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Texas: "trading money"

The Washington Post reports: A civil trial focusing on the fundraising activities of a political action committee set up by House Majority Leader Tom DeLay (R-Tex.) turned Thursday to one of the major allegations: that the PAC laundered money in its quest to elect Republicans to the state legislature in 2002.

At issue is $190,000 in corporate donations that the director of Texans for a Republican Majority sent to the Republican National State Elections Committee in mid-September 2002. Three weeks later, the committee sent checks in the equivalent amount that had been raised from individual donors to seven Republican statehouse candidates supported by TRMPAC. Texas law prohibits the use of corporate funds in election campaigns.

Charles R. Spies, the election law counsel for the Republican National Committee, testified that the practice of "trading money" between the RNC and state political committees was common through the end of 2002, when it was outlawed under federal campaign finance reform. Until then, he said, corporate dollars raised in states that outlaw such campaign contributions could be sent to the RNC, which would then send back donations raised from individuals -- but rarely on a one-to-one ratio.

"It's much harder to raise, so it's worth more," he said of individual donations. -- DeLay PAC Trial Looks at Money-Laundering Claims (washingtonpost.com)