Grand jury probes GOP campaign funding

AUSTIN, Texas – A Texas grand jury recently expanded its investigation into allegations that one of Rep. Tom DeLay’s (R-Texas) political action committees and the state’s leading business trade association financed the Republican takeover of the state House with illegal corporate donations.

The investigation began in 2003 when Craig McDonald with Texans for Public Justice filed a complaint charging the Texas Association of Business (TAB) with using corporate donations to finance an advertising blitz on behalf of more than 20 Republican candidates for state House seats. State law prohibits the use of corporate donations for such expenses. As the investigation expanded, the role played by Delay’s Texans for a Republican Majority (TRM) came under scrutiny.

Republicans won nearly all of the races in question, resulting in their takeover of the state House and the election of DeLay’s ally, Tom Craddick, to the post of speaker. Craddick’s leadership and the Republican majority made possible DeLay’s redistricting of Texas’ congressional districts.

The investigation’s expansion resulted from news reported in the New York Times and Austin American Statesman. According to the Statesman, Craddick, while campaigning for speaker, allegedly doled out $175,000 in corporate money raised by TRM to Republican candidates, a possible violation of state law.

“There is a Texas-size cloud over the 2002 speaker’s race, and we need a thorough investigation to clear the air,” said Fred Lewis, president of Campaigns for People, whose group, along with Texas Public Citizen, called on the Travis County grand jury in Austin to expand its investigation to include Craddick’s actions.

“This could be the biggest political scandal (in Texas) since Sharpstown, which led to the indictment of a speaker and major reforms (in the early 1970s),” Tom “Smitty” Smith of Public Citizen said.

The Dallas Morning News also reports that TRM may have laundered corporate money meant for Republican candidates. According to the story, TRM in September 2002 sent $190,000 in corporate donations to the Republican National Committee. Three weeks later, the RNC sent the same amount to seven Republican state House candidates. This suspicious money flip was already being investigated by the grand jury. The Statesman reported that TRM sent a blank check to Jim Ellis, a DeLay operative, who, after consulting with the RNC, filled in $190,000 for the amount of the check.

The investigation began after TAB bragged that the $2 million in corporate donations it raised in 2002 was key to the Republican takeover of the House. The money financed the mailing of millions of last-minute attack ads to voters.

McDonald subsequently filed charges alleging that this action violated state campaign financing laws. Travis County District Attorney Ronnie Earle took these allegations and others involving TRM to the grand jury in 2003. TAB and TRM contend that they violated no laws because there was no direct coordination with Republican candidates.

However, ample information now public suggests otherwise:

• Kevin Brannon served as a consultant in campaigns that benefited from the mailings. He also worked as a consultant to John Colyandro, TRM’s executive director. Colyandro and Bill Hammond, TAB’s executive director, held meetings to discuss the mailing and other strategy.

• Susan Lilly raised money for Republican campaigns now under scrutiny. She worked out of the TRM office and was paid out of the $600,000 that TRM raised from businesses. According to Colyandro, “(Lilly) wasn’t raising money for a candidate. The money eventually went to candidates, but she raised it for Texans for a Republican Majority.”

• TRM, which can legally solicit money from business for administrative expenses, told business donors in a fund-raising pamphlet that their donations would cover more than administrative expenses. The pamphlet states: “unlike other organizations, your corporate contribution will be put to productive use. Rather than just paying for overhead, your support will fund a series of productive and innovative activities designed to increase our level of engagement in the political arena.”

Evidence that has surfaced so far could be just the tip of the iceberg regarding the shady dealings that led to the right-wing takeover of the Texas House. The district attorney recently subpoenaed Craddick’s records to determine if there was any connection between the corporate money that he doled out and his subsequent election as speaker.

The DA is also trying to learn the names of corporate donors to TAB and TRM, which contend that this is confidential information. A district court ruled in favor of the DA, but TAB and TRM are appealing.

The grand jury will have until March 31, its expiration date, to bring charges. If no charges are issued, the next grand jury will likely take up the matter.

The author can be reached at pww@pww.org.