http://www.startribune.com/stories/587/5426119.htmlAUSTIN, TEXAS -- A Texas judge said Thursday that the treasurer of a political fundraising committee formed by U.S. House Majority Leader Tom DeLay, R-Texas, violated the state's election law by failing to report more than $600,000 in contributions from corporations and other donors in 2002.
The civil court ruling is the first to sustain complaints by Democrats that improper acts underpinned a Texas political victory engineered by DeLay and his advisers, which had the effect of cementing Republican control of the House of Representatives.
DeLay was not named in the case and has maintained that he did not play a role in how the group's money was raised and spent, but he has been barraged on Capitol Hill with allegations of unethical conduct.
The decision was a symbolic victory for DeLay's critics, lending credence to accusations that his allies used illegal campaign finance tactics to win a Republican majority in the state for the first time in 130 years. That in turn allowed DeLay's allies in Texas to redraw congressional districts and elect four new Republican lawmakers to Congress in 2004.
State District Judge Joe Hart said the money, much of it corporate contributions, should have been reported to the Texas Ethics Commission.
Under Texas law, corporate money can be used by PACs for administrative purposes, but not for direct campaign expenses. In his ruling, the judge dealt with the election code reporting requirements, not with how the money was spent.
Hart found that contributions of corporate and non-corporate money totaling $613,433 should have been reported by treasurer Bill Ceverha, along with expenditures of $684,507.
Civil damages
The judge ordered Ceverha to pay nearly $200,000 in damages. It will be divided among those who brought the lawsuit against Ceverha -- five Democrats who lost state legislative races in 2002. Ceverha's lawyers argued in court that the PAC operated legally despite confusing campaign funding laws.
The civil case is separate from a criminal investigation being conducted by the district attorney in Austin into whether the PAC funneled illegal corporate contributions to GOP candidates for the state Legislature. Three of DeLay's top fundraisers and eight corporations were indicted last year. Ceverha has not been charged.
Hart's decision focused on the liability of the committee's treasurer and did not mention DeLay, who has denied involvement in any improprieties.
Lawyers for the plaintiffs said the judge's decision provided a foundation for future court rulings adverse to DeLay's committee and those connected to it.
"It sheds light on the illegal acts of Texans for a Republican Majority," said attorney Cris Feldman. "This is only one part of the larger battle."
The lawyers noted in particular that Hart did not accept the two principal defenses claimed by the Texas committee, namely that the election law requiring official disclosure of the contributions was unconstitutional and that the corporate funds were in any event used for purposes that made them both legal and unreportable under the complicated Texas elections law.
Ceverha lawyer Terry Scarborough said the case will be appealed, and he suggested that the Democrats are mostly just angry over losing the elections.
"Our client was exercising his constitutional rights of freedom of speech and freedom of association," Scarborough said in a statement. "These are the most fundamental constitutional rights that we, as citizens, enjoy and cherish."
Legal scholars were skeptical that Ceverha would be able to successfully appeal on First Amendment grounds because of a U.S. Supreme Court decision in 2003 that upheld the legality of banning corporate campaign donations.
But his appeal is only a small part of the legal landscape involving the Texas political committee. Much of the lawsuit has been postponed pending the outcome of the criminal trial in Austin, and at least two other civil cases involving campaign finance law and the political action committee that are underway.
In addition to the inquiries into campaign finance violations in Texas, DeLay is preparing to be investigated by Congress for possible ethics violations involving overseas trips arranged by lobbyists. His supporters, arguing that the congressman is the victim of a partisan witch hunt, say Democrats are acting out of desperation after watching DeLay's political successes.