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Quixotic Quest Dept.

Four defeated state candidates in Texas are filing suit against the Texas Association of Business, claiming that money that the TAB spent in the campaigns constituted direct contributions, which are illegal under state law.

Okay, this is a little complicated. Let’s start with the story:

The TAB, in what it recently bragged was an “unprecedented show of muscle,” targeted 22 hotly contested races for the Texas House and two for the state Senate. Candidates supported by the group won 18 of the House races and one of the crucial Senate contests.

Overall, 100 of 104 House candidates and 22 of 23 Senate candidates endorsed by TAB’s political action committee won in an election that saw Republicans capture a majority of the House for the first time in 130 years.

TAB spent $2 million in the most competitive races. Only $100,000 of that amount came from its political action committee, which publicly identifies contributors.

The remainder was in direct corporate contributions for so-called issue advertising, which criticized the candidates it was trying to defeat but didn’t specifically tell voters how to cast their ballots. TAB contends the sources of those contributions are not subject to public disclosure.

State law prohibits direct corporate contributions to political races. But TAB believes it successfully skirted that ban by buying the issue ads.

In two separate lawsuits filed in state district court in Austin, the four defeated Democrats contend the corporate expenditures were illegal.

If I’m understanding this correctly, the plaintiffs are saying that TAB’s purchase of the “issues ads” is a direct contribution, and TAB says it isn’t.

Here’s what I think is the relevant law from the state elections code. I Am Not A Lawyer, so make of it what you will:

§ 253.091. Corporations Covered

This subchapter applies only to corporations that are organized under the Texas Business Corporation Act, the Texas Non-Profit Corporation Act, federal law, or law of another state or nation.

Amended by Acts 1987, 70th Leg., ch. 899, § 1, eff. Sept. 1, 1987.

§ 253.092. Treatment of Incorporated Political Committee

If a political committee the only principal purpose of which is accepting political contributions and making political expenditures incorporates for liability purposes only, the committee is not considered to be a corporation for purposes of this subchapter.

Amended by Acts 1987, 70th Leg., ch. 899, § 1, eff. Sept. 1, 1987.

§ 253.093. Certain Associations Covered

(a) For purposes of this subchapter, the following associations, whether incorporated or not, are considered to be corporations covered by this subchapter: banks, trust companies, savings and loan associations or companies, insurance companies, reciprocal or interinsurance exchanges, railroad companies, cemetery companies, government-regulated cooperatives, stock companies, and abstract and title insurance companies.

(b) For purposes of this subchapter, the members of the associations specified by Subsection (a) are considered to be stockholders.

Amended by Acts 1987, 70th Leg., ch. 899, § 1, eff. Sept. 1, 1987.

§ 253.094. Contributions and Expenditures Prohibited

(a) A corporation or labor organization may not make a political contribution or political expenditure that is not authorized by this subchapter.

(b) A corporation or labor organization may not make a political contribution or political expenditure in connection with a recall election, including the circulation and submission of a petition to call an election.

(c) A person who violates this section commits an offense. An offense under this section is a felony of the third degree.

Amended by Acts 1987, 70th Leg., ch. 899, § 1, eff. Sept. 1, 1987.

§ 253.095. Punishment of Agent

An officer, director, or other agent of a corporation or labor organization who commits an offense under this subchapter is punishable for the grade of offense applicable to the corporation or labor organization.

Amended by Acts 1987, 70th Leg., ch. 899, § 1, eff. Sept. 1, 1987.

§ 253.096. Contribution on Measure

A corporation or labor organization may make campaign contributions from its own property in connection with an election on a measure only to a political committee for supporting or opposing measures exclusively.

Amended by Acts 1987, 70th Leg., ch. 899, § 1, eff. Sept. 1, 1987.

§ 253.097. Direct Expenditure on Measure

A corporation or labor organization not acting in concert with another person may make one or more direct campaign expenditures from its own property in connection with an election on a measure if the corporation or labor organization makes the expenditures in accordance with Section 253.061 or 253.062 as if the corporation or labor organization were an individual.

Amended by Acts 1987, 70th Leg., ch. 899, § 1, eff. Sept. 1, 1987.

