AUSTIN AMERICAN-STATESMAN STAFF
Monday, February 24, 2003
Mailed ads that the Texas Association of Business says helped elect a business-friendly Legislature were created for the group but delivered to voters by two other associations, according to a key player in the effort that's now under scrutiny.
How and why the material was shared likely will become evidence for a Travis County grand jury investigating whether the business group violated state election laws.
The sharing of information and resources during an election is not illegal or uncommon. But if any of those groups "coordinated" with a political candidate, that could undercut the business association's argument that it has not violated any laws by keeping its donors secret. (For a legal definition of coordination, see Page A6.)
The state's largest business group and its president, Bill Hammond, won't say how the ads ended up in the hands of the Virginia-based Law Enforcement Alliance of America and the Texans for a Republican Majority political action committee.
The Virginia group isn't talking, either. But John Colyandro, former executive director of Texans for a Republican Majority, says he created one of the mail pieces.
However, the business group's public relations adviser, Chuck McDonald, says he created the ads mailed into four East Texas legislative districts, and documents from the business group confirm that he did the work. And McDonald says he put the Law Enforcement Alliance and Republican Majority logos on the mail pieces at the direction of Hammond.
The association solicited $1.9 million in corporate money to pay for the ad campaign, which targeted 24 legislative races last year. Corporate money cannot be used to support or oppose particular candidates. But Hammond has said that the ads were meant to educate voters on issues and that they did not violate any law.
Until now, the Law Enforcement Alliance of America was known in Texas for financing an estimated $1.5 million television ad campaign praising Republican attorney general candidate Greg Abbott while panning Democratic opponent Kirk Watson. Like the Texas Association of Business, the law enforcement group, which opposes gun control, is accused of not disclosing its donors for the commercial, according to complaints filed with state and federal authorities.
Texans for a Republican Majority, meanwhile, was created for the 2002 election to recruit GOP candidates, educate them on issues, take sides in contested GOP primaries and give money to favorite candidates.
By working to elect a large Republican majority in the Texas House, the Republican Majority group and the business association helped Midland legislator Tom Craddick become the House's first Republican speaker in more than a century.
The Republican Majority group was often referred to as a vehicle for Craddick's election, but Craddick said that was only because "most of the people over there supported me."
For example, former state Rep. Bill Ceverha, who served as the group's treasurer, later was on Craddick's transition team once he became speaker-elect.
Craddick, however, said he distanced himself from the group's activities because he was running for speaker.
Hammond has said he didn't coordinate his association's corporate ad campaign with anyone. But Hammond's lawyer, Andy Taylor, said that, without waiving his group's legal rights, he couldn't explain how someone else distributed the association's mailings.
"What (Bill) Hammond did or did not do goes to the confidentiality issue," Taylor said.
The answers investigators are pursuing may lie in how Hammond conducted two very different campaigns at once.
Two pools of cash
During last year's elections, Hammond wore two hats and, in effect, had two pockets of cash.
As association president, Hammond raised $1.9 million from corporations, frequently by calling on lobbyists who in turn brought their business clients on board.
As one of the leaders of the Texas Association of Business and Commerce Political Action Committee, Hammond raised a separate pool of money from individuals and disclosed the donations as required by state law. He raised only about $100,000 that way.
Hammond also appeared with candidates, recorded phone messages to voters and hosted a congratulatory luncheon for Craddick the day he announced his victory as speaker.
During the primary elections, Hammond used corporate money to pay McDonald's public relations firm to create an ad campaign grading candidates from "A" to "F" on their business records.
McDonald said that the association staff would bring him the research on the candidates and that his firm would write and design the ads. A lawyer hired by the association would review them to be sure the pieces did not expressly advocate the election or defeat of a candidate.
If an ad was over the line, it was either rewritten or paid for with money from the business group's political action committee. Because they are required to disclose their donors, political action committees are allowed to expressly advocate the election or defeat of candidates.
