OK, let’s cut through the BS. As a campaign manager/consultant for over 80 political campaigns in Texas I should know just what is “administrative” and what is “political” when you talk about expenses. If someone came to me and said, we are going to take over and pay for some of your campaign expenses. Like polling, opposition research, mailings, fundraising, etc I would have said great. That is more money for me to put into advertising. Like on radio or TV. Thanks a lot and how are you going to pay for all these services? And if they said don’t worry were are going to use corporate funds I would have said, “No way” that is an illegal campaign expenditure in Texas”.

That is not what the boys at TRMPAC said. They raised $200,000 more in corporate donations over what it spent on its declared administrative expenses. Those administrative expenses(they said) include paying for phone banks, polling and fundraising.

That is not an “administrative expense” in any stretch of the imagination. Phone banks, polling and fundraising are political expenses that all normal campaigns in Texas have to pay for with personal not corporate money. Sure it is a real advantage to a campaign to have those paid by someone else, but in my opinion it is illegal.

So let’s watch the trial and see how they get around saying that phone banks, polling etc are “administrative”.

Here is the Houston Chronicle story on this case:

“By R.G. RATCLIFFE Copyright 2005 Houston Chronicle Austin Bureau

AUSTIN – To get a conviction against U.S. Rep. Tom DeLay and two associates, Travis County prosecutors will have to prove the men knowingly raised or converted corporate cash with the intent of getting around the state’s ban on using such money in campaigns for elective office.

DeLay’s top lawyer, Dick DeGuerin of Houston, said prosecutors lack the evidence to prove any such scheme occurred.

The road map for what prosecutors will need to prove to get a conviction in DeLay’s case was clearly spelled out in a ruling last week by Senior District Judge Pat Priest.

Priest upheld charges of money laundering and conspiracy to commit money laundering against DeLay, Jim Ellis and John Colyandro by describing how financial exchanges between political committees can constitute money laundering under Texas law.

Priest said money laundering would have occurred if swaps were done to get around the state’s ban on corporate funds being used. But he also said Travis County District Attorney Ronnie Earle will have to show the men violated the law by acting with “express intent;” in other words, knowingly and intentionally doing it.

The case against DeLay, Ellis and Colyandro essentially is an alleged campaign finance violation focused on a state law that prohibits corporate money from being used in campaigns for elective office.

Corporate money can be legally raised by a political committee to pay for administrative expenses.

Republican lawyers have argued the definition of administrative expenses is vague, while Earle has said it is clearly meant to cover only rent and utility bills.

The DeLay-founded Texans for a Republican Majority, TRMPAC, in 2002 raised about $600,000 in corporate money in an effort to help the GOP win control of the Texas House.

Colyandro and Ellis, relying on legal advice, defined TRMPAC administrative expenses broadly to include polling, telephone banks and fundraising for candidates. DeLay was on the board of advisers and helped with raising some of the corporate money.

The money-laundering case focuses on whether TRMPAC sent $190,000 in corporate money to the Republican National Committee, which then gave $190,000 raised from individuals to seven GOP state House candidates.

DeGuerin’s defense for DeLay rests on the idea that the corporate money was raised legally; it could legally be donated to the RNC; there was no swap of funds with the RNC; and any similarity in the amounts of money involved were pure coincidence.

Because Earle declined to discuss the case, the Houston Chronicle asked for an analysis of the points in Priest’s ruling by Cris Feldman, a lawyer who won a civil lawsuit earlier this year against TRMPAC treasurer Bill Ceverha.

How can Earle prove point?

Priest’s order upholding the indictment said money laundering can be proven two ways:

Point one: If the corporate money was raised “with the express intent of converting those funds to the use of individual candidates.”

DeGuerin said there is no way for Earle to prove this point.

“Nobody has said that was the purpose of taking the money, either (the people) soliciting the money or the corporations contributing the money,” said DeGuerin.

DeGuerin said TRMPAC, to comply with Texas law, kept separate bank accounts for corporate donations and money from individuals.

Feldman said TRMPAC’s mission statement to elect a Republican majority to the Texas House and other pieces of evidence he submitted at the civil trial showed committee officials planned from the time the PAC was formed in 2001 to use the corporate money for political purposes.

A TRMPAC appeal to corporate donors indicated committee officials planned to use the money for more than just paying rent or utility bills.

“Unlike other organizations, your corporate contribution to TRMPAC will be put to productive use,” the document said. “Rather than just paying for overhead, your support will fund a series of productive and innovative activities designed to increase our engagement in the political arena.”

Feldman said one consultant was paid with corporate money to solicit political donations directly for candidates.

He said another consultant was paid with corporate money to directly advise House candidates on how to run their races.

Those expenditures likely would be considered as in-kind donations to the campaigns under Texas election law, Feldman said.

A consultant who was hired solely to raise corporate money in May 2002 wrote a solicitation letter to potential donors that said: “TRMPAC is focused on raising and giving funds directly to Republican candidates for state House, state Senate and potentially all statewide offices.”

TRMPAC raised $200,000 more in corporate donations than it spent on its declared administrative expenses. Those administrative expenses include paying for phone banks, polling and fundraising that Earle has said he does not believe were expenditures that could be paid for with corporate money.

Surplus debate

Colyandro testified in a deposition for the civil lawsuit that TRMPAC paid no rent for office space and the only utility paid for was telephone service.

DeGuerin said corporate money was spent on legitimate administrative expenses.

DeGuerin said TRMPAC officials realized they had $190,000 in corporate donations they were not going to be able to use so they donated that to the RNC’s state elections committee, or RNSEC, for it to use in other states where corporate money is legal.

Feldman questioned the idea that the money was surplus. He noted that a month after the money was sent to the RNC, a TRMPAC consultant was still trying to raise corporate money.

“We still need $125,000 of Corporate funds to finish the project and pay our obligations. The House is looking good. But we take nothing for granted,” said an e-mail by Warren RoBold, who has been indicted on charges of illegally accepting corporate money for TRMPAC.

Point Two: Even if the money was legally raised and then the defendants “entered into an agreement to convert the monies already on hand” for use by candidates in a swap with the RNC, “then (prosecutors) will have established that money was laundered.”

The indictment alleges that Ellis gave a $190,000 check to then-RNC Deputy Director Terry Nelson along with a list of candidates who should receive donations “in exchange” for the money.

“I don’t think there was an agreement,” DeGuerin said. “State committees on both sides of the aisle send money to the national committees. The national committees then have the responsibility of keeping the money they get separate, corporate money and individual money.”

Prosecutors have admitted in court that they do not have a copy of the list Ellis supposedly gave Nelson. Nelson, who testified to the grand jury, has referred questions to the RNC, which has declined comment. DeGuerin said even if someone from TRMPAC suggested to Nelson the names of Texans worthy of RNC support, it would not prove money laundering occurred.

“RNSEC doesn’t know for sure who needs the money or who is a viable candidate, so they’re going to get their list from somewhere, they’re going to get suggestions from somewhere,” DeGuerin said. “But as far as a list given to Nelson, apparently it doesn’t exist.”

Feldman said TRMPAC e-mails show Colyandro had a check cut for Ellis on the same day Ellis was meeting with an RNC official about the donation. He said the RNSEC checks to the seven Texas candidates totaling $190,000 were printed on Oct. 4, 2002, and were in sequential order.”