Introduction

A Part-Time Legislature, but in Whose Interest?

Legislation Would Add to Disclosure Requirements for State Lawmakers

For Ethics Commission, Big Hurdles to Reform

For Dean of Senate, Public and Private Blur

Time to Take a Look at Cutting Ethical Corners

Pension, Gas Investment Boost Perry's Income

Weak Disclosure Laws Keep Public in the Dark

Lobbyists Who Dine From Both Sides of Plate

Legislators Can Carry Bills That Benefit Them? Yep.

Some Public Business Remains in the Shadows

Before Changing Chairs, Ethics Commission to Renew a Debate

Ethics Opinion Lets Lawmakers Work, Solicit for Nonprofits

Texas Ethics Reform: A Long, Tortured History

For Lobbyists, They're Gifts That Keep On Giving

Bills Renew Push for Ethics Commission to Post Financial Disclosures Online

Despite Reforms, Elected Officials Can Still Lobby

Some Lawmakers and Lobbyists Tied by Blood

Leaving the Legislature, but Not Going Too Far

Pension Privacy Gets Attention of Legislators

UT System Set to Bolster Disclosure Requirements

Lawmakers Slam Disclosure Bill — and Rebuke Freshman Who Filed It

Charitable Donations, With Political Benefits

Freshman Lawmaker Gets a Lesson in Pack Behavior

Transparency Bills Draw Strange Bedfellows

Judicial Donations Raise Questions of Partiality

For Strama, Education Interests Hit Close to Home

For Texas Politicians, Energy Dollars Plentiful

Exotic Trips, Luxury Gifts Are Perks of Office

Lawmakers in No Rush to Regulate Themselves

Legislators Dip Into Campaign Accounts to Boost Their Staff's Pay

Instead of New Ethics Laws, a Study — Again

Bill That Would End "Double Dipping" Gets Hearing

Campaign Finance Loophole Targeted

Oil Lobbyists Overseeing Protection of Threatened Lizard in Permian Basin

Rich Man, Poor Man, Beggar Man, Lawmaker

Disclosure Bills Get Little Love From Top Leaders

House Disclosure Bill Won't Get a Vote

Lobbyist Transparency Bill Heads to Perry's Desk

Judicial Pay Raises Bring a Little Something Extra

House Sends Campaign Disclosure Bill to Perry

Irony Abounds in Debate Over Ethics Proposals

Ethics Commission Bill Forces Tough Votes

For Lawmakers, Ethics Reform is Complicated

For John Carona, Conflicts and Interests

Retirees Have Carona's Company in Crosshairs

A Green Light for Lawmakers' Pension Hikes, Double Dipping

An Expensive Celebration, Courtesy of the Lobby

Lawmaker Transparency Bills Got Little Traction

Lawmakers Collect Daily Pay Even in Recess

Part-Time Legislature Can Create Financial Hardship

Introduction

Over the course of Texas' 83rd legislative session, The Texas Tribune produced more than 60 articles on ethics and transparency among the state's elected officials, a project we dubbed "Bidness as Usual." The revelations: Members of the Texas Legislature routinely carried bills and took votes on issues near and dear to their pocketbooks — and used the weight of their office to enrich themselves and their families.

The project sparked a litany of ethics legislation, including measures that would have put lawmakers' financial disclosure reports on the Internet and forced legislators to report their business contracts with government entities. In the end, little reform passed, and the elements that did were vetoed by Gov. Rick Perry. But this series, reproduced in full in this e-book, sparked the loudest conversation in years around ethics and transparency reform in Texas.

A Part-Time Legislature, but in Whose Interest?

by Emily Ramshaw

Published on January 13, 2013

On the presidential campaign trail, Gov. Rick Perry waxed eloquent about the merits of Texas’ part-time Legislature, saying that Congress would be more effective if its members had “real jobs back at home.”

“We’re the 13th-largest economy in the world in Texas,” Perry said, “and we come to Austin for 140 days every other year, and it works wonderfully.”

Wonderfully, it turns out, for many of those elected. Paid a pittance by taxpayers for their official state duties, lawmakers need to make a living elsewhere, and the prestige and influence of their elective office often helps them do it.

But with a conflict disclosure system rife with holes, virtually toothless ethics laws often left to the interpretation of the lawmakers they are supposed to regulate, and a Legislature historically unwilling to make itself more transparent, the reality is Texans know exceedingly little about who or what influences the people elected to represent them. They have no way to differentiate between lawmakers motivated entirely by the interests of their constituents and those in it for their own enrichment.

"Ostensibly, there is a defined level of disclosure and an agreed code of conduct,” said Jack Gullahorn, a Texas ethics expert who represents the state’s trade association for lobbyists. “But in general, either the sanctions aren’t there or the provisions aren’t clear enough to give people that don’t want to play by the rules any incentive to avoid the consequences for their actions.”

Over the coming months, The Texas Tribune will look at these lawmakers and the ethics rules that govern them, addressing issues like conflicts of interest and breaches in public accountability.

Business Ties

Lawmakers routinely carry or speak on behalf of bills that benefit their professions or employers, and they serve on committees that craft laws regulating their industries. Some of them are quite open about it.

Look no further than Rep. Gary Elkins, R-Jersey Village, who is in the payday lending business, and took the floor during a 2011 legislative debate to push back against measures designed to help consumers stuck in a vicious cycle of high-interest loans.

“I’m just a little old business guy,” Elkins said at the time, before asking his colleagues to vote no so “guys like me can comply with these laws.” Lawmakers passed the bills anyway, but included an amendment Elkins proposed to weaken one of them.

The House Insurance Committee last session shepherded through major reform legislation for the embattled Texas Windstorm Insurance Association, or TWIA. Rep. Craig Eiland, D-Galveston, a lawyer who was paid hundreds of thousands of dollars in legal fees for suing the agency on behalf of homeowners after Hurricane Ike, served as the committee’s vice chairman. TWIA, a quasi-governmental agency, is partially financed by taxpayers.

Rep. Todd Hunter, a Corpus Christi Republican who earned tens of thousands of dollars mediating the hurricane settlement with TWIA and was formerly the association’s lobbyist, served on the agency’s oversight committee. So did Sen. Larry Taylor, a former House Republican from Friendswood and an insurance broker who has earned income selling TWIA policies.

In such cases, lawmakers rely on an interpretation of the Texas Constitution that says they must bow out only if they have a “personal or private interest” in a measure — beyond simply being a member of an affected profession.

Elkins said he was so intimately tied to the payday lending industry that it would have been a disservice not to offer his expertise.

Eiland, who played a key role in last session’s debate on the TWIA reform bill, arguing for reforms to give policyholders a clearer route to a jury trial, has said he has been transparent about his legal work and that it has no bearing on his ability to represent the needs of his storm-prone coastal constituents.

And both Hunter and Taylor have said that they saw no conflict with their dual roles, and that they operate with the utmost legislative and professional integrity.

Undisclosed Clients

The line between lawmakers’ financial interests and their legislative efforts is not always so clear. Many legislators make their living as lawyers, consultants or even lobbyists, but are not required to report their clients, even when those same clients have business at the Capitol.

Sen. Wendy Davis, D-Fort Worth, came under fire in her closely contested re-election bid last fall for her law firm’s legal work for the North Texas Tollway Authority and for bills she supported that might have affected the agency.

In March 2011, days after her law firm signed a contract with the NTTA, Davis withdrew support for her own bill to lower the fees that tolling authorities could charge scofflaws. She signed on to a Republican colleague’s measure that lowered the amount tolling authorities could charge drivers for their first notice of nonpayment but increased the total amount the agency could charge them over time. The bill also allowed tolling authorities to charge scofflaws third-party collection service fees. Months later, in August 2011, Davis’ firm was among six the NTTA hired to handle the agency’s collections litigation.

A spokesman for the NTTA said the bill did not affect the agency’s third-party collections, and that Davis’s support played no role in its decision to hire her firm. And Davis has vehemently denied that her legal clients ever guided her votes.

“I’ve been very open and transparent about what it is I and my law partner do,” she told the Tribune in October. “I have nothing to hide.”

Yet Davis has refused to identify all of her public-sector clients — which include the Fort Worth Independent School District and Dallas-Fort Worth International Airport— citing attorney-client privilege. Some of her clients have been identified through public documents, including bond records.

A Helping Hand

In 2008, Rep. Bill Zedler, R-Arlington, used his legislative authority to obtain confidential records related to the Texas Medical Board’s investigations into five physicians, two of whom were not his constituents but had given a combined $25,000 to his campaign. Zedler said he intervened because he believed rival physicians had wrongfully accused the doctors — who faced allegations of performing overly invasive procedures and injecting jet fuel and natural gas into patients to diagnose chemical sensitivities.

