### T E X A S C O U R T O F A P P E A L S , T H I R D D I S T R I C T , A T A U S T I N

NO. 03-11-00087- CR

Thomas Dale DeLay, Appellant

v. The State of Texas, App ellee

F ROM TH E DISTRI CT COURT O F TRAVIS CO UNTY, 331 ST JUDICI AL DISTRICT NO. D-1 -DC- 05- 9041 61, H ONO RAB LE WAY NE P ATRICK P RIEST, J UDGE P RESIDING

O P I N I O N
Ap p ell ant Thomas Dale DeL ay appea ls from judgme nts convicting him o f t h e offe nses of money launder ing of funds o f $ 1 0 0 , 0 00 or more and conspirac y to commit money launder ing of funds of $100,000 or more. See Tex. Penal Code §§ 15.02, 34.02. T h e predic ate 1
offe nse to support the money launder ing conviction was a felony Election Code violation. See Tex. Elec. Code. § 253.003. Be ca use we conclude that the evidence was leg ally insufficient to sustain
DeL ay ’s convictions, we reve rse the judgme nts of the trial court and rende r judgme nts of acquittal.

BACK GR OUND The State’s char g es ag ainst DeL ay stem from a series of political transac tions during the 2002 elec tion cy cle. See generally Ex parte Ellis , 279 S.W .3d 1 (Tex. App.—Au s tin 2008),

All citations to the Texas Penal and Election Codes are to the version of the codes as they 1 exis ted in 2002.aff’d , 309 S.W .3d 71 (Tex. Crim. App. 2010) (desc ribing fac tual b asi s of indictments ag ainst

defe ndants). Texans for a Republican Majority (TRMPAC), a Tex as gen era l-purpose political committee, rec eived donations from cor p o ra t i ons in excess of $190,000. See Tex. Elec. Code 2 § 251.001(14) (def

ining g ener al-purpose committee). Out of its bank acc ount in which it deposited the corpor ate funds, TRMPAC issued a chec k to the Republican National State Elections Commi ttee (RNSEC), a nonfede ral component of the Republ i ca n Na t i o nal Commi ttee, in the amount of $190,000. Approxim ately two wee ks later, RNSEC issued chec ks to seven Texas candida tes in the cumulative amount of $190,000. RNSEC deposited the chec k from TRMPAC into an acc ount that included corpor ate money (“sof t money ” acc ount) and funded the pay ments to the seven candida tes
out of a bank acc ount tha t did not inc lude corpor ate money (“ha rd money ” acc ount). RNSEC did 3
not transfe r funds betwee n these two acc ounts. The parties at times descr ibed this ty pe of exchang e, exchang ing sof

t money for ha rd money , as a mone y

“swa p.” 4
Ba sed on this combination of transac tions, DeL ay , toge ther with co-de fenda nts J ohn Coly andro and J ames Ellis, was initially indicted for conspirac y to violate provisions of the Election

The evidence at t rial was that TRMPAC raised over $500,000 from corporations d u ring 2 the 2002 elec tion cy cle. An accountant for TRMPAC testified at trial that “har d” dollars a re “ contributions from 3 individ u al s o r entities that are comprised of individuals” and “soft dollars are contributions from corpor ations or entities that have corpor ations” as any part of them. TRMPAC maintained separ ate acc ounts for har d and soft money

.

See Paul Fr

y mer & Al bert Yoon, Political Parties, Represe ntation, and Fede ral 4 Safeguards , 96 Nw. Univ. L

. Rev. 977, 998, 1009–10 (Spring 2002) (de fining and discussing role of soft and hard money in elec tions and prac tice of transfe rring soft money for hard money betwee n national par

ties and state a

nd local par

ties). 2C o de and for conspirac y to commit money launder ing. The State acc used the def en d an t s o f 5 “par ticipating in a scheme to channe l unlawful corpor ate political contributions to candida tes for the
Texas House of Re p re sentatives in 2002.” See Ex parte Ellis , 279 S.W .3d at 1. The trial court quashed the Election Code-base d conspirac y char g es, and the T ex as Court of Criminal Appea ls ultimately aff

irmed the trial court’s ruling

. State v. Colyandro , 233 S.W .3d 870, 870–71, 885 (Tex. Crim. App. 2007). DeL ay was then re- indicted on two counts, criminal conspirac y to commit money launder ing of funds of $100,000 or more and money launder ing of funds of $100,000 or more. The 6 predic ate offe nse for the State’s money launder ing char g e alleg ed the “off ense of knowing ly making

a political contribution in violation of Subchapter D of Chapter 253 of the Election Code.” See Tex. Elec. Code §§ 253.003(a) (“A person may not knowing ly make a political contribution in violation of this chapter .”); .091–.101 (Subchapte r D).

