Ruling for the Machine


Corporations, because of their vast treasuries and narrow interests, must not be allowed to unduly influence elections. Legislators made it state and federal law almost a century ago. An average citizen cannot compete with corporate cash. It’s also an affront to stockholders to allow executives to spend shareholder money on partisan politics. The corporate prohibitions are the legacy of the populists. They saw the robber barons corrupt the system. Reform led to the passage of legal safeguards. Now, those safeguards are under attack by the Texas Supreme Court.

Although Texas statute bans giving corporate money to political candidates, it allows corporations, trade associations, and labor unions to create political action committees for themselves. In such cases, they can use corporate money for administrative expenses and hard money for individual voluntary political contributions. “That’s how labor unions and corporations can legitimately have a voice in the process,†explains Craig Holman of the Washington, D.C.-based Public Citizen. “It never means that they can just dole out corporate money to any other PAC.â€

It does in Texas. The most notorious example of corporate money raised by a PAC not affiliated with a corporation is Texans for a Republican Majority. TRMPAC spent $600,000 in corporate money in 2002. On September 21, a Travis County grand jury handed down 32 indictments as part of an ongoing investigation into TRMPAC’s actions. Meanwhile, civil suits against TRMPAC and the Texas Association of Business are exposing a GOP machine that fed at least $2.5 million of corporate money into the 2002 Texas elections. (Even the Democratic House PAC accepted a small amount of corporate cash in 2004.)

On October 20, on behalf of two Democratic state House candidates, one of the key lawyers in the civil suits, Crist Feldman, filed for a restraining order against a PAC called the Associated Republicans of Texas. ART has raised $150,000 in corporate contributions this year. Thanks to new reporting requirements mandated by 2003 ethics legislation, ART’s corporate money activities are available for the first time at the Texas Ethics Commission. “In October, it became apparent that ART was operating in an illegal manner and that they were going to continue to do so,†says Feldman.

District Judge Paul Davis agreed. The judge froze ART’s ability to solicit, accept, or expend corporate cash pending a hearing set for the day after the November 2 election. ART’s lawyer told the Austin American-Statesman that the group would win future rounds. Less than a week later, the all-Republican Texas Supreme Court obliged. Justice Nathan Hecht wrote the main opinion overturning the temporary restraining order. Since 1993, Hecht has received $6,056 in campaign contributions from ART. Two other justices have also received ART funds.

In his opinion, Hecht questioned whether ART’s conduct was illegal, writing, “the issues are far from clear.†The justice also worried about ART’s rights, an area explored more by Justice Dale Wainwright in a concurring opinion. Wainwright defended ART’s First Amendment rights, essentially making the case that corporate money equals speech. Jim Ellis, Tom DeLay’s right-hand man who was indicted by the grand jury for money laundering, filed a brief on behalf of ART. It appeared clearly aimed at pre-empting the TRMPAC civil suits that have yet to come to trial.

With the Texas Supreme Court as an obstacle, hope for removing the corrosive effects of corporate money in Texas politics increasingly depends on Travis County District Attorney Ronnie Earle and whatever pressure can be exerted on the 79th Legislature to enact stronger reforms. —JB