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Plea Agreement Shows Impact of Corporate Contributions in TexasElection

Nov. 17, 2005

Plea Agreement Shows Impact of Corporate Contributions in TexasElection

Largest Chunk of $10 Million Corporate Takeover of TexasHouse Came Through Republican Party of Texas

AUSTIN, Texas – Government watchdog groups lauded the efforts of Travis County Attorney David Escamilla, who today signed a deferred prosecution agreement with the Republican Party of Texas following investigations into how corporate money was used during the 2002 elections.

The groups praised the agreement as a positive step in uncovering widespread misuse of corporate money in Texas’ 2002 elections. County Attorney Escamilla’s investigation is only one element of a number of ongoing civil and criminal investigations into what appears to have been a coordinated strategy among Republican-affiliated groups to funnel millions of dollars of corporate money into political activities that are clearly prohibited under Texas campaign laws.

“Illegal corporate contributions and expenditures for anything other than administrative costs have been banned in Texas elections for more than 100 years,” said Tom “Smitty” Smith, director of Public Citizen’s Texas office. “Today’s agreement shows that the Republican Party admits to playing a major role in the $10 million corporate takeover of our state house and that it agrees to not continue this behavior or face criminal prosecution. Mr. Escamillia has clarified on paper the stipulations, and the Republican Party agreed to the terms.”

After learning that much of the money had been spent on consultants, media and advertising, voter registrations, get out the vote efforts, and voter identification, Public Citizen and Common Cause in 2004 urged the County Attorney’s Office to look into how more than $5.7 million in corporate money was spent by the Republican Party of Texas during the 2002 elections.

Documents from 2002 also show that the Texas Association of Business (TAB) spent $1.9 million in corporate money in the election, Texas for a Republican Majority (TRMPAC) spent $600,000, and the Law Enforcement Association of America (LEAA) spent $2 million, totaling nearly $10 million in corporate expenditures.

“Today’s agreement involved the largest known single chunk of corporate money used to fund the takeover of Texas’ elections,” said Craig McDonald of Texans for Public Justice. “The agreement is, in essence, an admission that the Republican Party broke the rules in 2002 and a pledge that from now on they will follow the law. No longer will they use corporate money to pay for get-out-the-vote efforts, run television ads or pay for their political consultants. ”

In the agreement laid out today, the Republican Party of Texas agrees that between now and March 31, 2007, it will refrain from these types of expenditures or face criminal prosecution for its activities in 2002.

“Documents show that there was a concerted, unprecedented, use of money by the Republican Party during this election. By using various bank accounts, they were able to disguise the flow of dough from the state to the national party, and then back again,” said Suzy Woodford of Common Cause. “Their own filings with the ethics commission show that they collected more than $5.7 million for the 2002 elections and may have used $2.2 million of that illegally. They took that money and rerouted it nationally in such a way that it is nearly impossible to track.”

The deferred prosecution arrangement is another step in the investigations of illegal contributions in what could be as many as 73 criminal indictments for activities related to the 2002 races in Texas. Filings with the Texas Ethics Commission show that prior to 2002, less than $2 million total had been spent in the 2000 election and less than $1 million in the 1998 state elections.

The Republican Party of Texas spent 10 times as much on its administrative costs as its opponents. The data show a dramatic increase in the receipt of corporate funds by the Republican Party of Texas, increasing by more than three times in just two years. These contributions were not used for only rent and utilities but were being spent on campaign-related activities.

“What’s very, very clear is that our elections in Texas were clouded by the smoke coming from the secret money trail,” said Smith. “Texans have had enough with the secrecy and misgivings associated with elections in Texas, and now we have to use the law to hold folks accountable. In the time ahead, we must all work to strengthen the laws that were established to allow voters to make a fair and conscionable decision come ballot time.”

Records show that it took more than two and a half years for investigators to obtain all of the documents and files needed to build their case. Prosecutors explained that there was also much difficulty in following each dollar from the first deposit because there were several bank accounts associated with the election and the parties involved, and because transparent accounting and recordkeeping did not happen and the funds were not reported electronically.

“If corporations reported their income and expenses as poorly as the Republican Party of Texas, they would never pass an audit,” Woodford said. “Although their accounting was incomprehensible, the law was clear. This was one big money laundering machine that kept spinning money from one side to the other. After they reviewed all 27,000 documents they were able to obtain, we are confident that the County Attorney’s office made a sound decision today. We hope that in the future, political parties abide by the law and work to ensure candidates are elected by the people, not the corporations who can give the biggest chunk of their shareholders money.”