AUSTIN, March 3 -- A civil trial focusing on the fundraising activities of a political action committee set up by House Majority Leader Tom DeLay (R-Tex.) turned Thursday to one of the major allegations: that the PAC laundered money in its quest to elect Republicans to the state legislature in 2002.
At issue is $190,000 in corporate donations that the director of Texans for a Republican Majority sent to the Republican National State Elections Committee in mid-September 2002. Three weeks later, the committee sent checks in the equivalent amount that had been raised from individual donors to seven Republican statehouse candidates supported by TRMPAC. Texas law prohibits the use of corporate funds in election campaigns.
 
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Charles R. Spies, the election law counsel for the Republican National Committee, testified that the practice of "trading money" between the RNC and state political committees was common through the end of 2002, when it was outlawed under federal campaign finance reform. Until then, he said, corporate dollars raised in states that outlaw such campaign contributions could be sent to the RNC, which would then send back donations raised from individuals -- but rarely on a one-to-one ratio.
"It's much harder to raise, so it's worth more," he said of individual donations.
Spies also said that decisions on which local candidates to support were made by the RNC's political division. He said he did not know which, if any, discussions occurred between TRMPAC and national Republican officials regarding the checks issued to the candidates for the Texas state legislature.
But if there had been discussion, Spies added, "So what? There's nothing wrong with that. . . . The money came in perfectly legally. The money was deposited perfectly legally and several weeks later, the money was disbursed legally. That is absolutely legal."
However, two people involved in that transaction have been indicted on felony charges of money laundering. The director of TRMPAC, John Colyandro, and Jim Ellis, the director of DeLay's national PAC, Americans for a Republican Majority, were indicted by a Travis County grand jury in Austin for allegedly laundering the $190,000 donation in violation of the Texas election code.
The indictments allege that six illegal corporate donations totaling $190,000 were made to TRMPAC, which Colyandro then sent in one lump sum to the Republican National State Elections Committee. According to the indictments, Ellis delivered the check to the RNC and gave the committee a list of names and the check amounts, totaling $190,000, to be mailed back to the Texas legislative candidates in noncorporate money. The criminal cases against Colyandro, Ellis, fundraiser Warren RoBold and five corporations are proceeding in Travis County District Court.
The civil case, in its fourth day, was brought against TRMPAC treasurer Bill Ceverha by five Democrats who lost legislative elections to Republicans in 2002 and say corporate money was used illegally to influence their races. They also sued Colyandro and Ellis, but the civil cases against them have been postponed pending the outcome of their criminal cases.
Ceverha's lawyer, Terry Scarborough, said that Spies's testimony disputed any allegations of money laundering because the donations that went to the RNC and were returned to Texas were legal. "I think he made it clear those indictments won't stand," Scarborough said.
