DeLay Sees Conviction Voided by Texas Court
AUSTIN (CN) - A Texas appeals court tossed the conviction of former U.S. House of Representatives Majority Leader Tom DeLay on money laundering and conspiracy charges due to a lack of evidence.
In a 2-1 majority decision along party lines, a three-judge panel with the Texas Third Court of Appeals in Austin reversed DeLay's conviction on Thursday and acquitted him of both charges.
DeLay, 66, was convicted in November 2010 of laundering $190,000 of corporate money in 2002 from one of his political action committees, Texans for a Republican Majority, through the Republican National State Elections Committee to seven candidates for Texas office. Corporate lobbyists had donated the money to DeLay's PAC.
DeLay and his attorneys maintained throughout his trial that he did not launder money because the money was not the same money as it was moved around - a claim the prosecutor called "ridiculous." DeLay's indictment forced him out of Congress after 20 years in the House.
He was later sentenced to three years in state prison, but he has remained free pending his appeal.
Writing for the majority, Justice Melissa Goodwin concluded the evidence was "legally insufficient" to sustain the convictions, that the state failed to establish the element of the money being the proceeds of criminal activity.
Justice David Gaultney, a fellow Republican, joined the opinion.
"Based on the totality of the evidence, we conclude that the evidence presented does not support a conclusion that DeLay committed the crimes that were charged," Goodwin wrote. "The fundamental problem with the state's case was its failure to prove proceeds of criminal activity."
Goodwin specifically pointed out the prosecution failed to prove the culpable mental state of the donating corporations supported the trial court's finding of criminal intent by the corporations in violating state election laws. She cites testimony of corporate representatives that the corporations could lawfully make donations to Delay's PAC, who could then lawfully transfer the funds out of the state.
Goodwin disagreed with the prosecution's argument that criminal proceeds were generated when DeLay and others agreed to the combined transfer of funds through the swap of "soft" money for "hard" money. Political contributions are classified as hard money when donated directly to political candidates and are subject to tighter contribution limits. Soft money, on the other hand, are donations made to political parties that are not subject to the same limits.
Goodwin saidthe prosecution disregarded the distinction between soft and hard money accounts in spite of the practice of maintaining separate, segregated bank accounts for soft and hard money being legitimate.
"Here, the evidence was undisputed that the RNSEC issued checks to the seven Texas candidates from a hard money account that was separate from its soft money account," Goodwin wrote. "Thus, the sources of the funds in the hard money account were not 'indirectly' from corporations but from sources such as individuals who were not prohibited from making campaign contributions."
Goodwin concluded there was no evidence DeLay's PAC or the RNSEC treated the corporate funds as anything other than what they were, "corporate funds with limited uses under campaign finance law."
"When viewed in the light most favorable to the verdict, the evidence showed an agreement to two legal monetary transfers: that TRMPAC transfer corporate money to RNSEC for use in other states and not in Texas in exchange for RNSEC transferring funds to Texas candidates out of a hard money account," Goodwin writes. "Rather than supporting an agreement to violate the Election Code, the evidence shows that the defendants were attempting to comply with the Election Code limitations on corporate contributions."
Goodwin said the state's insufficient case is demonstrated by the jury's confusion during deliberations. The money laundering statute requires prosecutors to prove the funds involved in the transaction were proceeds of criminal activity and, if they are not, then the transaction was not money laundering.
"The jury asked the trial judge that question of law in this way: 'Can it constitute money laundering if the money wasn't procured by illegal means originally,'" Goodwin wrote. "The proper answer to the question is 'no.' The jury's question about the law was not answered, however; the court simply referred the jury to the court's charge."
Goodwin said the jury should not have been put in the "uncomfortable position" of deciding what the law is.
DeLay is represented on appeal by Brian Wice, of Houston. During an interview with the Courthouse News Service, Wice said this is a case "that you get a pretty good sense of as you walk out of [oral] arguments."
He said his client was "gratified, relieved and somewhat numb" at his acquittal.
"This is a huge victory not just for us but for all citizens convicted with insufficient evidence," Wice said. "I felt confident that justice would be served, that the court would not second-guess the jury on appeal - they were hamstrung for instructions that never came."
Wice added: "You don't have to agree with his political backstory to see you could be put through the same crucible he was. Persecution and prosecution can be of the same DNA."
The panel's lone Democrat, Chief Justice J. Woodfin Jones, issued a scathing dissent that deems the money as proceeds from criminal activity. He points out that the "lion's share" of corporate contributions to DeLay's PAC do not fall within exceptions authorized under law, that the Election Code bans corporations from making political contributions.
Jones said the Texas Court of Criminal Appeals held that corporations may not make contributions to PACs without limiting their use to a specific, authorized purpose.
Jones said the majority's use of testimony of corporate representatives as to their intent of complying with the law merely created a fact issue that should be decided by the jury.
Jones also disagreed with the majority's conclusion that prosecutors failed to prove corporations' culpable mental state because corporations would legally donate to DeLay's PAC.
"It does not logically follow that merely because a corporation could make a legal contribution, it necessarily did make a legal contribution," Jones wrote. "Again, the presence or absence of the requisite intent was simply a fact issue to be resolved by the jury."