The jury trial occur

red i n No vember 2010. Calling over 40 witnesses, the State 7
prese nted evidenc e conce rning the political transac tions that formed the basis of its char g es, D e L a y ’s involvement with TRMPAC, RNSEC, and the transac tions, and his political moti v at i o n s for obtaining a Republican majority in the Texas L eg islature. As TRMPAC’s name sug g ests, it was formed for the purpose of supporting Republic an candida tes and to g ain a Republican majority in

Both Coly andro and Ellis wer e involved with T R M P AC ; Coly andro was its 5 executive direc tor. Ellis and Coly andro w ere also re- indicted, but their trials have not y et occ urre d. 6
E l lis and Coly andro filed pretria l habea s corpus applications involving constitutiona l 7 challeng es to the money launder ing statutes and cert ai n E l ec t ion Code provisions rela ting to corpor ate contributions. See generally Ex parte Ellis , 309 S.W .3d 71 (Tex. Crim. App. 2010). The Court of Criminal Appea ls found the challeng ed statutes fac ially constitutional. See id. at 81, 90, 92. 3the Texas L eg islature. DeL ay was a board member and raised funds for TRMPAC. DeL ay soug ht

a majority in the Texas L eg islature in part to acc omplish redistricting to incre ase the Republican deleg ation to the United States Congr ess.

The State’s theories included that the corpor ate donations to TRMPAC and DeL ay ’s “ag ree ment” with others to the money “swa p,” as descr ibed above, wer e unlawful corpor ate political contributions in violation of the Election Code. See id. §§ 251.001(1) (def i n i n g “contr ibution”), 253.003(a) (prohibiting political contributions in violation of Chapter 253), 253.094(a) (prohibiting
corpor ate contributions unles s au t h orized by Subchapter D). I t was the State’s position that
corpor ations contributed money to TRMPAC and that TRMPAC transfe rre d funds to RNSEC “with the intent that [t he funds] be used in connec tion with” a Texas campa ign for elec tive office , see id

. § 251.001(3) (def

ining “ca mpaig n contribution”), and that the Election Code prohibited them from doing so. B ased on the se allege d Election C ode viol ations, the State contende d that the cor porate funds wer e “dirty ”—i.e., the “proc eeds of criminal activity ”—and, there fore , the transfe r of “dirty ” funds from TRMPAC to RNSEC and then the subsequent transfe r from RNSEC to Texas candida tes of “cle an” funds co n s t i t u t ed money launder ing. See Tex. Penal Code § 34.02(a) (ele ments of
money launder ing)

. DeL ay did not dispute any of the tra nsfer -of- funds transa ctions or that the Elec tion Code prohibited corpor ations from making campa ign c ontributions to Tex as ca ndidates. De L ay ’s defe nsive theory , among others, was that none of the transfe rs was illega l—that they wer e structure d
to comply with t h e campa ign financ e laws—and, there fore , there wer e no proce eds of criminal activity to support money launder ing or the conspirac y to commit money launder ing. He contende d

4that trading soft money for hard money was leg al and commonly done by both political parties at that

time. He also disputed his level of involveme nt in the transac tions at issue.

The jury returne d a verdic t of gu i l t y o n both counts, and the trial court assessed
DeL ay ’s punishment a t c onfinement in the penitentiary for three y ear s on count one and five y ear s

on count two. The sentenc e for the second count was suspended and DeL ay was place d on community

supervision for te n y ear s.

ANALYSIS
DeL ay raises eig ht points of err or. I n his first and second points of err or, he contends that the evidenc e wa s leg ally insufficient to support the jury ’s ver dicts as to either c ount. 8
Legal Su ff

iciency of the Evid ence Fe dera l due proce ss require s that the State prove ever y element of the crime char g ed bey on d a re as o n able doubt. Jack son v. Virginia , 443 U.S. 307, 313 (1979); Byrd v. State , 336 S.W .3d 242, 246 (Tex. Crim. App. 2011). When r eviewing the sufficie ncy of the e vidence to

s u p p o rt a conviction, we consider all of the evidenc e in the light most favor able to the verdic t t o deter mine whether

any rational trier of fa ct could have found the e ssential elements of the offe nse bey ond a rea sonable doubt. Jack son , 443 U.S. at 319; Brooks v. State , 323 S.W .3d 893, 899 (Tex. Crim App. 2010).

His rema ining points of err or complain about err ors in the jury char g e, alleg e improper jury 8 arg ument, and raise constitutional challeng es to cer tain Election C o d e p ro visions and the money launder ing sta tute. 5We measure the sufficie ncy of the evidenc e by the elements of the offe nse as define d

in a hy pothetically corr ect jury char g e. Cada v. State , 334 S.W .3d 766, 773 (Tex. Crim. App. 2011); Malik v. State , 953 S.W .2d 234, 240 (Tex. Crim. App. 1997). Such a char g e is one that “ac cura tely
sets out the law, is authorized by the indictment, does not unnece ssarily incre ase the State’s burden of proof or unnece ssarily restric t th e State’s theories of liability , and adequately descr ibes the particula r offe nse for which the defe ndant was tried.” Byrd , 3 3 6 S.W .3d at 246 (quoting Malik , 953 S.W .2d at 240).

I n assessing the leg al sufficie ncy of the evidenc e, we have a duty “to ensure that the evidenc e prese nted actua lly supports a conclusion that the defe ndant committed the crime that was char g ed.” W

illiams v. State , 235 S.W .3d 742, 750 (Tex

. C ri m . App. 2007); see W infrey v. State , 323 S.W .3d 875, 882 (Tex. Crim. App. 2010). “I f the evidenc e establishes prec isely what the State has alleg ed, but the acts that the State has alleg ed do not constitute a criminal o ff en s e u n der the totality of t he circumstance s, then t hat evidence, as a matter of l aw, cannot s upport a convic tion.”
W illiams , 235 S.W .3d at 750.

