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An appeals court in Texas has overturned the 2010 conviction of former House Majority Leader Tom DeLay, who had been found guilty of illegally funneling corporate money to Texas candidates during the 2002 campaign cycle.

DeLay, a Republican, had been out on bail while appealing his conviction and the three-year prison sentence he was handed afterward.

But in a 2-1 ruling released Thursday, the state's Third District Court of Appeals says "we conclude that the evidence presented does not support a conclusion that DeLay committed the crimes that were charged. ... The fundamental problem with the State's case was its failure to prove proceeds of criminal activity."

The court found that a political action committee DeLay created, which was at the center of the case, could accept donations from corporations and that the PAC "could lawfully transfer the corporate funds out of state." Therefore, the judges write, "the State failed to prove the 'applicable culpable mental states' for the donating corporations to support a finding of criminal intent by the corporations."

What's more, the appeals court says:

"There was no evidence that [the PAC] or RNSEC [the Republican National State Elections Committee] treated the corporate funds as anything but what they were, corporate funds with limited uses under campaign finance law. Rather, when viewed in the light most favorable to the verdict, the evidence showed an agreement to two legal monetary transfers: that [DeLay's PAC] transfer corporate money to RNSEC for use in other states and not in Texas in exchange for RNSEC transferring funds to Texas candidates out of a hard money account."

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