle in Texas hit Congress two years later.
Republicans, long the minority here, took control of both houses of the Legislature in 2002 — they already held the governorship. At DeLay's urging, lawmakers seized upon their victories to redraw congressional districts. Last year, the new maps gave the GOP a net gain of six seats in the Texas congressional delegation — helping to cement the party's control of Congress.
Democrats have alleged a "civil conspiracy" ever since — an allegation that Republicans have derided as sour grapes — largely because the GOP committee took the unusual step of soliciting corporate money during the election cycle.
The law restricting corporate money in Texas elections is murky. A key issue in the lawsuit was a provision that allowed political committees to spend corporate money on "administrative expenses."
The Texas Ethics Commission has said the phrase covers items such as rent, electric bills and office supplies. Republican lawyers have argued that the phrase could cover a broader range of political activity, including direct-mail campaigns, polling and staff salaries.
Hart ruled that the Republicans' definition of administrative expenses was too loose. He determined that $532,233 in corporate money raised during the 2002 elections was "not in fact to 'finance … administration' " but was "used in connection with a campaign." Therefore, he said, the money should have been reported.
Hart acknowledged the law's shortcomings, pointing out that under one possible interpretation, Ceverha could have been ordered to pay $59 million in damages. That, the judge said, would have meant "an exorbitant windfall for plaintiffs."
Hart did not rule on other allegations in the lawsuit, including claims of a "conspiracy" to subvert the 2002 elections. Hart had determined previously that those claims could not be resolved until criminal charges brought against DeLay associates had been resolved. In the related criminal investigation, three Republican activists with ties to DeLay have been indicted and charged with money laundering and unlawfully soliciting corporate contributions.
The importance of the judge's decision lies in its implicit rejection of Ceverha's argument that the Texas law regulating corporate money is unconstitutional because it limits free speech, said Cris Feldman, an attorney for the Democrats who brought the lawsuit. That argument represents the foundation of the GOP's defense in both the civil and criminal actions.
Travis County Dist. Atty. Ronnie Earle, who is leading the criminal investigation, said that Hart's ruling "reaffirms the importance of full disclosure to our democratic society." He declined further comment. Earle has pointedly declined to rule out bringing criminal charges against DeLay.
"Many of these elements are parallel," said Harvey Kronberg, a political analyst in Austin and the editor of a Web-based publication called the Quorum Report.
"We are all waiting for a signal from Earle."
A Democrat, Earle has denied charges of excessive partisanship but did not help stake a claim to independence when he spoke at a Democratic fundraiser this month and called DeLay a bully.
Burchfield cautioned against reading too much into the judge's decision, particularly when it came to DeLay. He said the judge's ruling was limited to a narrow debate about "ambiguous and, frankly, arcane issues." DeLay has long said that he was merely a figurehead for the political action committee, appearing at fundraisers but falling short of controlling day-to-day operations.
"As always, hidden in the repackaging of this old news is the fact that Tom DeLay is not responsible" for the fundraising arm of Texans for a Republican Majority, said Rep. Jack Kingston (R-Ga.), vice chairman of the House Republican Conference. "He did not direct it, manage it or have control of it in any way."
To some degree, that doesn't matter, said Cal Jillson, a nonpartisan professor of political science at Southern Methodist University.
The response to the judge's decision was quick and furious. One watchdog group called for an independent counsel to investigate DeLay. Others speculated that the House ethics committee — which has rebuked DeLay three times — might turn again to questions about his role in the Texas fundraising operation.
Even if DeLay is not a defendant, the response to the ruling made it clear that it would "embolden those who are baying at his heels in Washington," Jillson said.
"These are DeLay's organizations," he said. "It is not possible from a political perspective — even if it is from a legal perspective — to separate DeLay from this."
Richard Simon contributed to this report from Washington.