He was using the confidential records, he said, “to find out who was filing complaints.” The two doctors who contributed to his campaign were ultimately sanctioned for lesser violations.

Zedler testified in 2009 that he had used the tactic of requesting confidential records in the past to get the board to drop at least one case. Last session, he filed an unsuccessful bill that would have required the board to turn over complaint records directly to legislators, including the name of the person who lodged it.

Rep. Yvonne Davis, D-Dallas, raised eyebrows in 2008 when she asked the state’s Racing Commission to expedite a racetrack license she was seeking with her business partner, David Alameel, a dental clinic mogul and self-made millionaire. At the time, Davis was on the House Ways and Means Committee, which oversees the revenue the Racing Commission relies on.

Davis defended her actions, citing an ethics ruling she said cleared her to be involved in the deal, which eventually faltered.

Rep. Larry Phillips, R-Sherman, relied on legislative continuances — a special privilege granted to lawyer lawmakers —to help a sibling he was representing. Legislative continuances allow lawyers in the Legislature to postpone their clients’ legal proceedings for the five months every other year that they are in session.

In 2011, Phillips sought two continuances to delay a case against his sister, who was cited in Southlake for having expired license plates on her car. Phillips’ sister eventually pleaded no contest and paid a $170 fine. Asked about the continuances, Phillips said the case was a family matter.

Antiquated Laws

The problem with the state’s ethics laws, watchdogs say, is that they are vague and hard to enforce: disclosure forms are thin or incomplete, and lawmakers’ interpretation of the rules is often subjective.

On personal financial forms, many lawmakers provide few details of their employment and compensation, and they skirt documenting the business interests they have in common with lobbyists. They are generally not required to name their legal or consulting clients, nor to report their personal wealth. Stocks are identified in broad, outdated ranges — or sometimes not at all if the lawmaker’s spouse owns them.

While the state’s ethics disclosure law is roughly 40 years old — and its rules on lawmakers’ dealings with lobbyists date back more than two decades — legislators seem disinclined to modernize the code.

The Texas Ethics Commission is under “sunset” — a review of an agency’s effectiveness — in this legislative session, a time most agencies seek to make meaningful reform. But during a summer review of staff recommendations, the Sunset Advisory Commission, a panel made up mostly of lawmakers, voted to keep legislators’ personal financial disclosures offline, sticking with unwieldy, archaic paper filings only available to those who can come to Austin to search them.

The lawmakers suggested that putting the files on the internet could threaten their privacy or lead their children to be kidnapped.

A Tribune request to all members of the Legislature to provide copies of their most recent tax returns was ignored or declined by everyone but Rep. James White, R-Hillister, and Rep. Elliott Naishtat, D-Austin. Rep. Carol Alvarado, D-Houston, released hers as well, but not at the Tribune's request; it was part of her special election run for a vacant state Senate seat.

“You get the feeling, on disclosure, on enforcement, that the members of the Lege don’t really see transparency as a responsibility,” said Craig McDonald, executive director of the liberal money-in-politics group Texans for Public Justice. “They look at it as a great burden and, at times, a personal affront.”

Legislation Would Add to Disclosure Requirements for State Lawmakers

by Emily Ramshaw

Published on January 15, 2013

Updated, 5 p.m.:

Sen. Wendy Davis, D-Fort Worth, said she "fully intends" for the disclosure bill to apply to her and her legal clients. "We are working out the details," a spokesman said, "and if language needs to be strengthened to clarify, that will occur."

Updated, 3:40 p.m.:

State Sen. Wendy Davis, D-Fort Worth, has filed companion legislation to a House bill that would dramatically expand the requirements of the state's personal financial disclosure form.

Davis, a lawyer, was criticized in a bruising re-election battle last fall for not being more forthcoming about the various public sector clients her firm, Newby Davis, represents.

Senate Bill 178, which she filed Tuesday, would force lawmakers to report all contracts they, their spouses or their close relatives have with any government entities, from state agencies all the way down to municipal offices, public universities and taxing districts. It would also require lawmakers to report if they or any close family members have more than 50 percent ownership in a business that has a contract with such a government entity. A spokesman for Davis said he didn't know whether she had a 50 percent stake in Newby Davis, or whether the law would require her to report her clients.

The ethics legislation is an interesting twist for Davis, who has insisted that her work as a lawyer does not conflict with her work as a state senator, but has declined requests to identify her public sector clients, citing attorney-client privilege.

“It’s an attorney-client privilege issue and unless and until my clients say to me, 'You are free to disclose that,' I really don’t think that I can,” Davis told a Fort Worth Star-Telegram reporter last year.

In a statement Tuesday, Davis said she looks forward to working with both chambers to make "meaningful improvements to Texas's ethics laws this session."

"Currently, similar disclosure is required of local public officials," Davis said in the statement. "This legislation is a logical next step to centralize the reporting of this information at the Texas Ethics Commission."

Original story:

Two freshman legislators — one on the far right, the other on the far left — have filed legislation to dramatically expand the requirements of the state’s personal financial disclosure form.

House Bill 524 by state Reps. Giovanni Capriglione, R-Southlake, and Mary González, D-Clint, would force lawmakers to report all contracts they, their spouses or their close relatives have with any government entities, from state agencies all the way down to municipal offices, public universities and taxing districts. The disclosure would also require lawmakers to report if they or any close family members have more than 50 percent ownership in a business that has a contract with such a government entity.

Capriglione said the bill — the first filed for both freshmen — is designed to close a gaping hole in the state’s disclosure forms, which haven’t been substantially modernized in two decades.

“It gets to the crux of the distrust between the public and elected officials: Where there’s a lack of transparency, they assume the worst,” Capriglione said. “I want to see who doesn’t vote for this.”

González said the goal isn’t for lawmakers or their relatives to have to give up such contracts. "But those relationships need to be transparent," she added.

The current disclosure form requires basic reporting on property holdings, broad ranges of stocks and mutual funds, and sources of income, from employment to business interests. It also requires reporting of gifts — which relatively few lawmakers denote — and interest in common with lobbyists, though the lobbyists do not have to be named.

The measure filed by Capriglione and González would also require lawmakers to report contracts with government entities on behalf of themselves, their spouses and some of their blood relatives, from children to siblings. The bill would not apply to federal government contracts. But it would apply to all other government contracts, like consulting or engineering agreements with hospital and water districts and business before local community colleges.

The lawmaker would have to report the exact amount of the contract in the preceding year down to dollars and cents, Capriglione said, unlike the outdated ranges they currently have to report on financial disclosure forms for things like stocks and mutual funds.

The measure would not provide an exception for lawyer lawmakers, who argue they are prohibited by attorney-client privilege from reporting their public-sector clients. Capriglione says taxpayer-funded entities that knowingly hire lawyers who are lawmakers to represent them should have to waive that privilege.

Both lawmakers acknowledge moving the bill will be challenging; they’re new to the Legislature, and more senior members have been loath to tighten up the disclosure forms in sessions past. They hope the fact that they’re polar opposites on the political spectrum could give them a credibility boost.

“Transparency and ethics," González said, "are bipartisan issues."

For Ethics Commission, Big Hurdles to Reform

by Morgan Smith

Published on January 17, 2013

Shortly after the close of the 82nd Legislature, state Sen. Mike Jackson made an unusual request. The La Porte Republican asked Gov. Rick Perry to veto a measure he had just amended.

Jackson's amendment, added to an ethics bill passed in the last 48 hours of the regular legislative session, was meant to eliminate fines against candidates and officeholders who make innocent clerical errors on their campaign finance reports. As written and quickly passed, it would have required the state to dismiss any complaints against filers who claimed they had made mistakes in good faith — severely undercutting the Texas Ethics Commission's ability to enforce campaign finance law.

The provision never made it into law. But Jackson’s intentions aside, for some government watchdogs, the incident clearly demonstrated the pitfalls of an ethics system where elected officials set their own rules.

The Ethics Commission is up for "sunset" review in this 83rd legislative session, a time when agencies generally face major reform legislation based on the recommendations of a state panel. But Austin ethics lawyer Fred Lewis said any attempts to give the agency more teeth could be blocked by the same hurdle that has stymied such efforts in the past — lawmakers themselves.

“The Legislature is tough on crime and potential criminal defendants, except when it's them," said Lewis, who is involved in efforts to reform the commission.

The more than 30,000 personal financial statements, campaign finance reports and lobbyist activity records filed annually with the commission are the linchpin of the state's ethics laws, which rely largely on public scrutiny to trigger enforcement. Responsibility for ensuring the accuracy of the self-reported information in those documents falls to the commission’s board, a bipartisan group made up of eight political appointees that has at times been accused of being too sympathetic to lawmakers.

Last year, the state's Sunset panel recommended strengthening the agency's enforcement abilities through changes to its investigations process, decreasing fines for minor reporting errors and finding the resources for sorely needed updates to technology.

