By DAVID LEONHARDT, The New York Times, August 11, 2005

12 Aug 2005 // A political action committee run by the House majority leader, Representative Tom DeLay of Texas, broke election law by paying expenses from the wrong account, an audit by the Federal Election Commission has found. By doing so, the committee effectively increased the amount of money it could spend on Congressional races in the 2002 campaign.

The committee, Americans for a Republican Majority, or Armpac, should have paid $203,000 in administrative expenses for 2001-2 with money designated for federal campaigns, known as hard money, rather than with other, soft-money funds that it actually tapped, according to the audit, released this week.

Under the law at that time, Armpac was required to cover 93 percent of its administrative expenses with hard money because 93 percent of its campaign spending was directed at federal races. Instead, the committee split its administrative expenses evenly between hard-money and soft-money accounts, leaving itself more to spend on federal races.

The audit also found two accounting violations, which Republicans and Democrats agreed were less significant than the administrative-expense issue. But it did not find any illegal contributions, generally considered the most severe of election-law violations.

Mr. DeLay's fund-raising activities have previously come under scrutiny both in Washington, where Democrats have called for an ethics inquiry centering on his dealings with lobbyists, and in Texas, where a state prosecutor has obtained indictments charging three of his allies with funneling corporate money to legislative campaigns.

On Thursday, Democrats and Republicans reacted in predictably different ways to the findings on his political committee.

Donald F. McGahn II, a lawyer for Armpac, said the violations were honest mistakes and largely technicalities. The committee has since repaid the $203,000 in question, Mr. McGahn said, by transferring it from a federal-election account to an inactive soft-money account.

"There's no substantive violation," he said. "There's none of the stuff that's big trouble. It's very minor and specific."

Jan Baran, a leading Republican election lawyer not involved in the matter, called the violations a kind of sloppiness and said the audit showed "no smoking guns of intentional illegality."

Democrats, however, said the amount of money involved in the violation concerning the different accounts made it look like more than a simple mistake.

"This wouldn't rank as a simple case of someone stepping slightly over the threshold," said Robert Bauer, a Democratic lawyer at the firm of Perkins Coie. "It's someone stamping the door down."

Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, a group with Democratic ties, said the severity of the violations could be seen in the official list of the report's recipients: the auditors sent a copy to the general counsel of the Federal Election Commission.

"This is a big deal," Ms. Sloan said.

Mr. McGahn, the Armpac lawyer, noted that the campaign finance law passed in 2002 eliminated the type of soft-money accounts involved in this case. So a similar error cannot happen again, he said.

Democrats, on the other hand, said a change in law did not excuse an earlier violation of it.

As for the two accounting violations, Armpac misstated the amount of cash it held in a bank account and failed to record $322,000 in debts, mostly to direct-mail companies. The committee has since amended its reports to address those violations.

As is standard, the election commission said it reserved the right to fine Armpac, or not to fine it.