Of fenses of Conspi racy and Money Laund ering Section 15.02 of the Pena l Code, criminal conspira cy , provides in re levant par t:
(a) A person commits conspirac y if, with inten t that a felony be committed: (1) he ag ree s with one or more persons that they or one or more of them eng age in conduct that would constitute the offe nse; and

6(2) he or one or more of them perf orms an overt act in pursuanc e of the a g ree ment.

Tex. Penal Code § 15.02(a) ; W illiams v. State , 6 4 6 S.W .2d 221, 222 (Tex. Crim. App. 1983) (desc ribing elements of c onspiracy offe nse).
As alleg ed i n this case , a person commits the offe nse of money launder ing “if the
person knowing ly

. . . conducts, supervises, or faci l i t at es a t ransa ction involving the proce eds of criminal activity .” Tex. Penal Code § 34.02(a) (2). “Proce eds” are define d to mean “funds acquir ed

or derive d direc tly or indirectly from, produce d throug h, or rea liz ed throug h an act.” Id

. § 34.01(4). “Criminal activity ” includes a ny offe nse cla ssified as a “ felony .” Id . § 34.01(1).
Allegations and P roof

Count one, the criminal conspira cy alleg ation, rea ds:
[O] n or about and betwee n the six th day of September , 2002, and the f ourth day of October , 2002,

. . .the defe ndants

. . . with intent that a felony be committed, to wit, with intent that the offense of money launder ing of funds o f t he value of $100,000 or more, a felony of the first degr ee , b e co mmitt ed, did ag ree with one or more persons, n amely , J ohn Dominick Coly andro,

. . . J ames Walter Ellis,

. . . Thomas Dale DeL ay . . . Tex ans for a Republican Majority PAC

. . . and the Republican Nation al C o m m i t t ee . . . that they or one or more of them eng ag e in conduct that would co n s ti tu

te th e afor esaid offe nse, and the defe ndant, J ohn Dominick Coly andro, J ames W alter Ellis , and the Republican National Commi ttee, did perf orm an overt act in pursua

nce of the ag ree ment, to wit: . . . .

The indictment listed 13 overt a cts: 1. On or about September 10, 2002, Coly andro sig ned the c heck f or $190,000 pay able to RNSEC from TRMPAC.

72. On or about September 10, 2002, Coly and ro d eli vere d the chec k to an acc ountant for TRMPAC.
3. On or about September 10, 2002, Coly andro instructed the acc ountant to send the che ck to Ellis.
4. On or about September 11, 2002, Ellis communicated with the chief of staff of the RNC and did “r equest a nd propose that, in exchang e for their re ceipt of a contribution of a c erta in sum of money ” fr om TRMP AC, the RNC a nd RN S E C would “make political contributions to seven candida tes for the Texas House of Repr esenta tives that were supported by ” TRMPAC.
5. On or about S ep t em b er 1 3, 2002, Ellis tender ed and delivere d the check to RNC.
6. On or about September 13, 2002, Ellis provided the chief of staff of the RNC with a document that containe d t h e names of seven Texas candida tes that wer e supported by TRMPAC with “sug g ested” amounts of contributions and Ellis “re quested and proposed” that the RNC and RNSEC “make political contributions in exchang e for the commi ttees’ rece ipt of t he procee ds from the af oresa id chec k.”
7-13. On or abou t Oc tober 4, 2002, the RNC and RNSEC issued chec ks in specifie d amounts to the campa igns f or the seve n candida tes.

The c heck f

rom TRMPAC t o RNSEC was included as a n exhibi t to the indictment. Count two, the money

launder ing a lleg ation, specific ally alleg ed in re levant par

t:
[The defe ndants] did knowing ly conduct, supervis e, and fac ilitate a transac tion i n volving the proce eds of criminal activity that constituted an offense classified as a felony under the laws of this state, to wit, the offe nse of knowing ly making a political contribution in violation of Subchapter D of Chapter 253 of t h e T ex as Election C ode, a felony

violation of chapte r 253.003 of the E lection Code; that the afor esai d transac tion consisted of the transfe r of funds of the ag g reg ate value of $190,000 from the [R

NC] and the [R

NSEC]

. . . to sever al candida tes for the Texas House of Re prese ntatives that wer e supported by [TR MPAC]

.

8The count further alleg ed that the defe ndants “conduc ted, supervised, and fac ilitated

the af oresa id transac tion by ”:
1. “neg otiating with” RNC’s chief of staff “for an ag ree ment, arr ang ement, and understanding wher eby [TR MPAC] would make a contribution of a cer

tain sum of money to the [R

NC] and [R

NSEC] and whe re by the [R NC] and [R NSEC] would make c ontributions to t he af oresa id candidate s;”
2. “providing ” RNC’s chief o f staff “with cer tain information conce rning contributions to be made by the [R NC] and [R

NSEC] to the said candida tes, to wit, the names of said candida tes and amounts that [TR MPAC] sug g ested be contr ibuted to eac h of the said c andidates;”
3. “sig ning the chec k repr oduced at the conclusion of this count;”
4. “tra

nsfer ring funds of the value of $190,000 from [TR MPAC] to [R NC] and [R NSEC] ; . . . .”

