A Travis County grand jury is investigating if Tom DeLay’s Texans for a Republican Majority (TRM) PAC illegally spent corporate money to help Republicans takeover the Texas House in 2002. TRM PAC raised $1,547,964 for that election—including more than $600,000 in corporate funds. This Lobby Watch analyzes the money that TRM PAC reported raising in 2002—and thereafter.

TRM PAC filed two different sets of disclosures in the 2002 election cycle. It told the Texas Ethics Commission (TEC) that it raised $796,651 but told the IRS that it raised $1,547,963. What created this discrepancy is that TRM PAC just told Texas regulators about the so-called “hard money” that it raised from political action committees (PACs) and individuals. Such hard money can be contributed directly to candidates for Texas state offices.

TRM PAC’s disclosure with the IRS reported this same hard money as well as an additional $751,312. Corporate contributions account for most of the money that TRM PAC failed to report to Texas regulators. Under a Texas law that prompted the grand jury probe, state candidates are barred from using corporate money and PACs only can spend it on narrow, non-political administrative expenses.

TRM PAC Reported
Just Half Of Its $1.5 Million To Texas Regulators

Out-of-State Disclosure

TRM PAC would not have raised the money it raised without Tom DeLay. Even the name “Texans for a Republican Majority” branded TRM PAC as the state stepchild of DeLay’s federal Americans for a Republican Majority PAC, which seeded TRM with $75,000.

DeLay’s Outside Donors

DeLay explains how a state PAC focused on the Texas legislature raised $565,200—37 percent of its total—outside Texas. By contrast, out-of-state donors accounted for 5 percent of the $195 million that Texas’ statewide and legislative candidates raised in 2002.

Top TRM-Donor Towns

Yet just 3 percent of the $802,026 in hard money that TRM PAC disclosed to the Texas Ethics Commission came from outside the state. Meanwhile, donors outside Texas accounted for 72 percent of the $751,312 that TRM reported exclusively to the IRS.

Half of TRM PAC’s top-donor cities lie outside Texas. This out-of-state money was no accident: TRM PAC hired DeLay’s national fundraiser, Warren Robold, to raise money from the Washington-based corporate lobby. Many out-of-state corporations that contributed to TRM PAC appear to have a greater interest in DeLay’s influence in Washington than they do in the Texas Legislature.

Last year reporters obtained emails from Kansas-based Westar Energy ($25,000 to TRM PAC) in which an executive—noting that Westar was giving money to DeLay in Texas—asked, “What’s our connection?” Another executive responded that DeLay is the House Majority Leader whose cooperation was needed for Westar to secure a special exemption that it was seeking from federal utility laws.

Top 2002 TRM PAC Donors By Source
(Includes Contributions By Corporations, PACs & Employees)

At $100,000, TRM PAC’s top out-of-state donor is the Alliance for Quality Nursing Home Care, a Boston-based trade group. TRM also collected $50,000 apiece from two out-of-state federal contractors. Questerra Corp. of Virginia and California’s Diversified Collection Services. Questerra is developing homeland-security software; Diversified collects bills for Uncle Sam.

Top Individuals Contributing To TRM PAC in 2002

Top Texas donors

Aggregating the corporate, PAC and executive contributions of companies, TRM PAC’s top three donor sources are based in Texas. TRM PAC’s top source of money was Houston homebuilder Perry Homes, which gave $170,000. Almost all of this money came directly from founder Bob Perry who became the top individual donor in the state by giving an astounding $3.8 million to Texas PACs and candidates in the 2002 cycle.

At $150,000, TRM PAC’s No. 2 donor source was the Farmers Insurance’s Texas PAC (DeLay pal Tom Craddick appointed Farmers lobbyist Bill Miller to his House speaker transition team a week after the 2002 election). The state’s No. 2 overall donor, James Leininger was TRM PAC’s No. 3 donor at $142,500. The founder of hospital bed manufacturer Kinetic Concepts, Leininger opposes abortion rights and promotes school vouchers and legal protections against lawsuits.

TRM PAC’s next-largest individual contributors were T. Boone Pickens and Louis Beecherl, Jr. Pickens is seeking a profitable way to sell huge water reserves in the Texas Panhandle to distant urban markets. The former head of Texas Oil and Gas Corp., Beecherl worked backstage to make Craddick speaker. Craddick then appointed Beecherl’s political operative, TRM PAC Treasurer Bill Ceverha, to his transition team.

TRM Donors in 2003

Legal changes taking effect after the 2002 election changed federal and Texas campaign laws. The federal “Brady-Lieberman” law of November 2002 allowed PACs such as TRM PAC (organized under Section 527 of the federal tax code) to stop filing disclosures with the IRS on activities that they report separately to a state regulator. The Texas Legislature then passed a bill that required Texas PACs to start disclosing corporate contributions after September 1, 2003.

As these new laws took effect, TRM PAC’s Texas Ethics Commission (TEC) disclosures reported $65,000 in donations—including $30,000 in corporate money from Burlington Northern and Belmont Oil. These reports also reveal two new donors who did not give to TRM PAC before the scandal broke. They are retired Dallas banker Peter O’Donnell and James Pitcock, head of Houston’s Williams Brothers Construction. Pitcock gave TRM PAC $5,000 in late 2003—a year after prosecutors indicted his company for dumping hazardous concrete sludge and oil waste into Houston waterways. Pitcock’s company paid $500,000 in early 2004 to settle those felony charges.

All of TRM PAC’s reported 2003 money arrived after September, when Texas’ corporate-contribution disclosure law took effect. TRM PAC did not have to report corporate funds received earlier that year to Texas regulators, but contributions not reported to state regulators had to be reported to the IRS. Oddly, TRM only filed IRS disclosures for the second half of 2003 (reporting the same donations that it reported in Texas). This selective filing makes it impossible to tell if TRM PAC received corporate money in early 2003.

In another disclosure oddity, TRM PAC reported to Texas regulators that it had $23,663 in the bank on January 1, 2004. Yet a tally of all the receipts and expenditures that it disclosed going back to its inception in 2001 suggests that it had $114,446 in the bank at the start of 2004.

It is unclear what explains the missing $90,783. A possible explanation is that the cash on hand that TRM PAC reported to the Texas Ethics Commission does not include unspent corporate dollars that it received before September 2003, when Texas’ law governing disclosures of corporate contributions took effect.

TRM PAC Donors Disclosed in 2003