After the primaries, however, Hammond and association employees took over the ad campaign, McDonald said, because Hammond thought the association could do it cheaper.
Taylor, Hammond's lawyer, would not say whether the in-house employees were paid with corporate or political money.
Soon, however, money was not a problem.
At an Aug. 21 statewide conference of insurers, Hammond delivered a letter saying that his association had raised $650,000 from corporations for a voter education project and that his goal for the campaign was to raise $1 million.
A flood of corporate money in the final 10 weeks of the campaign swelled the total to $1.9 million.
The association staff was swamped, says McDonald, who also said he was called back to help create mailers.
One of McDonald's ads for the business association complained of trial lawyers hiding their money from the public by sending it through other groups.
Rejected ads mailed
McDonald said he also created the ads that eventually ended up in the hands of the Virginia law enforcement group and the Texans for a Republican Majority PAC.
Three of those sent by the law enforcement group looked very similar: a photo of a man's hands through a cell door. The text accused the Democratic candidates, Mike Head of Athens, Paul Clayton of Orange and George Robinson of Fairfield, of being lawyers on the side of drug traffickers or baby killers.
The fourth ad, sent by the Republican Majority group, targeted David Lengefeld, a one-term Democratic legislator from Hamilton trying a comeback after being defeated in 2000.
The mail piece shows Lengefeld's head superimposed on a man holding six suitcases. The headline reads: "David Lengefeld was defeated & sent packing after just one term in the Texas House. Wonder why?"
Taylor said Hammond rejected the first three ads as crime pieces that did not fit the business association's message. He was unsure why the anti-Lengefeld ad was rejected.
Taylor also said McDonald gave the rejected ads to a printer and he's unsure what happened to them after that.
McDonald said there was more to it. He said Hammond told him to put the law enforcement and Republican Majority group disclaimers on the ads that McDonald had created for the business association. He said Hammond also told him to send the ads to the printer.
"They can take my deposition," McDonald said, "but I never talked to anyone" at the two groups who mailed the pieces.
Colyandro, the former executive director of Texans for a Republican Majority, said he "coordinated the creation" of the anti-Lengefeld piece without help from McDonald or the business association. He said he worked with Thomas Graphics of Austin on the piece.
Yet the business association's documents show draft copies of the anti-Lengefeld piece with the Texas Association of Business logo.
Bob Thomas with Thomas Graphic was not available for comment last week. Both he and McDonald are members of the business association's board of directors but not the smaller executive committee that helps Hammond run the organization.
Eight days after the Nov. 5 election, the business group's political action committee donated $13,126.45 to Texans for a Republican Majority. That occurred a day after the Republican group paid the same amount to Thomas Graphics of Austin.
Neither Taylor nor Colyandro would say whether the payment was for the anti-Lengefeld mailing.
Voters in four Texas legislative districts across East Texas remained unaware of the business group's role in researching and creating the attacks mailed to their homes.
And the four victorious GOP lawmakers aided by the ads -- Sid Miller of Stephenville, Betty Brown of Terrell, Byron Cook of Corsicana and Mike "Tuffy" Hamilton of Mauriceville -- said they had no contact with anyone before the ads were mailed. "I was naive," Hamilton said. "I didn't know people could put out things without talking to you first."
In a letter to the Texas Association of Business, Austin lawyer Ed Shack advised his client to avoid coordinating its corporate ads with any campaign for a political office.
According to a court, Shack said, an expenditure becomes `coordinated' with a campaign only if:
* the expenditure is made at the request or suggestion of the campaign;
* or the candidate and his agents exercise control over the communication;
* or there has been substantial discussion or negotiation between the campaign and the entity over the communication's contents, timing, location, mode, intended audience or volume.
He further advised that the court defined `substantial discussion or negotiation' as a situation in which the candidate and the group spending money emerge as partners or joint venturers in the expressive expenditure