Key Court Rulings Expected in T.A.B. Case

State District Judge Mike Lynch is expected to rule today (Thursday) on whether there is sufficient evidence to extend a grand-jury investigation into allegations that the Texas Association of Business violated campaign finance laws in its $2 million ad campaign to influence the 2002 elections. The decision follows lengthy courtroom arguments last week centering on Travis Co. prosecutors' efforts to obtain specific records from the business group and to compel T.A.B. President Bill Hammond to appear before a grand jury. Hammond and the T.A.B. have thus far resisted, citing First Amendment grounds.

T.A.B. had been scheduled to present similar free-speech arguments Wednesday in two related civil cases in which the plaintiffs -- four defeated Democrats targeted in the ad campaign -- allege the T.A.B. broke the law in its zeal to bring Republicans into office at the Legislature. District Judge John Dietz postponed a hearing in the case for two weeks, pending Lynch's ruling.

On the criminal side, Lynch is using extreme caution in establishing a record for a case that may continue through the appeals process once it leaves his court. Lynch, a Democrat, warned prosecutors that he had not yet seen compelling evidence to warrant further investigation into the T.A.B. ad campaign. "You can't just start an investigation because you didn't like the results of the election," Lynch said. Of the few options available, Lynch could render a decision giving prosecutors all -- or none -- of what they are seeking, or he could allow the grand-jury investigation to proceed along a much narrower path, with only limited information.

Unless the court rules otherwise, T.A.B. attorney Andy Taylor says the U.S. Constitution protects the group's right to withhold its membership list, the names of corporate donors, and the amounts they contributed to the ad campaign. Taylor has made no secret of T.A.B.'s intention of appealing -- all the way to the U.S. Supreme Court, if necessary -- any decision that doesn't bode well for the business group. By the time the case reaches the Supremes, one popular GOP assumption goes, White House counsel Al Gonzales, a former justice of the Texas high court, will have been appointed by President Bush to deliver the fifth vote in the T.A.B.'s favor.

District Attorney Ronnie Earle initiated the grand-jury investigation in January in response to complaints that the T.A.B. illegally used money from secret corporate donors to pay for a $1.9 million political ad campaign for GOP candidates. Although the ads attacked certain candidates and praised others, T.A.B. maintains the mailers were "issue-oriented" and thus legal because they did not advocate the election or defeat of a candidate. Issue ads are not subject to campaign disclosure laws, but prosecutors and other critics argue that the language and tone of the mailers crossed the line into "express advocacy."

Earle's office has asked Lynch to rule on at least "three or four" T.A.B. mailers that prosecutors believe are really advocacy ads. Campaign finance reformers believe the electoral process is at risk of total corruption if undisclosed corporate dollars are allowed to continue bankrolling political campaigns under the guise of "issue ads."

Investigators also believe that T.A.B. illegally coordinated its campaign efforts with other special-interest groups, including its own political action committee. Prosecutors cite one mailer, for example, that was paid for by the business group but distributed by the political action committee of Texans for a Republican Majority, a group with ties to Texas House Speaker Tom Craddick and U.S. House Majority Leader Tom DeLay.

In testimony last week, public-relations consultant Chuck McDonald explained his role in the ad blitz, saying his company created the mailers specifically for T.A.B., although some were ultimately used by other PACs. Prosecutors also believe the T.A.B. used corporate funds to pay McDonald for some of his work on the political ads, an assertion Taylor shrugs off as nothing more than an accounting error. "If that's all they've got," Taylor said later, "then bring it on," adding that Earle's case is "as weak as a June frost" if a $1,400 payment to McDonald was all the DA had to show for his three-month grand-jury probe.

Outside the courtroom, Taylor has portrayed Earle's investigation as a politically driven attempt to "vilify" the T.A.B. and the Republican leadership in the Legislature. "His sole purpose is political," Taylor said, referring to Earle's statement in court last week questioning whether legislators were casting votes in the interests of taxpayers or the interests of the T.A.B. "His job is to investigate and prosecute crimes," Taylor continued. "His job is not to influence voting behavior."

Then again, T.A.B already appears to have the vote-influencing job sewn up.