A criminal complaint has been filed against the state GOP related to corporate donations from 2002.
The criminal complaint was filed by two government watchdog groups, Public Citizen and Common Cause of Texas, in response to a Houston Chronicle article, published earlier this week, recounting how the Texas GOP handled $2.2 million in corporate contributions.
A lawyer for the Texas GOP on Friday denied any wrongdoing and said the investigation is the work of vengeful Democrats.
Texas law prohibits political parties from spending corporate or labor union funds for any purpose other than running a party primary, paying for a convention or administrative expenses. The law also requires those funds to be spent through a separate, restricted account, which can also include money from other sources.
According to records reviewed by the Chronicle, the Texas Republican Party transferred its corporate contributions to a federal committee that the party operates and designated all general election expenses as administrative. In two instances, the GOP defined $1.9 million in television advertisements and $453,815 in direct mail as administrative costs.
"We're going to look into it. We'll review it and determine what we need to do," Escamilla said.
"The (Republican) party claims to have spent an enormous sum on administrative costs in the 2002 elections, but when you look at their expense reports, you see payments for voter drives, list acquisition, political consultants and television ads affecting state candidates," said Tom "Smitty" Smith, director of the Texas office of Public Citizen.
"Since 1905, Texas law has prohibited corporations from contributing to campaigns within the state. Our forefathers had learned that the contributions from corporations would be paid back in policy. As the saying goes, `You dance with them that brung ya,' " Smith said.
All told, the Texas Republican Party ran $5.7 million through its restricted corporate campaign account in 2002. The total included money raised directly from corporations and funds from national party committees that raise money from corporations and individual donors.
Most of that money ended up in the state party's federal account, the Texas Republican Congressional Campaign Committee.
Federal law in 2002 was less restrictive than state law on how political parties could spend corporate and labor union money.
Wayne Hamilton, former executive director of the state GOP and now an adviser to the party, told the Chronicle that state law didn't apply to the party's 2002 coordinated campaign because the GOP was raising and spending money to build party support and voter turnout for federal and state candidates.
Hamilton said the spending was done through the party's federal committee in compliance with the federal law then on the books.
But the executive director of the Texas Ethics Commission, Karen Lundquist, said spending to affect Texas elections would be governed by state law and its restrictions on corporate money.
The misdemeanor complaint is an echo of a yearlong investigation by Travis District Attorney Ronnie Earle into how the Texas Association of Business and the Texans for a Republican Majority Political Action Committee spent corporate money in the 2002 elections.
Sources familiar with that investigation said Jim Ellis, a consultant to U.S. House Majority Leader Tom DeLay, was declining to testify before the grand jury, invoking the Fifth Amendment, which protects against self-incrimination. The lawyer for Ellis on Friday denied that his client is refusing to testify about his role with the Republican PAC.
San Antonio lawyer J.D. Pauerstein said he has been negotiating with prosecutor Gregg Cox on whether Ellis would testify. "I've discussed with Cox what he's interested in and what we can talk about," Pauerstein said. "But nothing has happened."
Cox declined to comment.
Rene Diaz, general counsel to the state Republican Party, denounced the complaint as "nothing more than an extension of the partisan smear campaign by Texas Democrats."
Mr. Diaz said that the Republican Party complied with all election laws and that the citizens groups have "little, if any, understanding" of the "exceedingly complex state and federal regulations."
"Democrats – and their liberal, special interest front groups – are still furious at the people of Texas for rejecting their party at the ballot box, and they are now viciously attempting to hang Republicans in the media," Mr. Diaz said.