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State's largest business group pleads guilty to campaign finance charge
October 21, 2008

The Texas Association of Business pleaded guilty to a misdemeanor charge, unlawful direct campaign expenditure, and will pay a $10,000 fine. That was a lesser charge than the felony District Attorney Ronnie Earle had sought.

Written by Corrie MacLaggan, The Austin American-Statesman

The state's largest business organization pleaded guilty today to violating campaign finance law, six years after helping elect a slate of Republican lawmakers.

The Texas Association of Business pleaded guilty to a misdemeanor charge, unlawful direct campaign expenditure, and will pay a $10,000 fine. That was a lesser charge than the felony District Attorney Ronnie Earle had sought.

Tuesday's settlement was the last of the criminal charges against the Texas Association of Business in a six-year investigation by Travis County prosecutors.

Earle accused the trade association, which is a corporation, of making illegal corporate donations to its own political action committee by paying the salaries of two employees as they traveled the state, appearing at fundraisers and other events, urging voters to support the state GOP candidates, speaking to the news media on behalf of the candidates and consulting on strategy.

State law generally prohibits the spending of corporate money in connection with a campaign.

State District Judge Mike Lynch dismissed indictments accusing the organization of illegally spending $1.7 million of corporate money to send 4 million mailers to voters in 2002. Lynch ruled that the mailers were protected free speech not covered by the ban against corporate money in campaigns.

But Lynch said last month that the group must stand trial on charges that it illegally paid the salaries of its president, Bill Hammond, and its lobbyist Jack Campbell, with corporate money as they campaigned for a slate of 24 legislative candidates in 2002. In addition to their duties for the association, Hammond and Campbell also directed the activities of the association's political committee, which endorsed those 24 candidates and raised money for them.

Prosecutors argued that the association's political action committee should have paid a portion of the two men's salaries with campaign donations and not corporate dollars when they were politicking.

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