DeLay was found guilty of money laundering and conspiracy to commit money laundering for helping illegally funnel corporate money to Texas candidates in 2002. He was sentenced to three years in prison, but his sentence was on hold while his case made its way through the appellate process.
The Texas 3rd Court of Appeals said the evidence was "legally insufficient," and in a 2-1 ruling decided to "reverse the judgments of the trial court and render judgments of acquittal."
DeLay's attorney, Brian Wice, told The Associated Press that DeLay felt validated by Thursday's ruling.
"He's ecstatic. He's gratified. He's just a little bit numb," Wice said. "I'm hoping with today's victory, he will be able to resume his life as he once knew it."
Wice said the state could appeal to the Texas Criminal Court of Appeals, the state's highest criminal court. Wice said he was confident DeLay would win again if necessary.
A jury in Austin had determined that DeLay conspired with two associates, John Colyandro and Jim Ellis, to use his Texas-based political action committee to send a check for $190,000 in corporate money to an arm of the Washington-based Republican National Committee. The RNC then sent the same amount to seven Texas House candidates. Under state law, corporate money cannot be given directly to political campaigns.
Prosecutors said the money helped the GOP take control of the Texas House, enabling them to push through a DeLay-engineered congressional redistricting plan that sent more Republicans to Congress in 2004, strengthening his political power.
But in a 22-page opinion, the appeals court said prosecutors "failed in its burden to prove that the funds that were delivered to the seven candidates were ever tainted."
Gregg Cox, the Travis County prosecutor whose office convicted DeLay, did not immediately return a phone message Thursday.
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