Money found laundered in the fine print
By RICK CASEY, Houston ChronicleJuly 13, 2005
If I'm John Colyandro, I'm suffering today from a lack of sleep last night.
An Austin judge ruled Tuesday that I will have to stand trial for felony money laundering charges, the kind that could land me in prison for years. He was not persuaded by my lawyers' arguments that it wasn't money laundering because we dealt in checks, not cash.
We're appealing the decision, but it looks like we're going to have to persuade a jury that what we did wasn't money laundering.
What I know that few other people have noticed is that another judge has already found, in a civil case, that in effect, it was money laundering.
Even worse, we can't attack that judge as politically-motivated, the way we've attacked Travis County District Attorney Ronnie Earle.
Why? Because my side handpicked the judge.
Colyandro is the executive director of Tom DeLay's Texans for a Republican Majority Political Action Committee, or TRMPAC. That's the group that raised $600,000 in corporate money in 2002 to help elect a cadre of Republican legislators who would fulfill DeLay's wish for a second round of congressional redistricting.
Smart, conservative judge
Here's the story of how the highly-regarded retired state District Judge Joseph Hart found that money laundering had taken place.
Colyandro, Jim Ellis, a political consultant for TRMPAC and the PAC's treasurer Bill Ceverha were sued by several of the Democrats whom the PAC helped defeat. Colyandro and Ellis were dropped from the suit because they had been indicted based largely on the same set of facts the lawsuit alleged. They couldn't be forced to testify in the civil case until their criminal cases were resolved.
The suit accused Ceverha, acting as TRMPAC treasurer, of using corporate money illegally to influence the elections, but it did not accuse him of money laundering.
Yet the judge, in effect, found that money laundering occurred.
The suit wasn't heard by a jury but by Judge Hart. Under Travis County rules, when a lawsuit is declared to be "complex," both sides can agree to request a particular judge to hear it.
The TRMPAC lawyers asked the plaintiffs if they would agree to Hart, and they did. They knew him to be conservative, but smart and above politics.
Explaining the damage
After several days of testimony, Hart issued a strong order rejecting TRMPAC arguments and ruling that they had broken campaign reporting laws. The money-laundering issue was buried in the calculations of how much Ceverha would have to pay the plaintiffs.
Hart spent four single-spaced pages explaining his calculation of damages, almost as much as he took discussing the ways in which TRMPAC had broken the law.
He noted that the law was unclear on how to calculate the damages. The law provided that each opposing candidate would receive "twice the amount not reported that is required to be reported," Hart wrote.
One reading, he said, would lead to damages of a whopping $59.7 million for the five plaintiffs. But Hart took a much more conservative approach. He ruled that a plaintiff could collect only twice the amount that could be shown to have been spent on his or her campaign.
One of the pieces of evidence admitted during the trial was that TRMPAC had sent a check for $190,000 to a Republican National Committee fund for state legislative races. Two weeks later, the GOP committee issued consecutively-numbered checks totalling exactly $190,000 to Texas candidates supported by TRMPAC.
In calculating damages to two of the plaintiff candidates, Hart included a $35,000 check from the national fund to one opponent and a $20,000 check to another.
It wasn't irrelevant
Republican officials had initially, presumably with straight faces, called the fact that $190,000 came in and $190,000 went out a "coincidence." At trial, TRMPAC lawyers simply argued it was irrelevant. Hart clearly didn't buy either argument.
In other words, he treated it as TRMPAC money. It may have been run through the Republican National Committee in an effort to wash the corporate gloss off, but as far as Judge Hart was concerned, it was still TRMPAC's money and it was still from unreported corporate contributions.
Hart made his ruling based on "a preponderance of the evidence," not on the tougher criminal standard of "beyond a reasonable doubt."
There may be some other technicalities in criminal law. But clearly Hart saw the money as laundered, and that can't be good news for Colyandro and Ellis.
