Prosecutors agreed to drop an illegal campaign contribution charge against Sears, Roebuck and Co. in exchange for its cooperation in an investigation of contributions to a political action committee associated with House Majority Leader Tom DeLay (search).

A Travis County judge signed off on the agreement Thursday. It said the retailer enacted additional internal policies and strengthened its policy against making illegal contributions in any state.

Sears was accused of donating $25,000 to Texans for a Republican Majority (search) during the 2002 legislative campaign. The use of corporate money for political purposes is illegal in Texas.

Sears was one of eight corporations accused of giving money to the PAC. Prosecutors previously dropped charges against Livermore, Calif.-based Diversified Collections Services Inc. (search) under a similar agreement.

Three associates of DeLay also have been indicted in the ongoing investigation, but the lawmaker himself has not been.

"We're certainly delighted with the dismissal in that we had maintained all along that we had not done anything illegal. We're very pleased to put this past us," said Robert J. O'Leary, a Sears senior vice president.

The agreement says Sears will cooperate with Texas "in its prosecution and investigation of any other person for any offense related to the corporate contribution" that Sears made. O'Leary said Sears also will give $100,000 to the University of Texas for a campaign finance law awareness program.

The retailer also will provide public access and disclose corporate contributions on the company Web site.

Travis County grand juries have spent two years investigating contributions in the 2002 legislative campaigns. The election resulted in the first Republican majority in the Texas Legislature in modern times.

One of DeLay's associates, John Colyandro, filed a motion this week to dismiss charges against him, the Austin American-Statesman reported Thursday.

Under Texas law, only candidates, officeholders or political committees are capable of illegally accepting contributions. In court documents, Colyandro's attorney said since the former executive director of Texans for a Republican Majority is none of those, he could not have accepted illegal corporate contributions.