Established in 1991 through a constitutional amendment, the commission’s purposes are broadly defined in state law. Among them are eliminating “undue influence over elections and government” and “ensuring the public’s trust and confidence.”

In practice, the primary way the commission fulfills those objectives is to serve as a depository for financial, campaign and lobby filings. The commission responds to ethics complaints brought by the public but does not initiate investigations of its own. It does not conduct any audits of the information contained in the filings beyond ensuring they come in on time and the forms are properly filled out.

“It does a good job as a librarian; it doesn't do a good job as a cop,” said Craig McDonald, the director of Texans for Public Justice, which advocates for transparency in government.

Any effort to change that may be complicated by a lack of resources. When the Legislature reduced state appropriations to the agency from $2 million to $375,000 in 2011 — a cut that included money for ethics training for state employees and officeholders — funding for the commission had already been stagnant since 2002. An increase in registration fees for lobbyists has made up for some of the lost state funding but not all, leaving the commission to operate with out-of-date technology and a slim staff.

Ethics legislation in recent years has targeted the administrative fines the commission imposes for late filing or incomplete forms, which many lawmakers view as unfair. Since 2005, legislators have passed measures providing penalty exemptions for smaller political action committees and giving candidates and officeholders additional leniency in meeting deadlines and correcting reports.

According to records provided by the commission, the average fine assessed through sworn complaints filed by the public rose from $540 in 2007 to $1,437 in 2010 — but has been just below $480 for each of the last two years.

Two of the highest fines the commission has ever assessed through the sworn complaint process — $29,000 against Supreme Court Justice Nathan Hecht in 2008 for failing to report an estimated $168,000 discount on legal fees, and $100,000 against Criminal Court of Appeals Justice Sharon Keller in 2010 for not disclosing $2 million in personal property holdings — are both still on appeal.

The commission already waives most of the fees filers incur for late or incomplete filings. In 2012, it approved two-thirds of the requests it received to waive administrative fees, reaching an eight-year high. Until then, the approval rate had typically hovered at around 50 percent.

The Ethics Commission board has to balance candidates’ and officeholders’ need for flexibility in certain circumstances with the “critical importance” of timely and accurate reporting, said David Reisman, the commission’s executive director.

“While some might see that as tedious paperwork, it is crucial for our operation,” he said.

Under the pink dome, there is frustration that the commission’s duties tilt so heavily toward a “box-checking exercise,” said state Rep. Rafael Anchia, D-Dallas, who sits on the Sunset Advisory Commission. He said that comes from lawmakers who feel they have been unfairly branded as ethics violators for minor errors like failing to file a report on time and from those who believe the commission doesn’t do enough to investigate serious complaints.

The Sunset report also draws attention to what it calls the commission’s unnecessary emphasis on “minor reporting infractions.” Among its recommendations is shifting the investigation of complaints to staff rather than board members, who would still make the decisions on sanctions. But it stops short of calling for the creation of an enforcement division that operates independently from the board, a change McDonald said would go further toward ensuring its effectiveness.

Meanwhile, not everyone agrees that the Ethics Commission needs drastic reform — including Jackson, who is out of office after serving more than two decades in the Legislature. While the current system is not perfect, he said, it is “fair and open.”

“The Legislature created the Ethics Commission and funds the Ethics Commission," he said. "I think if the Ethics Commission goes off on these wild goose chases every once in a while and is doing things that the members of the Legislature didn’t really intend for them to do, and we are paying all their bills, then I think they should be subject to the Legislature since we created them in the first place.”

For Dean of Senate, Public and Private Blur

by Jay Root

Published on January 18, 2013

Exactly 40 years ago this month, a young college dropout named John Whitmire pointed a 1972 Cutlass toward Austin and set out to realize his dream — to serve in elective office, just like his daddy had years before.

Getting sworn in as a state representative would have been a big deal for a 23-year-old social worker even in an ordinary year. But the 1973 session was no ordinary gathering of the Texas Legislature.

The civil rights era had spilled out of the streets and into the statehouses, thanks to new single-member districts that helped produce the most diverse freshman class in the modern history of the Texas House.

It was the largest one in a generation, too — 70 or more, depending on who’s counting, in the 150-member body. Among them were a future U.S. senator, Republican Kay Bailey Hutchison, and several future U.S. congressmen, including Democrats Mickey Leland, Craig Washington and Gene Green.

Helping to fuel the high turnover: The Sharpstown scandal, an influence-peddling controversy that had penetrated the highest levels of government and — either directly or indirectly — ended the political careers of the sitting governor, lieutenant governor and House speaker, plus scores of incumbent lawmakers.

The voters had thrown out the bums en masse.

Austin had become oddly synchronous with Washington in that bitterly cold winter of 1973, when Whitmire braved rare Central Texas snow on his way to taking the oath of office. Watergate, like Sharpstown in Texas before it, was well on its way to becoming a household word, and public corruption was eroding voters’ trust in their elected representatives.

Calls for ethics reform were sweeping across the political landscape. In oil-rich Texas, cozy ties between lobbyists and lawmakers weren’t new. But for once, it seemed state government might do something about it.

The youthful and idealistic House speaker, Democrat Price Daniel Jr. of Liberty, had made good government his calling card, a perfect fit for the times but still a radical notion inside the Texas Legislature, whose members didn’t exactly cotton to the idea of publicly revealing their campaign transactions or private business dealings.

Legislative leaders give low bill numbers to their most important initiatives, and Daniel reserved the single digits for public integrity legislation: House Bill 3 aimed to create the state’s first open meetings law; House Bill 2 introduced comprehensive lobbyist registration and reporting requirements; and House Bill 1 — easily the most contentious — was designed to make lawmakers disclose, for the first time, details about how they made their living in a part-time Legislature.

Whitmire stepped into that cauldron without knowing a gavel from a floor substitute. He campaigned as a conservative but was called a liberal, a welfare worker who had promised state Rep. John Hannah (a future federal judge) that he would support Daniel as House speaker. Former Daniel aide Carlton Carl remembers the Houston Democrat as one of the many freshman lawmakers who were “scared shitless of their shadows.”

“They didn’t know what they were doing,” he said.

The first big vote came when Rep. Fred Agnich, R-Dallas, made a mockery of the public disclosure debate with an amendment requiring that lawmakers’ financial statements be placed in sealed envelopes and kept secret — accessible only by court order or ethics prosecutors pursuing an official complaint. The provision got tacked on by the narrowest of votes, 71-70, only to be removed after bitter negotiations with the Senate in the waning hours of the session.

Whitmire can’t remember now why he voted with Agnich in early 1973 to gut HB 1. The young Houston representative otherwise turned in a mostly pro-reform voting record that year, according to the 1973 book The Year They Threw The Rascals Out, by Charles Deaton.

What Whitmire does remember all these years later is how politically naïve he was. He had little more in his campaign kitty than the $5,000 loan he got from his dad, for a race few thought he would win. He certainly wasn’t seen as a “lobby candidate,” not that he knew what that meant at the time.

“Back then you didn’t have campaign war chests,” Whitmire said in a recent interview in his Capitol office. “You gotta understand, I had nothing. I didn’t even know what a lobbyist was when I got elected. I probably couldn’t hardly even spell it.”

Suffice it to say that Whitmire, 63, has learned a thing or two in his four decades as a legislator. When he’s not making laws, he’s working in the government affairs section of a politically connected law firm — the section that employs registered lobbyists. Without ever leaving the Legislature, Whitmire has been a federal lobbyist.

“I know how to spell it now,” he said, deadpan.

He knows how to raise and spend campaign dollars, too.

As he begins his 21st regular legislative session, Whimire boasts the biggest war chest in the Legislature — more than $6 million at last count, more even than Gov. Rick Perry has reported.

Like many of his peers, he has used the money to fund an often-lavish lifestyle, helping him lease an $80,000 BMW 650i and buy $290,000 in tickets to sports events since the 1990s, including the Houston rodeo.

Car leases are allowable and the ticket purchases, for “constituent entertainment,” got the blessing of the Texas Ethics Commission, much to the consternation of some critics who complained about it.

At the Capitol, Whitmire is the dean of the Senate — where he took office in 1983 — the title reserved for its longest-serving member. His bill-passing expertise and warm ties to the GOP leadership arguably make him the chamber’s most powerful Democrat. His old friends, like Craig Washington, call him something else: “Boogie,” a nickname that evokes his party boy reputation but actually stems from the zip-up “boogie boots” he used to wear in the '70s.

Whitmire can be both charming and intimidating, a bully to some, a lovable scoundrel to others. He’s been hailed for his ambitious work in overhauling the criminal justice system, but over the years his personal business dealings have demonstrated just how blurry the lines can get between a lawmaker’s public duties and private interests. He endured a series of conflict-of-interest controversies and investigations in the 1990s, spending nearly $200,000 of his donors’ money on defense lawyers, campaign records show.