Sections 253.061 and and 253.062 cover contributions by individuals:

§ 253.061. Direct Expenditure of $100 or Less

Except as otherwise provided by law, an individual not acting in concert with another person may make one or more direct campaign expenditures in an election from the individual’s own property if:

(1) the total expenditures on any one or more candidates or measures do not exceed $100; and

(2) the individual receives no reimbursement for the expenditures.

Amended by Acts 1987, 70th Leg., ch. 899, § 1, eff. Sept. 1, 1987; Acts 1997, 75th Leg., ch. 864, § 243, eff. Sept. 1, 1997.

§ 253.062. Direct Expenditure Exceeding $100

(a) Except as otherwise provided by law, an individual not acting in concert with another person may make one or more direct campaign expenditures in an election from the individual’s own property that exceed $100 on any one or more candidates or measures if:

(1) the individual complies with Chapter 254 as if the individual were a campaign treasurer of a political committee; and

(2) the individual receives no reimbursement for the expenditures.

(b) An individual making expenditures under this section is not required to file a campaign treasurer appointment.

Amended by Acts 1987, 70th Leg., ch. 899, § 1, eff. Sept. 1, 1987; Acts 1997, 75th Leg., ch. 864, § 244, eff. Sept. 1, 1997.

If you understand all that, you’re a) a lawyer, b) smarter than me, or c) both. If so, feel free to enlighten me in the comments.

My ignorance of the legal nuances aside, I think there’s a better chance that I’ll be the starting quarterback for the Cowboys on Turkey Day than any relief being given to the plaintiffs in this suit. It’s pie-in-the-sky, it goes against the state’s unofficial motto (“Creating a Friendly Climate for Bidness Since We Kicked Santa Anna’s Ass All Them Years Ago”), and the state Supreme Court is full of Republicans who live on campaign contributions. It’s just not gonna happen.

But hey, as long as we’re dreaming, here’s what I’d like to see happen. I’ve seen this suggestion before, including in the blogosphere (can’t remember where, unfortunately), and I think it has merit: Let everyone contribute as much as they want, but all funds go into a blind trust and then dispersed anonymously to the candidates. If candidates don’t know who’s giving them the quid, they will have less incentive to give back the pro quo.

There are two main flaws with this approach – it requires a bureaucracy to handle the money, and politicians are never going to be truly in the dark about who their biggest supporters are. I don’t think the first objection is that big a deal. As for the second, I refuse to let the perfect kill the good.

That doesn’t address the “issues ads” that the plaintiffs in this suit are complaining about. I can’t think of any way to restrict them that doesn’t cause First Amendment concerns, so what I’d like to see is more stringent disclosure laws. If the Citizens For A Better Tomorrow want to run an ad asking why Candidate Johnson hates America, puppies, and motherhood, I think the ad should be proceeded by giving the contact information for CFABT, to wit

“The following ad was paid for by Citizens For A Better Tomorrow, PO Box 666, Boston, MA, 02134, 617-555-1234, http://www.bettertomorrow.org, Jerome Horwitz (President)”

In addition, all officers of CFABT and everyone who contributes above a certain level (say $100) should be publicly available.

Like I said, all that is for the perfect world that I hope to live in some day. In the meantime, I’ll try to keep an eye on this case, but I fully expect it to go nowhere.

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3 Comments

  1. Your ideas for campaign finance reform actually aren’t that bad. I’m vary of the blind trust idea (you might end up needing to prohibit contributors from shooting off an e-mail to the campaign informing them of an massive incoming donation from them, which would raise First Amendment concerns). Still, it is certainly preferable to contribution limits, and like me, you put an emphasis on disclosure. If this were the system in place now, I’d be much happier.

  2. The blind trust idea may work better in theory than in practice. It would be hard to deter cheating, though of course a candidate would only have someone’s word that they gave money to their campaign. I’m sure some game theorist could write a dissertation on the various scenarios.

    An alternate idea would be to beef up disclosure laws along the lines proposed for the issues ads -basically, require all donations above $100 to be reportable and easily accessible.

  3. [...] years (and one week) ago, four defeated Democratic candidates for the State House filed a lawsuit against the Texas Association of Business, claiming that TAB funneled illegal corporate [...]

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