The count also alleg ed that “the value of the funds that constituted the afor esaid proce eds of criminal activity was $100,000 or more” and included a copy of the same chec k from TRMPAC pay able to RNSEC as was included with count one

.

As draf ted, both counts of the indictment require d the State to establish that there was

a felony criminal offe nse which g ener ated proce eds

. S ee T ex . Penal Code §§ 15.02, 34.02. The
State asser

ted that the underly ing or predic ate criminal offe nse was the violation of C h apter 253, Subchapter D, of the Election Code, specific ally section 253. 0 0 3

. See Tex. Elec. Code § 253.003(a) , (e) (making it third deg ree felony if person “knowing ly makes a political contribution” in violation of Subchapter D). A political contrib u t i o n i s d ef ined to include “a contribution to a candida te or political committee that is offe red or g iven with the intent that it be used in connec tion with a ca mpaig n for elective office.” Id

. § 251.001(3), (5). A contributi on is define d as “a direc t

9or indirect transfe r of money . . . and includes an ag ree ment made

. . . , whether leg ally enfor cea ble

o r n o t , t o make a transfe r.” Id

. § 251.001(2). “[A] pay ment or transfe r to a campa ign or politic al

co m mittee is not a ‘political contribution’—and there fore , not reg ulated by the elec tion code at all—if it is not ‘off

ere d or given with the i ntent th at i t b e u s ed i n connec tion with a campaig n for elec tive office or on a me asure .” Ex parte Ellis , 279 S.W .3d at 9.

Thoug h not asser

ted at trial, the State urg es on appea l that the corpor ate pay ments to TRMPAC violated the Election Code beca use most of the donations wer e g iven without desig nating

a particula

r use for the donation or wer e g iven with the intent tha t they be used in c onnection with

a Texas campa ign. Although most of the corpor ate donations to TRMPAC did not include a specific desig nation or limit ation on how TRMPAC used the funds, witnesses from th e co rporations that
g ave money to TRMPAC uniformly testified that they intended to comply with the law and that they made their respe ctive donations with the intent that they be used for lawful purposes. See Ex parte 9 Ellis, 309 S.W .3d 71, 90 (Tex. Crim. App. 2010) (noting require ment in Election Code “that a contributor have a cer

tai n i n t en t b ef

ore the contribution is deeme d illega l”). “The State has the 1 0

The evidenc e at trial was that the corpor ations primarily g ave money to TRMPAC to show 9 their support of DeL ay . Most of the corpor ate repr esenta tives also testified that they hoped to have t h e opportunity to have “fa ce time” with DeL ay to discuss policy , educate him on their particula r issues of conc ern, a

nd build a rela tionship wit h him. I n that case , the Texas Court of Criminal Appeals was addre ssing subsection (b) of 1 0 2 5 3 .003, as well as other sections of the Election Code. See Ex parte Ellis , 309 S.W .3d at 8 6

. Subsection (b) states: “A person may not knowing ly acc ept a political contribution the person knows to have been made in violation of this chapte r.” Tex. Elec. Code § 253.003(b). Thus, the court was addre ssing unlawfully acc epting a contribution rathe r than unlawfully making a contribution. I n any event, we find the provisions’ mens re a re quirements ar e not dissimil ar. 10burden to prove the applicable culpable mental states, and if it cannot, then a defe ndan t char g ed

under [the Elec tion Code provisions at issue] is entitled to an acquittal.” Id

.

All corpor ate contribu t i o n s wer e deposited in a separ ate, desig nated acc ount by
TRMPAC. Corporate contributions to a g ener al purpose Texas political committee could lawfully be spent to financ e the c ommitt ee. T he State’s f orensic a naly st testified:
Q. Did y ou see a single chec k out of that acc ount that the $190,000 went into to a sing le ca

ndidate in Texas?
A. No. Q. Fur

thermore , there wer e no transfe rs from that acc ount to the acc ount from which the c hecks w ere written to the ca ndidates in Texas, was ther e?
A. That’s c orre ct. Q. I f there ’s been testimo n y ab o u t a firew all, meaning that there was a strict division betwee n that corpor ate ac co u n t wh ere the 190 went and the other acc ount where t he checks were written to the Tex as candidates came from, that’s a fair char acte rization, isn’t it? No transfe rs betwee n the two, never the money mix ed, rig ht?
A. I didn’t see tra

nsfer s betwee n the two ac counts.

