A Texas judge on Tuesday allowed a grand jury investigation into possible criminal activity during the 2002 Lone Star State elections — including actions taken by a political action committee linked to House Majority Leader Tom DeLay (R-Texas) — to proceed over objections from groups caught up in the probe.

Travis County District Attorney Ronnie Earle is looking into whether the Texas Association of Business — and by extension, Texans for a Republican Majority, a PAC founded by DeLay — illegally used corporate donations to secretly finance a nearly $2 million advertising campaign during last year’s state elections. Texas law prohibits the use of corporate funds in state elections.

TAB officials reportedly boasted that they had helped elect Republicans to the state Legislature, but then refused to disclose the source of the money used to pay for their ad campaign. The business group also allegedly coordinated closely with Texans for a Republican Majority, which has raised a large portion of its funds from corporate donors.

Republicans in the Texas Legislature were able to elect state Rep. Tom Craddick (R) as Speaker thanks to their victories in the fall races, boosting their chances of controlling the Congressional redistricting process in the Lone Star State. DeLay and other Texas Republicans are seeking to oust as many as four Congressional Democrats in the November 2004 federal elections.

The Texas Association of Business had challenged the legality of subpoenas issued by the Travis County grand jury, arguing that Earle was infringing on the organization’s free speech and association rights, and slamming Earle for “bad faith” in conducting the investigation, which it labeled a “political witch hunt.”

But Travis County Judge Mike Lynch rejected TAB’s arguments, although he set very careful ground rules for the probe to continue.

“Without relying on or validating any one specific theory advanced by the State, the Court finds that [a] bonafide grand jury investigation is in progress,” wrote Lynch. Lynch, though, limited the probe to corporate donors and records.

Lynch will also prevent any elected official from being called before the grand jury without Earle first “demonstrating the necessity” of such a move.