Work for a legal giant

He has his own law practice and has been known to represent — on retainer or as a consultant — government contractors, taxpayer-supported agencies and close friends who do business with public entities. For the past 15 years, Whitmire has also been “of counsel” to Houston-based legal giant Locke Lord, which has a long list of clients with interests before the Legislature, including some that have benefited from legislation he has sponsored or helped pass.

Whitmire joined Locke Lord in September 1997, a few months after authoring a bill allowing taxes to be levied to build a stadium for the Houston Astros, one of the firm’s clients. Locke Lord says the job offer and the passage of the bill were entirely unrelated.

In 2011 Locke Lord was named the “Top Law Firm Lobby Practice” for the seventh year in a row by Austin-based Capitol Inside, a political newsletter, according to firm literature. Under the state’s disclosure laws, the clients Whitmire represents there and the details of his compensation are kept secret.

Both he and Locke Lord say he adheres to a code of conduct that ensures zero conflicts with his official duties as senator.

“I just have very strict rules, between me and the practice,” Whitmire said. “They don’t lobby me, I don’t contact them. I couldn’t give you a list of their clients if my life depended on it. Obviously I see them in the building, but we don’t discuss business at all.”

That hasn’t stopped critics from questioning whether the legislator who got his start in a reform-minded Legislature has come to embody the very conflicts of interest it struggled to avoid — or at least to fully reveal to the public.

“This is a guy who is in bed with so many people I don’t know if he has his constituents’ best interest in mind or his own pocketbook’s best interest in mind,” said Trent Seibert, founder of Texas Watchdog, a nonprofit dedicated to tracking the influence of money in state politics. “This is what turns people off from politics and makes people distrust politicians."

John Harris Whitmire was born in Hillsboro in 1949. His father, James Whitmire, was the Hill County clerk. He said his dad was an alcoholic, but he had the undying admiration of his youngest son. His mother, Ruth, was a nurse who liked to tell her son that a man is defined by the company he keeps.

Whitmire’s childhood was chaotic and difficult. At age 3 he moved to Houston, then two years later went to Pasadena, where he flunked the first grade. His parents divorced when he was 7, and he and his older brother, Jim, moved with their mother to Waco. Then two years later they moved again, to tiny Whitney, just outside Hillsboro. John Whitmire was in the fifth grade.

In Whitney, the family's small country house had no running water. They bathed in a metal wash tub and went to the bathroom in an unattached outhouse. When Whitmire was in sixth grade, a fire destroyed their home, forcing the family to move to a one-room “tourist court” motel room.

Despite all the hardships, Whitmire clings most fondly to the memories of that tiny town and his down-to-earth neighbors, who brought him a bucket of sugar and collected $13 for him after his house burned to the ground. He named his eldest daughter Whitney, and to this day his blue corduroy Future Farmers of America jacket, with “Whitney” embroidered on it in big yellow letters, hangs behind his desk in the Capitol.

When he was in the ninth grade, his family moved back to Houston, and Whitmire went kicking and screaming. But he settled into life in the big city and eventually found himself studying political science at the University of Houston. He always thought he would return to Hill County to run for office, but it was in Houston, during his senior year in college, that political opportunity struck.

At the time Whitmire was working his way through UH with a job at the state welfare department. He spent part of the day conducting unannounced compliance interviews of food stamp recipients, the rest attending class.

"They drew that one for me"

After the progressive redistricting plan came out before the 1972 elections, Whitmire’s college professor, Richard Murray, showed him how a newly drawn North Houston district encompassed his home, his church, his high school and the hospital where his mother worked. There was no incumbent running.

“I said, ‘They drew that one for me,’” Whitmire recalled.

Whitmire won after a primary runoff and, at a time when Democrats ruled Texas the way Republicans do now, he was easily elected in November 1972.

Whitmire’s decade in the state House wasn’t the stuff of lawmaking legend. While his friends Craig Washington and Mickey Leland quickly made names for themselves as ambitious up-and-comers, Whitmire was generally dismissed as a lightweight.

In 1973 Texas Monthly called him “furniture,’’ a term reserved for low-impact legislators, and in 1979 he earned a spot on the magazine’s list of the worst legislators.

“Nicknamed Double Zero: one digit representing his ability, the other his stature in the House,” the magazine wrote in a decidedly harsh assessment of him that year. “Whitmire approaching the podium was a misguided missile homing in on his own self-destruction.”

Whitmire finished his undergraduate degree and went on to UH law school while serving in the House. He gained admittance to the bar in 1981 after just two years, availing himself of a now-defunct statutory perk that let state legislators become lawyers without a law degree as long as they passed the exam.

In those early days, he barely had two nickels to his name. When Whitmire filed his first personal financial statement in 1974, as required by the disclosure bill he voted to water down, his net worth was probably a negative number. He reported a car loan — the bronze Cutlass with the bucket seats — but he had no property, no stocks and no job other than the part-time legislator gig that paid him just $400 a month. It’s since been raised to $600 a month.

Fast forward to his 2012 disclosure statement, and a far different picture emerges. Whitmire lives in a Houston home worth $1.4 million, has ranch property in Brenham valued at $3.7 million, owns an Austin condo appraised at $400,000, and has a lakehouse on Toledo Bend, a reservoir bordering Louisiana, that is being advertised for sale at $385,000.

Whitmire attributes his healthy financial condition partly to hard work and partly to his ex-wife, West Texas ranch heiress Becki Dalby Whitmire, and her parents. He says her trust fund put him through law school and helped the family make ends meet while he tended to his legislative duties.

His service in the Legislature, despite its part-time nature, promises future financial rewards. Whitmire says he’s been told he’ll be eligible to collect a yearly pension worth up to $125,000 annually, the maximum allowed under law, if he retires.

Involvement with developers

Over the last two decades, Whitmire has also invested with Houston developers involved in controversial public sector real estate deals.

In a few weeks, when ethics filings are due, he said he plans to report an investment in two condo projects being developed by his friend Mike Surface. The Houston developer was at the center of a corruption scandal that brought down Harris County Commissioner Jerry Eversole in 2011. This is at least the second time the senator has partnered with Surface. Whitmire sold his stake in Harris 249 Limited Partnership, an investment with Surface he no longer remembers, for an undisclosed sum in 1998. His 1998 disclosure statement says only that he made a net gain of “more than $25,000.”

In a plea deal that forbids Surface from entering into government real estate deals for five years, the developer admitted he provided gifts to Eversole, including more than $60,000 in cash, with the intent to influence him. The developer was sentenced in 2012 to two years’ probation. Whitmire said the FBI interviewed him about the government’s wide-ranging corruption investigation in Harris County in 2008. But he said he was not the target of any investigation.

“I was told specifically I was not being investigated. I was a resource,” Whitmire said in the interview this month, his voice rising. “Did you hear what I just said? I was specifically told [that] and voluntarily answered their questions as a resource.”

It was not the first time Whitmire’s dealings with developers were in the news. In the early 1990s, he introduced executives of BSL Golf Corp. to the Houston Municipal Employees Pension Fund. The fund's investments in BSL golf courses in Houston and Austin sparked city and FBI investigations, according to reports in Houston newspapers and KPRC-TV.

The owners, Andrew Schatte and Richard Bischoff, later denied the FBI had ever investigated the deal. And Bischoff said that despite complaints, the investments ended up generating a good return for the fund.

Whitmire also benefited from his association with Schatte and Bischoff. Last month, Bischoff told The Texas Tribune that for years, Whitmire had been paid a legal retainer from BSL Golf’s parent company, Universal Services, saying he was “like an in-house counsel” there.

Bischoff said that he saw no conflict of interest in the payments and that they stopped around 2000. Whitmire attributes criticism of his private dealings to political opponents bent on tarnishing his reputation.

The BSL controversy blew up on Whitmire at the beginning of the most tumultuous period of his adult life — and arguably the most rewarding, politically speaking. He may have been a lightweight in the 1970s and even the 1980s, a decade Whitmire now calls “pretty uneventful.” The 1990s were anything but.

A decade of headlines

After a tight and bruising re-election battle in 1992, Whitmire got his first big legislative break in the 1993 session when Lt. Gov. Bob Bullock, a fellow Hillsboro native, appointed him chairman of the Senate Criminal Justice Committee. Voters had been clamoring for a crackdown on revolving-door policies that allowed criminals to walk out of prison after serving a fraction of their sentences.

In response, Whitmire authored an ambitious rewrite of the state’s criminal laws and triggered a prison building spree that would last for years. He won almost universal accolades for it at the time. And for the first time in his then 20-year career, "Boogie" was taken seriously.

