From the Austin American-Statesman, Tuesday, April 6, 2004:

Staffer says Texas ties too tentative for him to be sued

By Laylan Copelin

AMERICAN-STATESMAN STAFF

Tuesday, April 6, 2004

A key staffer for U.S. House Majority Leader Tom DeLay who helped create Texans for a Republican Majority and spent months lobbying the Legislature is arguing that he did not establish the “minimum contact” necessary to be sued in Texas.

A lawyer for Jim Ellis, the executive director of DeLay’s national fund-raising organization, said Monday that his Washington-based client should not be sued over allegations that Texans for a Republican Majority failed to disclose $600,000 in corporate donations spent in the 2002 legislative elections.

According to Monday’s filing, Ellis lives in Virginia, works in the District of Columbia, owns no property in Texas and has never engaged in a business in Texas. A judge weighs those kinds of factors to decide whether a person outside Texas has enough contact in the state to be sued.

Records show that Ellis is no stranger to Texas or its politics.

At DeLay’s direction, Ellis helped create the Texas committee. As executive director of DeLay’s Americans for a Republican Majority, he sent the fledgling Texas group its $50,000 in start-up money.

He listed himself on state reports as a key decision-maker and paid consultant to Texans for a Republican Majority. He also helped decide which GOP candidates the committee would support in 2002 elections and sometimes traveled to Texas on the committee’s business.

In 2003, Ellis spent months in Texas on DeLay’s behalf, carrying DeLay’s wishes to state lawmakers as they drew congressional maps behind closed doors. He also did lobbying for a Virginia company that has $29 million in highway maintenance contracts and for a Washington law firm that represented a coalition of international charities.

J.D. Pauerstein, Ellis’ San Antonio lawyer, said it doesn’t matter: “Essentially, we don’t feel the contact Mr. Ellis has had with Texas is the kind or quality to justify being subject to jurisdiction.”

Austin lawyer Cris Feldman, who represents four Democratic candidates who are trying to sue Ellis, called his position disingenuous and farcical.

“Ellis wasn’t above choosing our Texas congressmen,” Feldman said, “but now he believes he’s above Texas law.”

The Democrats who sued lost in races that were targeted by the Republican majority group. Their civil lawsuit is covering the same ground as a grand jury investigation into whether Texans for a Republican Majority illegally spent corporate money in the campaign.

State law forbids corporate money from being used for campaign expenditures but allows a political action committee to spend corporate money to pay its administrative expenses.

During the 2002 state House elections, the Republican majority organization raised about $1.5 million, including $600,000 in corporate donations. Ellis and John Colyandro, the Texas committee’s executive director, defended spending corporate money on polls, consultants and fund raising as administrative expenses benefiting the committee and not the candidates.

The 2002 election was pivotal.

Texans for a Republican Majority, among others, helped elect a Republican majority in the Texas House, which, in turn, redrew congressional districts that are more favorable to Republicans.

According to Colyandro’s deposition, he and Ellis talked frequently about Texans for a Republican Majority as it raised money, endorsed candidates and handicapped the election.

They also lobbied the Legislature on other issues.

Both represented VMS Inc., a company with five-year contracts to maintain 130 miles of Interstate 35 around Waco and another 60 miles of Interstate 20 in the Dallas area. VMS Inc. also is a small subcontractor in the consortium building the $1.5 billion Texas 130 from Georgetown to Seguin.

Their other shared client was a Washington law firm representing a consortium of charities that, according to Colyandro’s deposition, wanted to be included in the automatic checkoff program for state employees.

In his deposition for a lawsuit challenging the redistricting map, Ellis said he came to Texas frequently during 2003. He said he attended meetings with Gov. Rick Perry, DeLay and other state leaders as early as January and worked off and on in Austin until the legislation was passed in October.

He worked very closely with the bill’s House sponsor, Rep. Phil King, R-Weatherford.

Ellis said he visited King “closer to 50 times than 25” during the redistricting controversy.

King said Ellis served as the funnel for Republican members of Congress to tell King what they wanted in the map.

“From the end of spring, April and May, when we were doing serious map-drawing, he was down here weekly,” King said. “In the summer, he was down a couple days a week, sometimes four or five days running.”

Even if Ellis should lose the first round of his jurisdictional battle, he is allowed to appeal that decision immediately. By some estimates, that could delay any civil trial by a year.

The grand jury, however, could still subpoena Ellis to testify behind closed doors in the criminal investigation.

Pauerstein argued that Ellis’ lobbying role won’t affect his jurisdictional battle.

“If I go to Florida to go fishing, that doesn’t mean I can be sued in Florida on something that has nothing to do with my fishing,” he said. “If I hit someone with a fish hook, I can be sued in Florida for hooking someone.”

lcopelin@statesman.com; 445-3617