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Rebuffed by a federal judge, the Texas Association of Business sued Travis County District Attorney Ronnie Earle in state court on Feb. 7, seeking to quash grand jury subpoenas requesting information about TAB’s almost $2 million advertising campaign that spotlighted about two dozen state legislative races in 2002. Judge Mike Lynch, of Austin’s 167th District Court, scheduled a Feb. 26 hearing to hear arguments on the business group’s motions in Texas Association of Business v. Earle. Also at that hearing, Lynch will consider Earle’s motions for contempt against Bill Hammond, TAB’s president, and Don Shelton, information systems officer for the association, for failing to turn over the information sought by the subpoenas’ deadline on Feb. 6. Citing the Younger abstention doctrine, U.S. District Judge Sam Sparks of Austin refused at the Feb. 7 hearing to rule on the motions that TAB filed in federal court to stop Earle from enforcing the subpoenas. In 1971, the U.S. Supreme Court held in Younger v. Harris that, except in unusual circumstances, a federal court should not intervene in a state criminal prosecution that started prior to the institution of the federal suit. In an interview, Jim George, an attorney representing Earle, alleges TAB officials agreed to provide the information sought by the grand jury. “Then they sued Mr. Earle,” says George, a partner in Austin’s George & Donaldson. Houston attorney Andy Taylor, who represents the business group, says Earle asked the association to disclose all its members and the names of all donors who contributed the funding for the television and print advertising campaign. “Ronnie Earle isn’t entitled to that information,” says Taylor, a Locke Liddell & Sapp partner. George says the Texas Legislature determined that it’s important for the integrity of the political process for the public to know who funds political campaigns. It’s also important, he says, for TAB’s constitutional right to free speech to be protected. “It’s the line between [the two rights] that we’re struggling with,” George says. Taylor says he doesn’t think the issue is “murky” or “ambiguous” in light of an April 2002 decision by the 5th U.S. Circuit Court of Appeals in Chamber of Commerce of the United States of America v. Moore. In that case, the Chamber of Commerce challenged Mississippi Attorney General Mike Moore’s authority to regulate television commercials that the chamber aired in connection with Supreme Court elections in that state. A three-judge panel of the 5th Circuit said in Moore that the 1st Amendment permits regulation of political advertising, but only if the ads advocate “in express terms” the election or defeat of a specific candidate. “I think it’s absolutely 100 percent clear what’s allowed and what’s not allowed,” Taylor says. Magic Words Edward M. Shack, an attorney hired by TAB to review the advertisements before they were released last year, says the ads meet the “magic-words” or explicit-terms test adopted by the 5th Circuit in Moore. “They didn’t have explicit terms advocating specific electoral actions,” says Shack, with the Office of Edward M. Shack Attorney at Law in Austin and formerly an attorney with the Texas Secretary of State’s Office. The ads became an issue when five Democrats who were defeated last year in their bids for seats in the Texas Legislature sued the TAB and Hammond in November. The defeated candidates alleged in Kitchen, et al. v. Texas Association of Business, et al. and in Sylvester v. TAB, et al. that the business group violated Texas Election Code chapters 253 and 254 by using corporate campaign contributions to fund ads for its chosen Republican candidates and by not reporting who gave the money. In December, the TAB filed a federal suit in Austin against 17 defeated state legislative candidates who weren’t plaintiffs in the original suits. The association alleged in TAB, et al. v. Badnarik, et al. that the ads were issue-oriented and discussed candidates’ records on public issues and concerns. Because the ads didn’t advocate for or against a candidate, they were protected under the First Amendment, TAB alleged in its petition. According to TAB’s motion to quash the subpoenas, three government watchdog groups requested in a Dec. 10, 2002, letter that Earle conduct a formal investigation into TAB regarding allegedly “blatant criminal violations of state campaign finance laws.” Taylor told Sparks at the Feb. 7 hearing that the DA’s office must have leaked information about the subpoenas to the news media. Within 15 minutes after the TAB officials were served with instructions not to disclose the existence of the subpoenas, a television cameraman showed up at the association’s front door, Taylor said at the hearing. Austin attorney Roy Minton, Taylor’s co-counsel, argued that if the DA obtains the list of TAB’s contributors and subpoenas those people, the news media is going to know who they are and will be waiting for them when they have to testify before the grand jury. George told Sparks during the Feb. 7 hearing that for TAB to agree to turn over the information sought by the grand jury and then to file a suit and claim that prosecutors acted inappropriately is “underhanded.” In an interview, George says the DA needs to know what was said and done with regard to the ad campaign. “I’m trying to let Mr. Earle have the freedom to conduct his investigation,” George says. But Taylor contends that Earle has gotten “the cart before the horse” and that a court first should decide whether the information being sought is protected before it is made available to the grand jury and possibly made public. While Sparks declined to act on the motions to quash the subpoenas, he told the attorneys that he was “troubled” by the case because if it is ultimately determined that TAB’s attorneys are correct and the ads are constitutionally protected, donors’ names that should not be disclosed could be disclosed in violation of those protective rights.

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