“Whitmire … whose only previous contribution to the Senate was a series of one-liners, was the class clown who made straight A’s when he finally decided to do his homework,” Texas Monthly wrote that year, giving him his first “Best” legislator designation. “Whitmire got serious about an overhaul of the entire penal code.”

It didn’t take long for the shine to wear off.

Over the next two years Whitmire was embroiled in several conflict-of-interest controversies, engaging in behavior deemed ethically questionable even in a Legislature used to edgy wheeler-and-dealers.

In summer 1993, just a few weeks after passing a bill benefiting the Houston Firefighters' Relief and Retirement Fund, Whitmire signed a lucrative contract to lobby for the pension board in Washington. The Houston Chronicle, in a December 1993 story titled “Whitmire backs bill, lands a job,” reported that the Houston Democrat was not in full compliance with the terms of his contract but got paid anyway; the fund said the omissions were minor.

A few weeks later, Whitmire was in the spotlight again for urging the Houston Fire Department to hire an ex-parolee, who was later fired for failing to disclose all of his convictions.

In 1995 alone, the senator found himself:

- Under internal investigation for flouting Senate protocol when he hired a Houston-area engineer (and campaign donor) for $5,000 a month to consult with his Senate committee despite the fact that the consultant didn’t live in Austin, as the rules required. Whitmire told the Austin American-Statesman he didn’t have time to worry about the Senate’s “silly rules” but said the consultant, whose work for the committee could not be substantiated with any written reports, had provided valuable services.

- Under investigation by the Harris County district attorney’s office for taking a $4,000-a-month consulting contract with the Harris County probation department. His job was to explain the criminal laws, which encouraged more community supervision and probation, that he had just passed. (The county probation director at the time, Larance Coleman, is now on Whitmire’s Senate payroll in Austin). Whitmire said he wouldn’t take the probation job today, but noted that the DA cleared him of any criminal wrongdoing.

- Heavily criticized by government watchdogs for taking a reported $24,000 in legal fees from a foundation that operated a halfway house and whose state funding Whitmire oversaw as Criminal Justice Committee chairman.

- The subject of unflattering news coverage for mixing his official and private duties inside his Senate district office, where both Whitmire and a paid committee staffer — also ignoring Senate residency requirements — both ran law practices at the same time.

Whitmire said he’s learned a lot since those rocky days. He says he no longer takes offers of work if it means dealing directly with state agencies, and he routinely turns down people who want the chairman of the Senate Criminal Justice Committee to represent them in criminal matters.

Generally, he chalks up the criticism and the scrutiny he’s gotten to politics. Sour grapes and envy. The proof he’s done good can be found at the ballot box — election year after election year, Whitmire says.

“My constituents have shown a lot of confidence that I’m a great public servant,” he said. “I’m proud of my record, and you know what? Most Houstonians are proud of my record.”

The negative headlines haves subsided considerably. In 2010, Governing magazine named him one of its “Public Officials of the Year,” and Texas Monthly gave him his fourth “Best” award a year later.

But the questions about how he makes his living haven’t gone away.

Whitmire’s employer, Locke Lord, represents a broad array of interests and industries — among them medical, energy, restaurants, beer distribution, auto and rail.

Locke Lord also lobbies for four public pension funds, including the one that had hired Whitmire to lobby in 1993 and the one that invested in his friends’ golf courses. The Houston police and fire pension funds hired the firm before Whitmire started working there in 1997.

Throughout his career, Whitmire has been a friend of the public employee unions and a fierce advocate in the Legislature for their generous pension benefits, which Houston City Hall has frequently tried to pare back. That has often put Whitmire at odds with Houston mayors — stretching back at least to the rein of his former sister-in-law, Kathy Whitmire, during the 1980s.

Pension Review Board role

In addition to his legislative power, Whitmire has a major pension governance role in Texas: Since 1996, he’s been on the Pension Review Board, which oversees all public pension funds in the state. Whitmire has remained on the board since his term expired in 2005 because Lt. Gov. David Dewhurst has never appointed a replacement, officials said.

Whitmire says his advocacy of the pension systems, or any other legislative interests, has nothing to do with the provenance of his paycheck.

According to Locke Lorde company newsletters, Whitmire has represented vendors looking for business at Houston City Hall and has at times been a sort of rainmaker for the firm. Locke Lord lauded him in the late 1990s for bringing in Houston Lighting & Power Company, and then BSL Golf Corp. BSL was looking to land a renovation contract and lease extension at Hermann Park golf course.

“John Whitmire is responsible for bringing this business to the firm,” the newsletter said.

Supporters of the part-time Legislature concept say it forces lawmakers to learn what issues impact their constituents in the private sector. But Craig McDonald, director of the liberal watchdog group Texans for Public Justice, said reforms are needed to put some distance between lawmakers’ public sector duties and their often-lucrative jobs.

“Our legislative process is infested with conflicts of interest,” he said. “Current rules allow legislators such as Senator Whitmire to represent private clients before local governments and to draw a paycheck from a law firm that reaps millions from clients paying to get access to the Legislature. We need to build walls that block such conflicts.”

In Houston, Whitmire’s blended approach to politics and lawmaking still can be found in his district office — a two-story, white Victorian with a wrap-around porch, where the senator and a top aide once juggled their public and private duties.

The landlord is Lawrence Kagan, a Whitmire friend and campaign contributor. Kagan and/or his companies have given the lawmaker at least $32,000 in donations since the early 1990s.

Whitmire says the office has been a bargain for the state, which for nearly 20 years has paid rent to Kagan’s company, adding up to an estimated $500,000 or more, based on state expenditure data and published monthly rent figures. Whitmire separately leases, for $200 a month, a small part of the building from Kagan as his campaign office, records show.

Whitmire said he couldn’t remember if he had ever done any legal work for Kagan, but he did urge the state's Health and Human Services Commission in the 1990s to keep leasing a big office building from Kagan, saying it was also a good deal for Texas. The state has paid Kagan $9.5 million to lease 131,000 square feet of office space since 2004, the last year figures were available, and he’s just signed another lease for an 8,000-square-foot building, for which he’s received $25,000 so far. Kagan did not return phone calls for this story.

While the HHSC business is more lucrative, Whitmire’s Senate District 15 office may be Kagan’s most reliable long-term lease in Houston. At a ceremony celebrating the dean’s 40th anniversary in the Legislature on Monday, one fellow senator said he wouldn’t be surprised to see Whitmire serve another 40 years in office.

It’s not an unpleasant scenario for Whitmire, one of just two actively serving members left from that starry-eyed freshman House Class of 1973.

“I’m a public servant,” he told the Tribune. “It is a religion to me. It is my purpose in life. I get up in the morning, I stress out about people’s conditions. And I will continue to do it as long as I can breathe.”

Audrey White contributed to this story.

Time to Take a Look at Cutting Ethical Corners

by Ross Ramsey

Published on January 21, 2013

It’s been 20 years since a scandal-driven Texas Legislature overhauled the state’s ethics laws. Gently put, officeholders have figured out how to cut some corners.

A small example to make the point: They can’t convert campaign funds to personal use, but they can use those funds to rent cars used in their political campaigns. Rules are made to be broken, right? They just have to be reasserted, or revised, from time to time.

Maybe it’s time. The Texas Ethics Commission is up for a periodic legislative review.

The current Legislature is packed with freshmen and sophomores who haven’t been around long enough to go native — to do business like lawmakers who have grown accustomed to cutting ethical corners. And some of the lawmakers who quit or who got beat or were spooked by challengers in the last election cycle were in harm’s way because of the blurry lines between their official and personal business.

One was billing the state and his campaign accounts for the same travel expenses. Another’s spouse was a consultant for a program overseen by the legislator’s committee.

Texas lawmakers set up some tough laws to govern themselves, but they haven’t invested much money or interest in enforcement.

In practice, a lot of the enforcement of ethics comes in the off-season, when the opposition researchers for political challengers go through incumbents’ records and reports to find the nasty little bits that animate their election attacks.

This happens periodically. Two scandals in the 1970s — the Sharpstown stock scandal in Texas and the Watergate scandal in Washington — resulted in a mountain of ethics and campaign reforms, statewide and nationally. Investigations of Congressional and legislative bribery spurred reforms in the 1980s.

Texas lawmakers playing footsie with lobbyists — figuratively and literally — sparked the last major set of reforms in the early 1990s.

More recently, lawmakers, lobbyists and others inside the bubble of state government have been preoccupied with the absence of clear boundaries between professional and legislative business. In addition to the sunset legislation of the Ethics Commission — a periodic state agency review that is an obvious vessel for new ethics laws — legislators have filed bills promised in their last campaigns.

Two freshmen — Giovanni Capriglione, R-Southlake, and Mary González, D-Clint — propose forcing lawmakers to disclose the government clients of their personal businesses. Senator Wendy Davis, Democrat of Fort Worth, jumped to file companion legislation in the Senate; her political opponent last year tried to make an issue of the local government business done by her private law firm.

