|March 31, 2003|
District Attorney Earle:
Texans for Public Justice (TPJ) has reason to believe that a general-purpose political committee registered in the state of Texas, Texans for Republican Majority (400 West 15th Street, Suite 1600, Austin, TX 78731, Bill Ceverha, Treasurer), violated Chapter 253 of the Texas Election Code on numerous occasions relating to the 2002 Texas legislative elections. Particularly, TPJ has reason to believe that the Texans for a Republican Majority political committee (TRM) failed to report certain political contributions and expenditures with the Texas Ethics Commission and misused corporate contributions to pay for political expenditures incurred by the committee. We are formally asking your office to investigate these apparent violations and, if the evidence warrants, to prosecute the offending parties.
A review of public disclosure records filed by TRM with the Texas Ethics Commission and the Internal Revenue Service reveal that the committee raised a total of $1,547,963 in funds from a combination of individuals, political committees and corporations and expended a total of $1,410,766 between September 5, 2001and November 23, 2002. A review of the $1,547,963 in contributions reported by TRM in its IRS 8871 filings appears to show that, at a minimum, $602,300 of those funds appeared to be contributed by corporations, which under the Texas Election Code,are prohibited from contributing to TRM to fund any political activities. Contributions from these corporate sources may only be used by TRM to pay for “the establishment or administration of a general purpose-political committee” (section 253.100). TRM also reported contributions from non-Texas political committees (e.g. Americans for a Republican Majority) which may include contributions from corporate sources. Contribution and Expenditure reports filed by TRM with the Texas Ethics Commission for the same period reveal that TRM listed a total of $796,651 in political contributions and $799,626 in political expenditures. None of the political contributions reported by TRM to the Texas Ethics Commission appear to be from prohibited (corporate) sources.
TRM’s IRS 8872 filings also include the $791,500 in political expenditures that are itemized on the TRM Ethics Commission filings, but the IRS filings reveal an additional $619,266 in expenditures, many of which appear to be political expenditures not reported to the Texas Ethics Commission. A sampling of the expenditures listed on the IRS forms but not reported to the Ethics Commission as political expenditures includes:
In conclusion, if the expenditures listed above, as well as others reported to the IRS do not qualify as legitimate administrative expenses as defined by Texas law, these expenditures should have been reported as political expenditures on the TRM’s Contributions and Expenditures Reports filed with the Texas Ethics Commission. Indeed, if these expenditures are political expenditures, as we have reason to suspect, it appears they were paid for with corporate funds which is a clear violation of the Election Code.
We appreciate your office’s attention to this matter.
Texans for Public Justice
Copies of Texans for a Republican Majority’s IRS 8872 filings for the period 9/5/01 through 11/23/02.
Copies of Texans for a Republican Majority’s Contributions and Expenditures Reports filed with the Texas Ethics Commission from 7/1/01 through 12/31/03.
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