So What – Now?

Attorney Terry Scarborough confers with defense witness Jim Bopp, an Indiana lawyer who specializes in campaign finance laws. (Photo By Jana Birchum)

As one of the defense attorneys in a campaign finance trial noted in his closing argument last week, the outcome of the long-running dispute over corporate money and Texas politics could spawn a whole new growth industry for law firms from here to Washington, D.C. The irony of that comment was not lost on the half-dozen lawyers seated in the spectator gallery who, even as silent observers, were already on the clock. Among the most expensive (though hardly silent) trial watchers was prominent state Republican consigliere Andy Taylor, who, during a midmorning break last Thursday, summoned reporters mingling outside the courtroom to announce that seven of the state's wealthiest political donors had retained his services to lobby for "clarity" in the state's 100-year-old-plus election laws (see "Taylor's TRMPAC Thunder").

With the high-profile trial wrapped up and the courthouse emptied of political reporters, lawyers on both sides have resigned themselves to an anticipated two- to six-week wait for State District Court Judge Joe Hart to render a decision in the civil case that took attorneys two years to build and five days to argue. No matter how Hart rules, the trial court is undoubtedly just the starting point for a long appeals process. At every stop, the legal questions will center on whether the political action committee Texans for a Republican Majority violated state election laws in its quest to ensure the GOP takeover of the Texas Legislature in the 2002 elections. TRMPAC achieved its goal of a Republican sweep, but not without cost. Five Democrats, including former Austin Rep. Ann Kitchen, subsequently sued three TRMPAC officers after losing their races to Republican candidates who benefited from the PAC's efforts. Two of the original three defendants – John Colyandro and Jim Ellis – were severed from the civil suit because they also face criminal charges of money-laundering in connection with the group's election drive. That left only co-defendant and TRMPAC treasurer Bill Ceverha to face their accusers.

As defense lawyers Terry Scarborough and Matt Slimp portrayed him in opening and closing arguments, Ceverha was little more than a volunteer figurehead in the TRMPAC organization, whose signatures on various fundraising letters and checks, they insisted, were simply a formality – a technical byproduct of his position as treasurer. Framing the lawsuit as a case of political sour grapes, Scarborough sought to portray his 68-year-old client, a former state representative from Dallas, as a victim so "beaten down" by the partisan-driven allegations that he has no desire ever to serve on a political action committee again. "This case is really about politics, and you can't be around this case and not know it," Scarborough said.

In response, the plaintiffs' team of David Richards, Joe Crews, and Cris Feldman argued that TRMPAC, with Ceverha as an active participant, illegally spent and failed to report $600,000 in corporate money. The plaintiffs also allege that TRMPAC effectively "laundered" $190,000 in corporate dollars by donating that amount to the Republican National Committee, which in turn sent checks totaling the same amount in noncorporate money to seven GOP House candidates, including two from Austin – Rep. Todd Baxter, who beat Kitchen in a tight race, and former Rep. Jack Stick, who defeated James Sylvester (but subsequently lost his re-election bid to Democrat Mark Strama in 2004). In closing, Feldman hammered home his argument that the total of $600,000 in unreported corporate funds didn't go toward legitimate "administrative expenses" – such as rent or utility expenses – as described in state law, but was instead used to pay for political consultants, phone banks, and pollsters, which TRMPAC attorneys argue are allowable expenses. "Every activity was geared toward" a Republican victory, Feldman said, pointing to a TRMPAC letter that explained to potential donors how their corporate dollars would go toward "productive, innovative activity ... rather than just paying for overhead."

Each side provided testimony from campaign finance experts. The plaintiffs called Trevor Potter, a national figure on federal election law who has counseled the U.S. Republican Party leadership. The defense relied on Indiana lawyer Jim Bopp, who provides campaign finance advice to hard-right national organizations like the Christian Coalition and Focus on the Family. RNC lawyer Charles Spies also took the stand, offering a fundraiser's shrug in response to the plaintiff's charges of money-laundering. Spies acknowledged that TRMPAC sent $190,000 in corporate money to the RNC but said he saw nothing unusual or even curiously coincidental about the RNC sending the same amount of money – this time in noncorporate dollars – to seven House candidates. "My comment would be, 'So what?' There was nothing illegal about that."

For all of the subject's dry complexity, the trial was not without moments of drama. At one point, Judge Hart admonished Scarborough when the defense lawyer, in closing arguments, turned on Kitchen for having the "audacity" to bring the legal claim against his client. After twice noting that Kitchen was a "very bright woman" who graduated from high school at age 16, Scarborough shook his finger at her and scolded her for not knowing how many financial accounts TRMPAC had in place. "You'd think a really bright person would look to see if [TRMPAC] had two accounts!" Scarborough said, before being reined in by the court. Scarborough later said he wasn't actually looking at Kitchen but rather Houston Chronicle reporter R.G. Ratcliffe, seated nearby.

The civil and criminal allegations against TRMPAC have thus far overshadowed similar lawsuits and an ongoing criminal probe of the Texas Association of Business, whose executive director, Bill Hammond, was the first to set off alarms with his chest-beating accounts of how TAB used corporate dollars to influence the 2002 legislative races. TRMPAC ultimately stole the show, thanks to the group's founder, U.S. House Majority Leader Tom DeLay, the most powerful Texan in Washington other than President Bush. Throughout the trial, the defense lawyers downplayed DeLay's role in the group's formation and its day-to-day activities. Nevertheless, TRMPAC's 2002 election success proved crucial to DeLay's own goals of installing a dominant GOP majority and a Republican House Speaker (Tom Craddick), thereby facilitating a redistricting plan designed to strengthen Republican control of Congress.