The 3rd Texas Court of Appeals formally acquitted the Texas Republican of all charges, finding prosecutors used "legally insufficient" evidence to convict him in 2010 of money laundering and conspiracy to commit money laundering. Prosecutors accused DeLay of attempting to influence the 2002 election in Texas by funneling corporate money to candidates through his political action committee, Texans for a Republican Majority.
He had been sentenced to three years in prison, but had been free pending the results of his appeal.
The appellate court rejected the state's contention the election law violations occurred when DeLay and others tried to swap "soft money for hard money" in transferring funds from an account used for general expenses to one used to contribute to candidates' campaigns, the Houston Chronicle reported.
"However, the state fails to explain how the funds already in the bank account resulted from the subsequent money-swap agreement," said Justice Melissa Goodwin, writing for the majority. "Further, to support this argument, the state disregards the distinction between soft and hard money accounts as irrelevant."
The court said "maintaining separate, segregated bank accounts for soft and hard money is recognized and accepted as legitimate."
Justice David Gaultney concurred in the ruling, writing, "the fundamental problem with the state's case was its failure to prove proceeds of criminal activity."
Chief Justice J. Woodfin Jones dissented.
The Travis County District Attorney's Office issued a statement saying prosecutors "strongly disagree with the opinion of Judges (Melissa) Goodwin and (David) Gaultney that the evidence was insufficient."
"We are concerned and disappointed that two judges substituted their assessment of the facts for that of 12 jurors who personally heard the testimony of over 40 witnesses over the course of several weeks and found that the evidence was sufficient and proved DeLay's guilt beyond a reasonable doubt," the statement said. "We are preparing a response to this opinion and will ask the full Texas Court of Criminal Appeals to review the ruling."
DeLay was elected to the Texas House of Representatives in 1978 and to the U.S. Congress in 1984. He was elected majority leader in 2002.