The Republican Party of Texas agreed yesterday to stop using corporate donations for political purposes, settling a case involving the 2002 state elections that has parallels to a long-running investigation that led to the indictment of former House majority leader Tom DeLay (R-Tex.).

The agreement between the party and Travis County attorney David Escamilla stemmed from his allegation that the state GOP's use of $98,800 in corporate funds "may have violated the Texas election code" because those funds were spent on voter registration mailers, a political consultant and get-out-the-vote efforts.

In signing the pact, the party promised not to keep spending corporate funds for these purposes. In exchange, it avoided prosecution for election law violations, unlike DeLay, whose lawyers contend that state law allows such uses of corporate funds or is unconstitutionally vague.

Texas is one of 18 states that bar the expenditure of corporate funds for "election purposes," the key phrase at issue. But millions of dollars in corporate funds were used to help the GOP capture the state legislature in 2002 for the first time in more than a century, including donations funneled through the party, a business group and a political action committee organized by DeLay, Texans for a Republican Majority.

The next year, the state legislature adopted a new congressional redistricting map supported by DeLay, which ultimately resulted in the election in 2004 of more Texas Republicans to Congress.

Some of these funds that passed through the state GOP sparked a complaint by Public Citizen and Common Cause Texas to Escamilla's office, which prosecutes misdemeanors. Related complaints involving DeLay and his committee have been addressed by county District Attorney Ronnie Earle, who has the authority to seek felony indictments.

In the settlement, the Republican Party acknowledged using corporate money in three instances in 2002. But in a statement Thursday, the party said it has "voluntarily cooperated fully" with Escamilla's office and believed the party's practices "were appropriate, ethical and could withstand the scrutiny of an investigation."

The watchdog groups pointed, however, to wording in the agreement in which the party said specifically that it would cease using corporate funds for political consultants, voter registration activities and issue advertising related to any state or local candidate. The party also agreed to file campaign finance reports electronically with the Texas Ethics Commission and to train key party officials on how to comply with federal and state election regulations and reporting.

"There's no longer any doubt that certain Republican Party of Texas corporate expenditures were wrong and will no longer be done," said Tom Smith, director of the Texas office of Public Citizen. "It sets precedence for the Republican Party . . . and ensures politics in Texas gets cleaner."

The pact is binding on the Texas GOP through March 2007, meaning the party's campaign spending and reporting will be under the county attorney's scrutiny through the 2006 election cycle and the final campaign finance reporting deadline.

Earle's investigation led to charges against DeLay and three associates, also for allegedly using corporate funds in violation of Texas law in the 2002 state legislative races. DeLay faces money-laundering and conspiracy charges in that case.