On Oct. 10, former House Majority Leader Tom DeLay’s attorney asked a 3rd Court of Appeals panel to stick to the court’s previous finding that Texas’ money laundering statute did not cover checks in 2002 when a political action committee sent corporate contributions to a Republican committee that gave money to GOP candidates.
“What this case is all about is statutory construction,” Houston solo Brian Wice, DeLay’s lead counsel on appeal, told the three-justice panel in Austin.
Wice argued that, before the Legislature amended the statute in 2005, the definition of “funds” in Texas Penal Code §34.01(2), the money laundering statute, did not include checks. Wice contended that the 3rd Court “got it right” in 2008 when it held in Ex Parte Ellis that the pre-2005 version of the statute cannot be tacitly read to include checks. DeLay associate Jim Ellis brought the appeal in Ex Parte Ellis.
In 2010, the Texas Court of Criminal Appeals reversed the 3rd Court’s ruling in Ellis, finding that the 3rd Court “improperly resolved an ‘as applied’ challenge when it held that the money-laundering statute did not apply to checks.”
Holly Taylor, a Travis County assistant district attorney representing the state in DeLay v. State,arguedthat under Penal Code §1.05 penal statutes do not have to be strictly construed. Instead, they should be interpreted to give fair import and to promote justice. Taylor also argued that the primary intent of the Legislature’s 2005 amendment to §34.01(2) was “to clarify” the statute.
Taylor told the 3rd Court panel that the state was able to prosecute defendants who used checks in money laundering before the Legislature amended the statute. However, Wice said that those defendants’ lawyers “didn’t have the sense” to raise as a defense that checks were not funds under the statute prior to 2005.
DeLay, a Sugar Land Republican, is appealing his 2010 convictions for conspiracy to commit money laundering and money laundering. In January 2011, Senior District Judge Pat Priest of San Antonio, sitting by assignment, sentenced DeLay to three years in prison for the conspiracy conviction and five years’ community supervision for the money laundering conviction.
The convictions stem from allegations that DeLay conspired with Ellis, formerly DeLay’s chief political aide in Washington, D.C., and another associate to funnel $190,000 that the Texans for Republican Majority Political Action Committee (TRMPAC) collected from corporations through the Washington-based Republican National Committee, which sent contributions to seven GOP state Legislative candidates.
The panel hearing DeLay included 3rd Court Chief Justice J. Woodfin Jones and Justice Melissa Goodwin, and Justice David Gaultney of Beaumont’s 9th Court of Appeals. Texas Supreme Court Chief Justice Wallace Jefferson appointed Gaultney to participate in hearing DeLay’s appeal after the 3rd Court granted DeLay’s motion to recuse Justice Diane Henson.
Although they gave no indication how they might rule, the justices on the panel focused much of their questioning on whether the corporations that made the contributions could legally give money to TRMPAC. Gaultney said the first question that the DeLay jury sent to the trial judge concerned whether the money had to be illegal at the start of the transaction.
“The judge did not instruct on that,” Gaultney said.
The Texas Election Code prohibits corporations from contributing money directly to a candidate’s campaign. The money laundering statute requires that funds used in a transaction be the proceeds of criminal activity.
Taylor said the corporations knew that the money they contributed would go to candidates because TRMPAC indicated it would in its campaign literature. She said only two of the corporations that made donations specified that their money was to be used for administrative purposes authorized under the election code.
Jones asked whether TRMPAC’s check could cause the transfer of funds to the Texas candidates. But Wice said that was “an academic inquiry,” because the 3rd Court had concluded that §34.01 did not include checks in 2002.
In an interview after the hearing, Taylor said the panel should “look to the plain language” of the statute and use the code construction act to determine its meaning.
But Wice says in an interview, “You may believe what Tom [DeLay] did was wrong, was knuckleheaded . . . [but] it wasn’t illegal.”
Lawyers on both sides in DeLay say they expect that, regardless of how the 3rd Court panel rules, the case ultimately will be appealed to the Texas Court of Criminal Appeals.