As the Ethics Advisory Opinion offe red into ev i d en ce b y the State explains, “Contributions that

s u p p ort the opera

tion of a g ener al-purpose committee ultimately support the car ry ing- out of t h e committee’s principal purposes, including the making of political e x penditures in c onnection with elec tions and officeholder assistance .” See Texas Ethics Advisory Opinion 132 (1993). And as 1 1

Opinion No. 132 was the only Ethics Advisory Opinion admitted in evidenc e and revie wed 1 1 by the jury during delibera tions. See Tex. Ethics Advisory Opinion N o. 132 (1993) (Exhibi t 155)

. But Opinion No. 132 relied on Ethics Advisory Opinion No. 32 (1992) for the statement that a 11the trial court char g e instructed: “The Election Code does not pr ohibit a corpor ation from making

contributions and expenditures in connec tion with elec tions and measure s in states other than Texas.
A g ener al purpose political committee may use corpor ate contributions that it rec eives to make any contribution or expenditure that a c orpora tion could make.” The State does not di s p u te that the law allowed corpor ate contributions to
g ener al-purpose political action committees for administrati v e ex p enses. Practica lly speaking , lawful corpor ate contributions to the administration of a committee ult i m at ely support the committee’s principal purpose, and funds g iven for the administration are not transfor med into “proc eeds o f cr i m i nal activity ” mere ly beca use the funds wer e from corpor ations. Nor are funds illega l mere ly beca

use the corpor ate contributions allowed individual contribu t i o ns to be used to support candida tes.

The State does n o t co n tend that the corpor ations wer e prohibited from making donations to TRMP AC or that TRMPAC was prohibited from transfe rring those funds for use out of state. See Tex. Ethics Advisory Opinion No. 277 (1995) (“Title 15 of the Election Code does not prohibit a Texas corpor ation from making contributions and expenditur es i n connection with

corpor ation which contributes money to the administration or establishmen t o f a g ener al-purpose committee must be clea

rly identified in the name of the committee. See Tex. Et h i cs Advi sory Opinion No. 132 & n.3 (1993). TRMPAC did not include any corpor ation’s name in its name. At the j ury members’ reque st, the judg e g ave them Opinion No. 132 to rea d as t hey delibera ted. But the Texas Ethics Commi ssion had reve rsed its position and overr ul ed Op inion No. 32 in Ethics Advisory Opinion No. 145 (1993), which provides: “A g ener al-purpose committee is not require d to include the name of a leg al entity in its name simply beca use the leg al entity

contributes money for the establishment or administration of the committee.” Tex. Ethics Advisory Opinion N o. 145 (1993). The jury was not told Opinion No. 32 had been overr uled or that the Ethics Commi ssion had reve rsed its position. 12elec tions in other states.”) ; T ex. Ethics Advisory Opinion N o. 208 (1994) (“I t is clea r . . . from the
Texas campa ign financ e laws taken as a whole, that the office s and campa igns ref err ed to are Texas office s and Texas campa igns.

. . . There fore we conclude that the leg islature did not intend to require that g ener al-purpose political committees repor t political expe n d itures made in connec tion with out-of-state campa igns, office holders, or measure s.”). Given the testimony of the corporate
repr esenta tives and the undisputed fac ts that the corpor atio n s co u ld lawfully make donations to TRMPAC and TRMPAC could lawfully transfe r the corpor ate funds out of state, the State failed to prove the “applica

ble culpable mental states” for the donating corpor ations to support a finding of criminal intent by

the cor porations. See E

x parte Ellis, 309 S.W .3d at 90. 1 2

The S t at e fo cuses on brochur es, forms, and letters by TRMPAC soliciting donations. 1 2 TRMPAC’s st atements in broc hures, f orms, and letter s included the following :

• TRMPAC is focuse d o n ra ising and g iving funds direc tly to Republican candida tes for state house, state senate , and potentially all statewide office s.

• Your support today will go dire ctly

to help Republican c andidates in Te x as succe ssfully

run and w in their ca mpaig ns.

• All contributions, whether to the PAC or individuals, will be used for direc t campa ign e x penses.

• Unlike other org anizations, y our corpor ate contribution to TRMPAC will be put to productive use. Rather than just pay ing for overhe ad, y our support will fund a series of productive and innovative activities desig ned to incre ase our level of e ng ag ement in the political ar ena. Howeve r, we note that these materia ls solicited donations from individuals as well as corpor ations. I n addition, these statements by TRMPAC addre ss TRMPAC’s intentio n s , not the corpor ations’ intentions. The corpor ate repr esenta tives testified that they assumed that their donations would be used for lawful purposes and, as previously stated, that they soug ht to support DeL ay and hoped to obtain acc ess to DeL ay . 13To support its position that the majority of corpor ate contributions v iolated the

Election Code by

not expressly

desig nating a lawf

ul use of their dona tions to TR MPAC, the St ate focuse s on the following clause from the opinion in Ex parte Ellis : “ther e is no such thing as a leg al undesig nated corpor ate political contribution.” Id

. at 88. We believe that the State takes this clause
out of context. I n that case , the court was addre ssing constitutional challeng es to the Election Code. The clause cited by t h e S t at e was made during the court’s examination of section 253.100, the section of the Election Code addre ssing the establishment of a g ener al-p u rp o s e comm ittee by a
corpor ation and in response to a possible sug g estion made b y t h i s C o urt. The Court of Criminal Appea ls stated:

To the extent that the court of appea ls may have sug g ested that there is no such thing as an undesig nated corpor ate political c ontribution, the err or it made was minor. I t would be mo re ac cu ra t e to say that there is no such thing as a leg al undesig nated corpor ate political contribution. I ndividuals can leg ally make undesig nated political contributions, but corpor ations cannot. A corpor ation must desig nate the purpose of the political contribution by contributing to a political committee that is exclusively devoted to measure s, by making expenditures for maintenanc e or opera tion of a corpor ate political commi ttee, or by contributing to a political party under cer tain narr owly define d conditions.