It’s easy to think of a political group — the Legislature, the city council, the school board, the utility district — as inherently corrupt. Sometimes, they do their best to prove it. That is not really the problem here. The problem is that under the current ethics laws it’s very hard to prove the opposite. It can be difficult to tell an honest lawmaker from a lawmaker who is on the make.

Start, if you can, with the assumption that most people in public office are honest and are serving with the best of intentions, even if you disagree with their politics. Assume they are reasonably intelligent. And think about what happens when you give intelligent people a set of rules. Over time, they figure out the best way to read the rules, to stay within the law while also taking every legal advantage.

Over time, things get out of balance. It might be that most people are following the laws on the books, but that the everyday level of questionable behavior is out of hand.

For instance, Texas requires judges to grant continuances to lawyers who, as legislators, can’t make it to court because they’re occupied with official state business. Makes sense, right? You don’t want to lose your lawsuit because your lawyer is also a senator who was voting on something instead of coming to the courthouse.

But it didn’t take long for somebody smart to hire a legislator/lawyer to take advantage of the time delays automatic continuances can provide. Or for a legislator or two to turn that into an easy way to make money.

Lawmakers came back and limited those continuances. They were legal and widespread, but poisonous — something that might turn up in their campaigns.

There’s more there.

Pension, Gas Investment Boost Perry's Income

by Jay Root

Published on January 22, 2013

Gov. Rick Perry and his wife, Anita, made a little more than $300,000 in 2011, getting a pay boost over the previous year thanks to his new state pension benefit and the sale of an interest in North Texas gas wells, tax records show.

The couple reported adjusted gross income of $312,597 and paid $76,000 in taxes. They gave $27,083 to charity: $25,000 to his mega church, Lake Hills Church in West Austin, and $2,000 to Denison Forum, a Christian conservative nonprofit. Perry's adjusted gross income in 2011 surpassed his 2010 income by about $95,000.

The figures come from the Perrys' 2011 tax return, which the governor’s office provided to The Texas Tribune last week. Perry filed an extension last year. So far the governor, lieutenant governor and three Texas legislators have publicly released tax returns to the Tribune, which has requested them from top legislative leaders and all state lawmakers.

Perry has regularly released his tax returns to the media since his first race for a full term as governor in 2002. He has provided returns stretching back to 1987. State disclosure laws do not require it, but candidates running for Texas governor have in recent years generally provided at least some of their federal tax returns. Perry took office in December 2000, about a month before his predecessor, George W. Bush, was sworn in as president.

Perry makes a $150,000 gross salary as governor. He also reported pre-tax earnings of $84,541 from his state pension, the subject of considerable controversy.

He is taking advantage of an unusually generous perk in the law, dating at least to 1991, that applies to veteran elected officials. It has allowed the longest-serving Texas governor to retire without ever leaving his job — to collect both a salary and a pension. Perry began drawing monthly pension payments in early 2011. Perry, who has applied several years of military service to his state pension, can retire again from the state when he leaves office and count additional years toward his annuity. A bill pending in the state House would eliminate the provision.

Perry’s office points out that he has met the legal requirements to take the pension and continues to pay into the retirement system.

The tax returns also show how much Perry made on the sale of a stake in MKS Natural Gas Company, started by his longtime friend Ric Williamson, a former state representative appointed by Perry to be chairman of the Texas Transportation Commission in 2004. Williamson died in 2007. Perry sold an interest in MKS in 2011, according to his personal financial statement filed last year.

Perry spokeswoman Catherine Frazier said the sale is reported as $30,782 in ordinary income on his tax return on a K1, a federal tax form used to report business income or losses, from the RP 2010 Management Trust.

The governor once made a small fortune in real estate, about $2 million in pre-tax profits, according to public records and news accounts, but he reports no direct property ownership on his latest personal financial statement.

Perry incurred major capital losses during the downturn in 2008, previous tax returns indicate. According to his latest return, Perry can still carry forward more than $500,000 of previous capital losses, deductions that can be used to offset future capital gains, said Houston accountant Bob Martin, who has analyzed the governor’s tax records and disclosure statements for the Tribune. Anita Perry reported $65,000 from her consulting work for Texas Association Against Sexual Assault, the same amount reported in previous tax years. The governor’s salary remained unchanged, too.

The Perrys reported adjusted gross income of $217,447 in 2010. Most of the increase in their take home pay can be attributed to Perry’s pension and the MKS sale, Martin said.

Weak Disclosure Laws Keep Public in the Dark

by Ryan Murphy and Jay Root

Published on January 24, 2013

Texas voters finally got a real peek at the personal finances of their governor and lieutenant governor — after the two men decided to run for high federal office.

It was during his presidential campaign in 2011 that Gov. Rick Perry broke up a blind trust and revealed that he was double-dipping — collecting both his salary and a state pension. And Lt. Gov. David Dewhurst had to expose the details of his vast wealth, estimated at around $200 million, when he was striving to become a U.S. senator.

The disclosures by the state’s top two Republican elected officials went far beyond previous ones because the federal forms they filled out demand much more information than what’s called for on Texas' personal financial statement. (You can see examples from both sets of forms embedded below; click on them for greater detail.)

The experience highlights a serious flaw in Texas ethics disclosure law: It doesn’t ask for a lot of detail, hasn’t been updated in years and has often led to confusion and varying interpretations about what must be revealed.

“The lack of disclosure is pretty gross,” said Austin lawyer Randall “Buck” Wood, who fought to get the first Texas disclosure law on the books as the chief lobbyist for Common Cause during the state's reform session of 1973. “It doesn’t tell you hardly anything. Probably what we need to do is at least adopt what the feds have. Then we’d get a better idea.”

Ways to beef up disclosure are already being kicked around in the Texas Legislature, which has traditionally been reluctant to shine more light on the private affairs of its members.

Two Democratic lawmakers, Reps. Donna Howard of Austin and Chris Turner of Grand Prairie, are proposing legislation that would incorporate some of the elements of the federal requirements into the state’s disclosure law. And Republican Rep. Giovanni Capriglione, R-Southlake, wants more robust disclosure of business relationships with government entities, which can lead to conflicts of interest.

Both Howard and Turner want lawmakers to disclose more information about how they make their money, specifically by requiring that both earned and unearned income be revealed. That would ensure double-dippers reveal any state pension benefit they’re receiving at the same time they're receiving a state salary.

Perry brought the controversial practice into the spotlight when he began taking advantage of a generous perk that allows longtime elected officials to begin collecting a state retirement without ever leaving their jobs. The provision has been on the books at least since 1991, when Lt. Gov. Bob Bullock, a Democrat, availed himself of it.

Perry didn’t have to tell the Texas Ethics Commission about his pension, but in December 2011 he was required to disclose it to the Federal Election Commission in Washington, D.C., as part of his run for president.

“That’s a great illustration of the fact that our disclosure reports have a lot of loopholes in them,” Turner said. “It’s obviously of interest to the public, but was not required to have been disclosed.” Turner has filed separate legislation that would ban double-dipping by elected officials.

The state disclosure forms make it almost impossible to affix meaningful values to the assets and income of state officials, information that could help the public determine their relative importance when considering possible conflicts. Legislators have to identify their “sources of occupational income” and give the number of shares of various stocks they own; they just don’t have to put dollar values on it.

Texas law does require filers to report values associated with unearned income — such as bank interest, stock dividends and the sale of property or business investments.

But it’s a multiple choice question that tops out at $25,000, a value that hasn’t been changed in years. In Dewhurst’s state filings, for example, voters had no way to determine the value of his main assets, such as the David Dewhurst Trust and Falcon Seaboard Diversified. Nor could they ascertain anything meaningful about the income range, except that they provided him with “more than $25,000” a year.

After he ran for the Senate, the mystery was largely solved. On his federal forms, the public learned that the trust and Falcon Seaboard Diversified are worth “more than $50 million” apiece.

On both forms, Dewhurst gave income ranges for unearned income. But on the federal forms, the range tops out at $5 million, which is 200 times higher than the state’s maximum value. Dewhurst did not have to tell the state how much money he made for being lieutenant governor, including all the fill-in pay he received while Perry was out of the country running for president. But he gave the exact amount of money he got from the state on the federal form he submitted in October 2011: $61,119.

The modern version of the law requiring annual disclosure statements first got on the books in 1973, after the Sharpstown scandal provoked widespread outrage about politicians who were accused of using their power to enrich themselves.

But Capriglione, the Southlake Republican, said that under current law it’s often hard to figure out if lawmakers have any relationships that could present conflicts. He’s filed legislation, House Bill 524, that would force lawmakers to report all contracts they, their spouses or their close relatives have with any government entities, from state agencies all the way down to municipal offices, public universities and taxing districts.

