Senator Eliot Shapleigh - El Paso, Texas

Ronnie Earle, Travis County District Attorney

Travis County District Attorney Ronnie Earle is taking a second stab at prosecuting the state's largest business lobbying group for fronting a direct-mail campaign secretly financed four years ago largely by the insurance industry.

A Travis County grand jury on Wednesday re-indicted the Texas Association of Business on charges that it illegally spent corporate money on campaign advertising and, in effect, acted as a de facto political action committee.

The re-indictments are an attempt to fix objections by State District Judge Mike Lynch, who in June dismissed a similar indictment and threw into question Earle's four-year prosecution of the business association.

Lynch concluded that the business association's mailers did not expressly advocate the election or defeat of candidates under the Texas election code, which he called "an archaic, cumbersome, confusing, poorly written document in need of serious legislative overhaul."

Gov. Rick Perry, Lt. Gov. David Dewhurst and House Speaker Tom Craddick refused last year to back attempts in the Legislature to clean up the election code. The one effort to change the law died in a rowdy floor fight that became a referendum on Craddick as House leader. (Craddick was investigated, but never indicted, on similar campaign finance allegations.)

In his ruling, Lynch further wrote that the prosecution's legal theory that the business group coordinated its efforts with other political groups is a "convoluted maze" that did not give defendants adequate notice of what they were charged with.

"You simply cannot make a silk purse out of this sow's ear," Lynch concluded about the original indictment.

Earle, however, seems intent on trying.

With two new indictments, Earle seems to be trying to draw that line more brightly for the judge's reconsideration.

The new indictment notes that the mailers targeted specific voters in certain legislative districts immediately before the election. By coordinating the mailers with the campaign efforts of other political committees, the indictment alleges, the business association made an illegal corporate contribution to those political groups.

"The written order gave us a road map on how the judge sees the law," said Gregg Cox, who heads the public integrity unit. "We wanted to re-indict the case to address the judge's concerns before there's any more litigation."

Roy Minton, the business association's lawyer, said there are no new issues in the re-indictments.

"I respect their right to re-indict," Minton said. "I believe it's treading the same ground we've been over."

Four years ago, the association attempted to increase its political influence by sending 4 million pieces of mail, at a cost of $1.7 million, to voters in two dozen legislative races.

State law bars spending corporate money on campaigns, but TAB President Bill Hammond argued that the mailers discussed issues — even criticized candidates — without actually urging voters to support or oppose anyone.

The business association favored all Republicans over Democrats.

Thirty corporations provided the money with Hammond's assurance that their identities — unlike those of other campaign donors — would remain secret.

After four years of litigation and criminal investigation, it is now known that most of the donors were insurance companies, out of favor with the public at the time because of escalating rates and threats to leave the state without insurance coverage.

In his opinion, Lynch noted that many voters would consider the mailers campaign material, and the judge said he found some of the attacks reprehensible. But he also said the business group severely tested the law's limits without crossing the line into express advocacy.