A Texas judge ruled Thursday against a political action committee founded by House Majority Leader Tom DeLay (R-Texas), holding in a civil case that Texans for a Republican Majority PAC should have reported more than $532,000 in corporate contributions during the 2001-02 election cycle. Judge Joseph Hart also awarded five state Democratic candidates more than $196,000 in damages.

Hart’s ruling, laid out in an outline of his findings this morning, seems sure to cause new political headaches for DeLay, although it is still unclear what it will mean for him legally.

While DeLay is not named in Hart’s decision, a senior House GOP leadership aide familiar with the decision acknowledged that “it’s not good news” for the Texas Republican.

DeLay’s office declined to comment on Hart’s decision.

House Democrats were very pleased.

“The judge’s ruling speaks for itself. Tom DeLay’s political action committee clearly violated the law,” said a House Democratic leadership staffer. “At the end of the day, he’ll have to take full responsibility for that.”

Hart ruled on the narrow issue of whether TRMPAC and its treasurer, Bill Ceverha, should have reported to Texas election officials hundreds of thousands of dollars in campaign contributions from corporate donors. Hart found that TRMPAC’s failure to report the donations, as well as the way in which the organization then spent those funds, violated Texas law.

Hart did not rule on the issue of whether TRMPAC could accept or spend the corporate funds.

Terry Scarborough of Hance Scarborough Wright Woodward & Weisbart, Ceverha’s lawyer, immediately said his client would appeal the ruling to the Texas Supreme Court once Hart issues a final decision (today’s decision was only a finding by the judge). “We feel strongly this decision is wrong,” Scarborough said in a statement released by his office. “We will vigorously appeal this ruling immediately if Judge Hart allows us to do so.”

The lawsuit was brought by a number of Democratic candidates for state office following the 2002 elections. In that campaign, Republicans won control of the Texas Legislature for the first time since Reconstruction, and were then able to push through a Congressional redistricting map that helped GOP candidates oust four Democratic Members from the House.

Texas Democrats objected to TRMPAC’s role in that campaign, charging that the group violated state law by using corporate funds in state legislative races. There is also an ongoing criminal investigation of TRMPAC, and several DeLay allies and corporations that gave to the group have been indicted. It is unclear what impact today’s ruling will have on the criminal probe, although early predictions are that it will strengthen Travis County District Attorney Ronnie Earle’s hand in that case. DeLay himself has not been subpoenaed or indicted in Earle’s investigation.

TRMPAC said the corporate funds were only used for administrative expenses incurred during the 2001-02 cycle and not spent directly on campaigns for political office. The use of corporate funds for state legislative races is illegal under Texas law.

Hart, though, rejected TRMPAC’s position. “I find that the contributions were intended to be used in campaign for elective office,” Hart wrote. He added: “I find that all of the expenditures by TRMPAC were made ‘in connection with a campaign for elective office’ and fit within the statutory definition of ‘campaign expenditure.’”

Hart awarded $196,600 to five state Democrats who claimed they lost their races due to TRMPAC’s actions. The biggest award of $87,332 went to Ann Kitchen.