The disclosure would also require lawmakers to report if they or any close family members have more than 50 percent ownership in a business that has a contract with such a government entity.

Like Howard and Turner, Capriglione favors requiring the personal financial statements to be posted on the internet — just like bills, press releases and member bios are now. The staff of the Texas Sunset Commission recommended internet posting of the statements, as watchdog groups have been advocating for years, but the lawmakers on the commission voted down the suggestion over privacy concerns.

The vote is an indication of the uphill battle ethics reformers will have in the Texas Legislature.

Howard said she has purposely “stopped short of going full throttle” on her soon-to-be-filed bill toughening the disclosure statements because she needs time to build support for increased transparency.

She said her main goals are requiring lawmakers to reveal pension income and other non-occupational revenue, introducing stricter disclosure about the finances of spouses and dependent children and putting the forms on the internet. She wants to punt on more controversial items, such as requiring lawyers to reveal major clients, by creating a blue-ribbon panel that would make suggestions ahead of the 2015 session.

“It’s probably going to be an incremental thing,” she said.

Lobbyists Who Dine From Both Sides of Plate

by Ross Ramsey

Published on January 25, 2013

Are the people who run political campaigns unsympathetic characters? Yes, they are. But they have to eat, and some of them make a living by lobbying the same lawmakers they helped elect — and who might hire them again when it is time to seek office again.

Side businesses are nothing new for political folk. Back in the day, for instance, the Texas Republican consultant Karl Rove had a business that raised money for museums and the arts. One enterprise kept him alive in even-numbered years, the other fed him when the political fields were fallow. He also had corporate clients. While George W. Bush was governor, Rove got into a flap for advising corporations on politics — all the while saying he did no lobbying for them. That kind of thing is not unusual in Texas.

Consultants’ calendars sync with officeholders’ schedules, and with political seasons and government seasons. People like Bryan Eppstein of Fort Worth and Ted Delisi of Austin — a couple of names among many — work on or for political campaigns during elections and also register to lobby elected lawmakers for other clients after the elections.

Others continue to advise their political clients during legislative sessions without registering as lobbyists, even though they also advise other clients about politics. They are not lobbying, the story goes, if their other clients did not hire them to advocate for or against issues before the Legislature.

Those arrangements make some people — notably, competing lobbyists — crazy.

From their perspective, the lobbyists contribute to campaigns. The candidates hire consultants to run the campaigns. The candidates become officeholders, and the consultants become lobbyists, competing with the same lobbyists who were among the campaign donors in the first place.

The lobbyists’ frustration is compounded when the consultants work outside the definition of lobbying — in public relations or as political specialists — and thus skip those pesky registration disclosures to show which interests they really represent.

It is a gray zone in the law, but some consultants say the lobbying disclosures apply only to people who are trying to get lawmakers to support or oppose a particular issue or piece of legislation. Warning a member of the Legislature that a particular pending vote has electoral consequences, they argue, is not lobbying, even if the consultant giving the advice is also on the payroll of a firm or organization that might have a close interest in that same pending vote.

And is it threatening someone to tell them that a particular vote could be used against them in a campaign? That is what constituents and activists do every day when they tell state officials how they want them to govern.

The consultants who register as lobbyists — like the Delisis and the Eppsteins — say the solution is found in those disclosures, that the voters and lawmakers know what is going on and have the information they need to connect the dots. They have First Amendment rights, after all, and ought to be able to work in the democracy and also petition the government like everybody else. It is both legal and protected.

Legislators might tweak the disclosures so that the lobby filings link to the campaign reports or list the candidates someone worked for (side effects might include — surprise! — increased political profiling – by partisan identification — of lobbyists).

But to get everybody, lawmakers would have to tweak the definition of lobbying, to catch anyone who gets money for dealing with lawmakers about anything that is potentially coming up for a vote. Given the variety of issues considered by lawmakers, that could be a ridiculously long list.

And what to do with the lawyers, who always muck this up? Suppose a law firm gets hired to lobby for one outfit and to do legal work — not legislative work — for another. It registers as a lobbyist for one, but not the other, right? Suppose a consultant is in the same position, but does not have that legal shield known as the attorney-client privilege with which to leave some clients undisclosed and protected? The first client is for lobbying and the second, say, just wants the consultant’s advice for its political action committee?

So far, nobody has figured out how an ideal disclosure might work. And they cannot stop the consultants from wanting to eat during the political off-season.

Legislators Can Carry Bills That Benefit Them? Yep.

by Emily Ramshaw

Published on January 27, 2013

Sen. John Carona, the founder of Associa, the nation’s largest homeowners association management firm, recalls facing allegations of conflicts of interest in the late 1990s and early 2000s, when the Dallas Republican carried legislation aimed at governing such property owners’ groups.

In 2001, he authored the state’s biggest homeowners association law to date, a measure he said provided a “property owner’s bill of rights” without weakening homeowners associations.

Opponents argued that the law did not go far enough to curb homeowners associations’ power to foreclose on residents’ homes. When a colleague filed a bill in 2003 to make such action more difficult, Carona argued that it would not stop foreclosures and would “devastate homeowners associations throughout the state.”

But by the mid-2000s, Carona had largely steered clear of authoring homeowners’ association bills. He said despite his subject-matter expertise, his business interests had become “a distraction” to concerned advocates for homeowners. Last session, when the Senate debated another homeowners association reform bill, Sen. Royce West, D-Dallas, authored it.

“I quickly came to the conclusion it was better just to stand back,” Carona said, “not because the law required me to but because I didn’t want the criticism.”

Under the Texas Constitution, state lawmakers are not prohibited from authoring or voting on measures that stand to benefit them, so long as they benefit all others in similar circumstances. Indeed, Texas’ citizen Legislature — where lawmakers come to Austin for five months every other year, receive a meager state stipend, and live and work in their home districts the rest of the time — was designed to ensure legislators were in touch with the challenges facing their communities and had expertise in a range of industries.

But the common practice of lawmakers carrying bills or serving on committees that could directly affect their lives or livelihoods has critics, including ethics watchdogs who say it is impossible to tell which lawmakers are working for their constituents and which are consulting their checkbooks.

While many legislators drew in their breath last session when Rep. Gary Elkins, a Jersey Village Republican who is in the payday lending business, took the floor to make a personal plea against saddling his industry with consumer protection legislation, his actions were only unusual because of how brazen he was.

Jack Gullahorn, a Texas ethics expert who represents the state’s trade association for lobbyists, said that if constituents knew their lawmakers’ professional or personal ties, nine times out of 10 they would be fine with them. The problem, he said, is that “the public doesn’t have enough information available about the private interests and relationships of the people that are making the decisions in our Legislature to be able to adequately draw conclusions about whether it’s a good idea or not.”

Family matters

In March 2007, Rep. Harold Dutton Jr., D-Houston, brought three bills up for consideration before the House Committee on Juvenile Justice and Family Issues that he chaired, all designed to benefit parents obligated to pay child support.

One would have required a court setting child support payments to consider factors like the children’s age and the financial resources and earning potential of both parents, including the one with custody. Another opened the door to reducing payments in multi-child families once one of the children turned 18 or moved in with the non-custodial parent. A third would have forced courts calculating unpaid child support to take into account payments made directly from one parent to another, as opposed to through the state’s disbursement unit.

The state’s existing child support rules had “provided a huge benefit to the obligee,” Dutton said at the time, “while putting the obligor at a substantial disadvantage.”

What the Houston lawyer did not add, in his impersonal remarks on the bills that passed the House but never the Senate, was that for years, he had been obligated to pay more than $20,000 in annual child support, according to court records. Several months later, when Dutton’s ex-wife — the mother of four of his sons — accused him of not keeping up with his payments, he argued that his original child support order did not explain whether his payments would shrink once his sons turned 18, and that he had been paying some of his support to her directly, rather than through the disbursement unit. He told a Houston TV station that he stopped making full payments in 2006, because two of his sons had turned 18 and one was living with him.

Dutton’s staff said he could not return phone calls for this article because he was away at a funeral. (In a 2005 Texas Observer story, he responded with a string of expletives to a reporter who asked if his personal experiences with family law guided his legislating.) But Nicole Bates, his chief of staff, said in an email that Dutton filed the 2007 bills in his role as chairman of the now-defunct committee, and on behalf of a father’s rights group, months before his own court case. Even if the measures had passed, she said, they would not have taken effect in time to affect him personally.

“Members have families and yes, some members even pay child support,” Bates wrote. “But to file a bill to somehow gain some personal benefit from it is a stretch.”

Bar business

Rep. Charlie Geren, R-Fort Worth, chairs the House Administration Committee, and said lawmakers in his chamber recuse themselves “all the time” from voting on bills that hit too close to home, especially when those bills come up in committee.

They do it at their own discretion.

