Corporations cooperate in finance probe

AUSTIN, Texas — Just before the New Year, Sears, Roebuck and Co. agreed to cooperate in the investigation of illegal corporate campaign funding of Republican candidates running for the Texas House of Representatives in 2002. As a result, Travis County District Attorney Ronnie Earle, who is conducting the investigation, agreed to reduce the felony charges against the company to misdemeanors.

Sears is one of eight corporations the grand jury indicted last summer for making illegal campaign contributions. Sears gave $25,000 to Texans for Republican Majority, one of U.S. House Majority Leader Tom DeLay’s political action committees. The indictment alleges that TRMPAC then used the money illegally to help Republicans win seats in the state Legislature.

Earle has indicted three Republican operatives with close ties to DeLay for their role in soliciting and laundering these donations. The information Sears provides will buttress Earle’s case against the three and it’s possible more indictments are coming, including against Texas House Speaker Tom Craddick and DeLay himself.

Sears is the second corporation to agree to cooperate with the investigation. Last month Diversified Collections Services of San Leandro, Calif., which gave TRMPAC $50,000, made a similar deal. Representatives of both companies will provide details about TRMPAC’s effort to solicit illegal campaign contributions from corporations. Texas law prohibits corporations and unions from making direct campaign contributions.

Earle’s investigation began in 2003 as a result of a complaint by Craig McDonald of Texans for Public Justice. In August 2004, a grand jury returned indictments against John Colyandro, Warren Robold, and Jim Ellis. The three were charged with soliciting illegal campaign contributions, and Colyandro and Ellis with laundering them too. Colyandro was the executive director of TRMPAC in 2002. Robold was a professional campaign fundraiser. Prior to 2002, he worked for the national counterpart to TRMPAC, Americans for a Republican Majority, which was established by DeLay to help Republicans maintain control of Congress. Ellis was for a time on DeLay’s staff.

DeLay had the most to gain from Republican victories made possible by the corporate donations. The victories gave Republicans control of the Texas House, which made it possible to change the state’s congressional districts. As a result, Texas sent five new Republicans to Congress, strengthening DeLay’s power in Congress.

In December, U.S. House Republicans passed new party rules that would allow DeLay to keep his post as majority leader if he is indicted. But when Congress convened in January, the Republican caucus staged a mini-rebellion and rescinded rules designed to protect him if he is indicted.

In an editorial, the Houston Chronicle, which supported DeLay’s Democratic opponent last year, offered another assessment of the situation. According to the Chronicle, DeLay, who maintains strict party discipline within the House and rarely tolerates dissent, simply no longer fears indictment.

There may be good reason for his smugness. Earle will have a difficult time proving that the corporate donations were illegally channeled directly to campaigns. The state law upon which Earle is basing his charges was written long before there were political action committees heavily involved in elections. The defense could argue that none of those indicted were political candidates and, therefore, did nothing wrong in accepting the corporate money.

Earle has rightly identified the flood of corporate money that fueled the Republican takeover of the state government as a threat to democracy itself. Whether he will be successful in staunching this threat is another matter.