August 27, 2007
Corporations dropped from TAB lawsuit

Missed this from Friday.

Almost five years after the Texas Association of Business secretly rounded up $1.7 million from corporations to influence the 2002 elections, a judge ruled Friday that the group and three officials must face a civil suit for possibly violating state election laws, while the companies that gave the money were dismissed from the lawsuit.

At issue is whether the association and its officials -- President Bill Hammond, board member Mike Toomey and staff lobbyist Jack Campbell -- acted as a political committee and are subject to state election laws, which prohibit the spending of corporate money in connection with campaigns.

But state District Judge Joe Hart ruled that the companies, including telecommunications giant AT&T and several insurance companies, were not part of a political action committee. Also, though Hart wrote that the state election law and court decisions on campaign finance are ambiguous, he concluded that the corporate-financed ads did not expressly advocate the election or defeat of any candidate.


Hart's three-page decision is a setback for the Democratic plaintiffs. The ruling effectively removes much of the potential monetary damages from the lawsuit by releasing the corporations as defendants.

Both sides, however, could take something positive from Hart's ruling.

On one hand, Hart said it is a question for a judge or jury to decide whether the business group was acting as a political action committee, a key element of the indictment against the business association pending before state District Judge Mike Lynch.

On the other hand, Hart wrote that he must assume an ad does not expressly advocate the election or defeat of a candidate unless it uses words such as "vote for" or "vote against," an argument that has been a cornerstone of the defense in both criminal cases and civil litigation.

Lynch reached a similar conclusion about express advocacy last year when he dismissed an indictment against the business association. But Earle was successful in securing another indictment against the group, adopting the civil litigation's legal theory that the group violated the law by operating as a political committee that should have disclosed its activities to state election officials.

Austin lawyer Joe Crews, who represents the Democratic candidates, said he was disappointed that the corporations were let out of the lawsuit.

"The law is so scrambled and bad that even a good, bright judge -- presented with compelling facts -- couldn't really find a way to hold the corporations responsible," Crews said.

But Austin lawyer Larry York, who represents Connecticut General Life Insurance Co., disagreed.

Corporations "gave money to be used in an issue ad campaign," he said. "They basically relied on TAB for what was permissible."

Austin lawyer Buck Wood, who has a similar lawsuit against some of the same defendants in front of a different judge, said Hart should have left the corporations in the lawsuit until it was determined at trial whether the business association was acting as a political committee.

"The corporations can't argue that they didn't know what they were doing," Wood said.

Hammond sent copies of the ads to some donors as they were being mailed to voters.

The previous update I had on this story was from last September, when Toomey was added as a defendant. Burka wasn't kidding when he talked about how slow this process has been.

I don't really have anything to add to this, I'm just trying to keep track of it. Maybe we'll get a resolution before everyone involved has retired from politics. Judge Hart's ruling is here (PDF). Be sure also to check out these two sidebars that give a more visual explanation of where we are and what just happened.

Posted by Charles Kuffner on August 27, 2007 to Scandalized!