Id

. We also note that, althoug h the Election Code prohibits a corpor ation from making contributions unless authorized by Subchapter D, it does not require a corpor ation to repor t or expressly desig nate the uses that it authorizes when making a donation. See generally Tex. Elec. Code §§ 253.091–.104; Spence v. State , 325 S.W .3d 646, 650 (Tex. Crim. App. 2010) (foc using on “litera l text to deter mine the objective meaning of that text at the time of its enac tment” when interpre ting statutes); see also State v. Rhine , 297 S.W .3d 301, 309 (Tex

. C ri m. App. 2009) (quoting State v. Johnson ,

14219 S.W .3d 386, 388 (Tex. Crim. App. 2007), for principle that “cr iminal statutes outside the penal

code must be c onstrued strictly , with any doubt resolved in fa

vor of the a ccuse d”). The State’s primary ar gu m ent at trial was that the Election Code violation that
g ener ated criminal proce eds was the “ag ree ment” betwee n DeL ay and others to the combined transfe rs of funds, i.e., the money swap of soft money for hard money . The State arg ued in its final
arg ument: “[T] h e m o m en t t h at the decision was made to send the soft dollar chec k up to Washington D.C. with the intent that it ultimately g o to candida tes for elec tive office is the moment that this money beca

me proce eds of criminal activity .” Rely ing on the use of the word “indirec t” 1 3
in the Election and Penal Code statutes at i s s u e, t h e S t ate arg ues that the “ag ree ment” to the combined transac t i ons itself was an illega l contribution and thus the corpor ate funds sitti ng in
TRMPAC’s bank acc ount at the moment of the ag ree ment beca me the proce eds of criminal activity

. See Tex. Elec

. Code § 251.001(2) (def ining “contr ibution” to include “indirec t tr ansfe r of money ” and “ag ree ment

. . . to make a transfe r”)

. Howeve r, the State fails to explain how the funds alre ady in the bank acc ount resulted from the subsequent money -swap ag ree ment. See Tex. Penal Code § 34.01(4) (def

ining “proc eeds” to include “fu n d s acquir ed or derive d direc tly or indirectly from, produce d throug h, or rea liz ed throu gh

. . . an act” ). Fur ther, to support this arg ument, the State disreg ards the distinction betwee n soft and har d money acc ounts as irrele vant, ar g uing: “The fact that the funds wer e not commingle d is simply irrele vant in light of the expli cit one-f or-one exchang e which was neg otiated in this case .” But in the context of the campa ign financ e regula tions,

I n its brief, the State urg es: “The funds [criminal proce eds] themselves wer e the corpor ate 1 3 money held in TRMPAC’s ‘soft money ’ acc ount, which beca me criminal when TRMPAC struck a dea l with the RNSEC to exchang e the money for c ontributions directly to Texas candidates.” 15maintaining separ ate, seg reg ated bank acc ounts for soft and hard money is rec og nized and acc epted

as leg itimate. See, e.g ., 11 C.F.R. 102.5 (authorizing “ org anizations financing political activity in

connec tion with Fe dera l and non-F eder al elec tions” to maintain separ ate bank acc ounts for hard and soft money

); EMILY ’s List v. Fede ral Election Comm’n , 581 F.3d 1, 12–13, 17–18 (D.C. Cir. 2009) (discussing distinction and authorization of hard and soft money acc ounts in context of hy brid nonprofit); Carey v. Fede ral Election Comm’n , 791 F.Supp. 2d 121, 125, 131–3 2 (D.D.C. 2011) (discussing distinction and authorization of “sepa rate ” hard and soft money acc ounts in c ontext of fede ral political action committee and concluding that “maintaining two separ ate acc ounts i s a perf ectly leg itimate and narr owly tailored m ea ns to ensure no cross-ove r betwee n soft and hard
money ”).
Her e, the evidenc e was undisputed that the RNSEC issued chec ks to the seven Texas candida tes from a

hard mone y

acc ount that was sepa

rate from it s soft money

acc ount. Thus, the

1 4

so u rc es o f the funds in the hard money acc ount wer e not “indirec tly ” from corpor ations but from

s o u rces such as individuals who wer e not prohibited from making campa ign contributions. See 1 5
EMILY ’s List , 581 F.3d a t 12 & n.11 (desc ribing allowed sourc es of f unds in soft and hard mone y

acc ounts and noting that corpor ate donations may not be place d in hard money acc ount). As to the
f u n d s that wer e transfe rre d from TRMPAC to RNSEC, the Election Code does not prohibit corpo r a te

The State’s fore nsic analy st who revie wed the rec ords of TRMPAC and RNSEC 1 4 acknow ledg ed that the $190,000 to the Texas candida tes was from a s ep ar ate, non-cor porate RNSEC account.

