Senator Eliot Shapleigh - El Paso, Texas

Mike Toomey took lead in raising money from clients.

The slowly unwinding litigation against the Texas Association of Business has taken another decisive turn in the group's favor.

State District Judge Joe Hart last week dismissed a campaign finance lawsuit brought by former Democratic state Rep. Ann Kitchen of Austin against the statewide business group, 30 once-anonymous corporate donors and Austin lobbyist Mike Toomey.

The dismissal will be appealed, but the association's lawyer, Andy Taylor of Houston, thinks that the judge's decision, coupled with similar rulings on the criminal side of the case, signals the long-term trend in campaign finance: There's a place in Texas law for campaign issue ads anonymously financed by corporations or unions.

"If the Legislature wants to change the law, it's up to them," Taylor said. "But the courts aren't going to do it for them."

The lawsuit challenged the association's 2002 effort to help elect a GOP majority to the Texas House of Representatives by sending 4 million mail pieces to voters in two dozen races.

Thirty corporate donors, mostly insurance companies that were politically out of favor, anonymously financed the $1.7 million effort under the association's banner. (The donors were accidently identified when a lawyer failed to black out their names adequately in documents the association was forced to release.)

The mailers criticized Democratic candidates and praised Republicans who supported the association's positions on various issues.

Taylor argued that the association didn't have to disclose its donors or the expenditures because the mailers never advocated the election or defeat of candidates.

He said the ads were not campaign communications because they avoided words such as "vote for" or "vote against."

Toomey was an association board member who took the lead in raising money from his corporate clients.

Austin lawyer Joe Crews, who represented Kitchen and four other Democratic candidates who lost in 2002, argued that the mailers were campaign materials and that the association operated as an illegal political committee.

Another state district judge, Mike Lynch, has dismissed two criminal indictments that made similar allegations against the association. Travis County District Attorney Ronnie Earle is appealing Lynch's dismissals.

In a related matter, one criminal indictment against former U.S. Rep. Tom DeLay, R-Sugar Land, and his associates has been thrown out, but another one is pending.

In the association's case, Crews acknowledged the long, uphill battle to win on appeal.

"This will never end," he said, jokingly.

But he said the principle is worth fighting for. "The same kind of shenanigans have not happened as broadly and publicly as 2002, but they are finding other ways to do it."