A witness who worke d for the Republican party testified that the aver ag e persona l 1 5 donation to the Republican party was “proba bly about $80,” that the acc ounts with corpor ate money and persona l money wer e “fire walled o ff from eac h other,” and that the corpor ate funds sent by TRMPAC t o RNSEC di d not come bac k to Texas. 16funds from being sent out of Texas, RNSEC place d the funds in a soft money acc ount, and RNSEC’s

acc ounts were not commingled. See id. ; see also Tex. Ethics Advisory Opinion Nos. 208, 277. 1 6
We a lso que stion the validity of the State’s “ ag ree ment” theor y . I t w as not a crime
to conspire to violate the Election Code in 2002. See Colyandro , 233 S.W .3d at 870–71, 885. And,

even if it was, the evidenc e does not support a finding that there was an “ag ree ment” to illega lly transfe r corpor ate money to Texas candida tes

. There was no evidenc e that TRMPAC or RNSEC
trea ted the corpor ate funds as any thing but what they wer e, corpor ate funds with limit ed uses under
campa ign financ e law. Rather, when viewed in the light most favor able to the verdic t, the evidenc e showed an ag ree ment to two leg al monetary transfe rs: that TRMPAC transf er corpor ate money to RNSEC for use in other states and not in Texas in exchang e for RNSEC transfe rring funds to Texas candida tes out of a hard money acc ount. Rather than supporting an ag ree ment to violate the Election Code, the evidenc e shows that the defe ndant s wer e attempting to comply with the Election Code limit ations on corpor ate c ontributions.

Fur ther, the State’s “ag ree ment” theory depends upon the combination of the
transac tions, c onflating the predic ate criminal activity , the making of “an ag ree ment

. . . to make a transfe r” in violation of the Election Code, with the money launder ing transac tion. See, e.g. , United
S t ates v. Harris , 666 F.3d 905, 908–09 (5th Cir. 2012) (describing money launder ing convicti o n s

The jury was instructe d: 1 6
The Election Code does not prohibit a corp o ra t i on from making contributions and expenditures in connec tion with elections and mea sures in states other than Texas.
A g en er al p urpose political committee may use corpor ate contributions that it rec eives to make any

contribution or expenditure that a c orpora tion could make.

17that failed be cause , among other reasons, “the unlawful act was not y et complete”); United St ates

v. Butler , 211 F.3d 826, 829 (4th Cir. 2000) (noting that fede ral money launder ing statute “tar g eted only those transa ctions occur

ring afte r proc eeds ha

ve bee n obtained fr om the underly ing unla wful activity ” and n o t i n g t h at funds are “cr iminally derive d” if they are “der ived from an alre ady completed offe nse, or a completed phase of an ong oing offe nse” (citations omitted)); United States

v. Mankarious , 151 F.3d 694, 706 (7th Cir. 1998) (“[T]he predic ate offe nses must produce proce eds befor e any one can launder those proce eds.”) ; United States v. Edgmon , 952 F.2d 1206, 1214 (10th Cir. 1991) (“Cong ress aimed t h e cr i m e o f money launder ing at conduct that follows in time the underly ing crime rathe r than to aff ord an alterna

tive means of punishi ng the prior ‘spec ified unlawful activity ’.

. . . We find that Congr ess intended money launder ing and the ‘spec ified unlawful activity ’
to be separ ate offe nses separ ately punishable.”)

. Money launder ing and Election Code violations 1 7

are differ ent offe nses. The Texas money launder ing statute, as applied here , is not simply an alt er native means of punishing the alleg ed predic ate offe nse. Money launder ing is a subsequent

o ff en s e separ ate from the alleg ed criminal activity that is its predic ate offe nse. See, e.g. , United States v. Christ o , 129 F.3d 578, 579–81 (11th Cr. 1997) (re versing fede ral money launder ing conviction wher e the “ withdrawa l of funds char g ed as money launder ing w as one a nd the same a s the underly ing criminal activity of bank fra ud and misapplication of bank funds”)

. Her e, the funds

wer e only “der ived from” the money -swap ag ree ment afte r the transac tions wer e complete, if at all.

The fede ral money launder ing statute was passed “to criminalize the means criminals use 1 7 to cleanse their ill-g otten g ains.” United States v. Sav age , 67 F.3d 1435, 1441 ( 9th Cir. 1995). 18Finally , even if we wer e to conclude that the corpor ate donations to TRMPAC or the

ag ree ment itself to the series of money transfe rs violated the Ele ction Code, the State’s c harg es as

s t at ed in the i ndictment wer e ti ed to the t ransf er from RNSEC to the s even Texas candida tes. As stated above, the RNSEC issued the chec ks to the candida tes from a separ ate, seg reg ated acc ount—a hard money acco u n t

— wh i ch did not include corpor ate money . Compare United States v. Loe , 248 F.3d 449, 466–67 (5th Cir. 2001) (dist inguishing “cle an” and “dirty ” money in same ac co u n t in context of fede ral money launder ing char g es); United States v. W ard , 197 F.3d 1076, 1083 (11th Cir. 1999) (“When money is commingle d, ‘the illicitl y -ac quired funds and the leg itimately -ac quired funds

... cannot be distinguished from eac h other....’” (citat i o n omitted)), with EMILY ’s List , 581 F.3d at 12 & n.11 (re cog nizi ng prac tice of maintaining separ ate, seg reg ated acc ounts in context of campa ign financ e laws). The source s of the funds in RNSEC’s hard money ac co u n t , s u ch as contributions from individuals, wer e not “tainted.” RNSEC deposited the corpor ate funds of $190,000 in a soft money acc ount and those funds wer e n o t commingle d with the hard money

acc ount or otherwise used in Texas. Thus, the State failed in its burden to prove that the funds that

wer e d el i v ered to the seven candida tes wer e ever tainted. See Tex. Penal Code § 34.02(a) (2);
W illiams , 235 S.W .3d at 750 (evide nce prese nted must actua lly support a conclusion that defe ndant committed the crime tha t was cha rg ed). The defic iency of the State’s case is illust rate d by the confusion display ed by the jury during delibera

tions. The money launder ing statute re q uired the State to prove that the funds involved in the transac tion wer e the “proc eeds of criminal activity .” See Tex. P en al Code § 34.02(a) (2). Essentially , if the funds wer e not “proc eeds of criminal activity ,” the s u b s eq u ent

19transac tion was not money launder ing. See, e.g. , K i ng v. State , 254 S.W .3d 579, 580–85 (Tex. App.—Amar illo 2008, no pet.) (holding evidenc e leg ally insufficient, and distinguishing case wher e there was “a nexus betwee n the money and some criminal activity that had previously taken place ”);

see also United Sta t es v. B u tler , 211 F.3d 826, 830 (4th Cir. 2000) (“Put plainly , the launder ing of funds cannot occur in the same transac tion throug h which those funds first become tain t ed by crime.” ). During delibera tions, the jury asked the trial judge that question of law in this way : “Can it constitute money launder ing if the money wasn’t procur ed by illega l means orig inally ? ” The

re q u es t for an instruction on the law was proper . See Tex. Code Crim. Proc. art. 36.27 (The trial
court “shall answe r any such commun i ca t i o n i n writing .”); Gamblin v. State , 476 S.W .2d 18, 20 (Tex. Crim. App. 1972) (The statute “re quires the court to answe r communications of the jury and
g ive additional instructions upon questions of law when the reque st is proper .”). The proper answe r
to the question is “no.” The jury ’s question about t h e l aw wa s not answe red, howeve r; the court simply ref err ed the jury

to the court’s c harg e. L ater , during delibera tions, the jury asked the question ag ain: Does the money “have
to be il leg al at the s tart of the t ra nsaction.” Ag ain, t he question was a proper one, and the answer to that re- phrasing of t he same question is “y es.” O therwise, the funds would not be “pr ocee ds of criminal activity .” But the prosec utor arg ued to the trial judge t h at t h e m o n ey could be obtained leg ally and still be launder ed. The trial court did not answe r the jury ’s question of law, b u t once
ag ain simply

ref err ed the jury

to the jury

char g e that wa s questioned.

20Whil e the jury was in the jury room delibera ting, the prosec utor, addre ssing the jury ’s

questions, arg ued to the trial judg e:

W el l, Your Honor, I fee l a littl e bad for the jury beca use I think it is evident fr o m their questions that they

are confuse d about the law.

. . . . And they are just expected to be arbitra tors of the fa ct s , n o t t h e law. And I think we’v e p u t t h em in an uncomforta ble position of try

ing to decide what the law is, which is not their job.

As the prosec utor commented, the jury should not have been place d in the “uncomf ortable position of try ing to de cide wha

t the law is, which is not their j ob.” The jury ’s questions to the trial judg e, along with the prosec utor’s arg ument in re sponse, point to the lack of evidenc e showing that the funds involved in the transac tion wer e the proce eds of criminal activity

. The State did not prove the funds wer e “illeg al at the start of the tran s ac t i o n ” or “proc ured by illega l means orig inally ,” as phrase d by the jury in the two questions about the law. The lack of leg ally sufficie nt e vidence that the funds we re “ proce eds of c riminal activity ” re quires an a cquittal.

CONCLUSION
Ba sed on the totality of the evidenc e, we conclude that the evidenc e prese nted does
not support a conc l u s i o n that DeL ay committed the crimes that wer e char g ed. See
W illiams, 235 S.W .3d at 750; see also United States v. Grossman , 117 F.3d 255, 261 (5th Cir. 1997) (conc luding that evidenc e leg ally insufficient to sustain conspirac y co u n t w h e r e e vidence was leg ally insufficient to sustain substantive counts forming basi s for object of conspirac y ); United States

21v. Mac ka

y , 3 3 F.3d 489, 494 (5th Cir. 1994) (“A conspirac y conviction require s proof of an
ag ree ment to c ommit a crime.” ). The fundame ntal problem with the State’s case was its failure to
prove proce eds of criminal activity

. We sustain DeL ay ’s first and second points of err or. Due to our resolution of these two g rounds, we do not r eac h DeL ay ’s re maining points of e rror .

Be cause we conclude that the evidenc e wa s leg ally insufficient to support De L ay ’s convictions, we r ever se the judg ments of the trial c ourt and re nder judg ments of ac quittal.

__________________________________________ Melissa Goodwin, Jus tice
Be fore Chief J ustice Jones, J ustices Goodwin and G aultney *; Dissenting O pinion by

Chief J ustice Jones
Reverse d and Rende red Filed: September

19, 2013 Publis h * Be fore David Gaultney , J ustice, Ninth Court of Appea ls, sitti ng by assig nment. See Tex. Gov’t Code § 74.003(a)

.

22