In 2005, lawmakers passed a bill targeting run-down bars operating in residential areas or near schools in the state’s biggest metropolitan areas by, among other things, more than quadrupling their wine and beer permit and renewal fees. In the process, the measure inadvertently applied those increased fees to restaurants. Two years later, Geren, one of the sponsors of the bill and the owner of Fort Worth’s Railhead Smokehouse barbecue restaurant, sought to make the fix.

At the time, Geren was vice chairman of the House Licensing and Administrative Procedures Committee, which regulates the agency that oversees alcohol permitting. He authored a bill that came before the committee in March 2007 that would have exempted the “holder of a food and beverage certificate from the higher annual fees applied to wine and beer retailer permit holders.” According to Texas Alcoholic Beverage Commission records, Railhead Smokehouse would have qualified: It received its beer and wine permit in 1995, and had received its food and beverage certificate seven months before the committee hearing.

Asked about the measure last week, Geren said he would “have to go back and read it” to be sure it had affected his restaurant. Even if it had, he said it applied to so many businesses that it would not have presented any kind of conflict.

The bill, which was voted out of committee unanimously, made it through the House and Senate before being vetoed by Gov. Rick Perry, who said that increasing permitting fees for neighborhood bars while exempting restaurants was “intended to price out businesses from existence.”

'You have a choice'

Sen. Leticia Van de Putte, a pharmacist and San Antonio Democrat, said she has no qualms about filing pharmacy-related bills. She has paid her dues, she said: When she was first elected more than two decades ago, the attorney general’s office advised her that she could not be a legislator and have a state Medicaid contract to cover her pharmacy’s many low-income patients.

Van de Putte said she sold the pharmacy, her family’s primary source of income at the time, at a loss of $100,000 to stay in the Legislature — only to watch the state reverse course with future lawmakers in response to a federal decision. She said she files pharmacy bills with the knowledge that she knows more about the industry than her colleagues, and the comfort that there is nothing she could pass that would recoup her state-induced losses.

“I don’t know of any other person in the Legislature who the state has told, ‘You have a choice, either sell your business or don’t serve,’” she said. “When I author bills, I do it very proudly.”

Some Public Business Remains in the Shadows

by Ross Ramsey

Published on January 28, 2013

For all of the public love politicians give to transparency these days, the state keeps a lot of information out of sight, or in places where it is really inconvenient to view.

Their personal financial statements, for instance, don’t have a specific online residence, and because of filing deadlines, are often way out of date. Lawmakers file the forms on paper. Anyone who wants to peek must visit the Texas Ethics Commission in Austin or send a request and wait by the mailbox. (The Texas Tribune has requested, paid for and posted the disclosures online, but the state hasn't done so.)

It’s translucent, but not transparent.

Money spent during the last week of a campaign doesn’t have to be disclosed until after the election. The last report is due eight days before Election Day, and the next one isn’t due for weeks. Campaigns have to report donations during that last week, but not spending. That means when voters cast ballots, they aren’t aware of Hail Mary advertising buys and late get-out-the-vote efforts.

It’s one of those “man on the moon” questions, as in: Why is it they can put a man on the moon, but they can’t file instant — or daily — reports on campaign spending?

It’s opaque, unless you count historical access as transparency. Information that isn’t available to the decision-makers before they go to the polls hardly improves their decisions.

Lawyers, for perfectly good reasons, don’t have to disclose their clients’ names; those clients, after all, have a right to hire their lawyers without telling everybody else they’ve done so. But on the public official side, that creates a loophole big enough for a paddy wagon; a legislator-lawyer doesn’t have to tell the rest of us when a bit of official business might benefit one of his or her unnamed clients.

Consultants don’t have the attorney-client privilege that lawyers do, but lawmakers can — and do — list consultant as their occupation without telling us whom they’re being paid to advise.

That describes the swap for a citizen Legislature. If legislators are supposed to have real jobs, they’ll run into conflicts. But they can run into conflicts even when they don’t have real jobs — or did you forget about the full-time Congress?

Disclosure is supposed to be the remedy. It would be one thing for a legislator to vote in his or her own interests in the dark, and another to do so where voters, future opponents, reporters and other lawmakers can see what he or she has done. At some point in every session, a senator or state representative will jump up and vote for something like that — whether it’s Rep. Gary Elkins, R-Jersey Village, debating a payday lending bill in 2011 while pointing to his ownership of a payday lending operation as proof of his expertise — or every civil lawyer in the Legislature voting on tort reform bills that change the laws they work with in their real jobs.

Formal recusals don’t happen often. Rep. Donna Howard, D-Austin, recused herself in 2011 when the House was deciding whether she or her opponent had won a close election in 2010. Speaker Joe Straus, Republican of San Antonio, entered a statement in the House Journal in 2009 saying he would recuse on “matters related to the expansion of gambling at parimutuel racetracks in Texas” — a business his family was involved in. As a representative in 2003, Gene Seaman, R-Corpus Christi, recused himself from voting on a regional tax that had a direct impact on several of his properties.

That's it for the official record — what's recorded in the House and Senate journals — since 2003. Sometimes, members “vote a white light” — which means they’re present but not voting yes or no — without saying why. Votes like that and votes that raise eyebrows are a lot more common than formal abstentions.

This is allowed: voting on a bill that affects everyone in your industry — doctors on health care, lawyers on law, farmers on agriculture, etc. This is not allowed: voting on a bill that benefits a lawmaker’s own business in particular.

It’s a fine distinction, but an important one, separating personal interests from broader industry or community interests. And it doesn’t work if there’s no disclosure to the rest of us — if the decision-makers are separated from information that would be useful in their decisions.

That connection, or the lack of it, is why transparency is so popular.

Before Changing Chairs, Ethics Commission to Renew a Debate

by Emily Ramshaw

Published on January 29, 2013

The Texas Ethics Commission’s board convenes Thursday to choose new leadership for 2013 — a year when the agency is facing legislative scrutiny and a likelihood of reform.

But before that happens, its commissioners will review an ethics opinion they did not agree on two months ago, over the role the state’s elected officials can play in nonprofit organizations.

Attorneys at the Ethics Commission, a depository for financial, campaign and lobby filings that also advises legislators on how to interpret state law, provided their eight commissioners with a draft opinion late last year suggesting that legislators should not be paid to lead nonprofit organizations if they solicit financial contributions for those organizations. Such a relationship “creates the appearance that the contribution might be made to inappropriately influence the legislator,” the draft opinion said, arguing that contributions to the nonprofit from lobbyists or special interest groups “could reasonably be expected to impair" the lawmaker's "independence of judgment in the performance of official duties.”

But some of the commissioners — who are appointed by Gov. Rick Perry, Lt. Gov. David Dewhurst and House Speaker Joe Straus, and serve four-year terms — were dissatisfied with the original opinion. Vice Chairman Jim Clancy, a Perry appointee who on Thursday is expected to be elected chairman for the next year, argued that it would dramatically limit the employment opportunities of part-time legislators working back in their communities. Clancy suggested that preachers, for example — who must pass the offering plate to pay themselves a salary — would be hard-pressed to serve their flock and serve in the Legislature under such an interpretation.

“We pay our legislators, what, $6,000, $7,000 a year?” Clancy said at the November meeting, adding, “If we’re going to have a citizen Legislature, they’re going to be involved in stuff.”

A vote on that issue was tabled in November, and the opinion was sent back to Ethics Commission staff for revision. Clancy said the opinion commissioners are expecting to vote on this week will not advise lawmakers against being employed by nonprofits and soliciting funds for them concurrently.

The concern with the previous version, he said, was that it seemed to “categorically say that’s illegal or unethical,” putting “the candidate or officeholder in a very difficult position.” An opinion approved by the commissioners becomes the standing legal guidance for lawmakers on that particular ethical issue.

“There’s a line that can’t be crossed — it can’t just be a position [at the nonprofit] that’s a figment of someone’s imagination,” said Tom Ramsay, a former lawmaker and the outgoing chairman of the board. “But we just don’t need any more rules or regulations.”

Another opinion that sharply divided the board in November — one dealing with rewards points on campaign credit cards — won’t be on Thursday’s docket; it was taken off the table entirely.

Commission lawyers had drafted an opinion stating that candidates should not use the rewards points that accumulate on their campaign credit cards for personal purposes — hotel stays or airfare, for example — if the credit card bill was paid with the proceeds of political contributions. They argued it was a conversion of “a political contribution to personal use,” which is prohibited by the state’s Election Code.

Again, some commissioners — who had tabled the issue at their August meeting — disagreed.

Clancy was one of the most vocal, calling the bookkeeping for such a provision “a nightmare.” He said there was good reason many corporate employers, the Federal Elections Commission and the Internal Revenue Service don’t prohibit the practice: “This is how the world works.”

His argument sparked a reply from the Texas Ethics Commission’s executive director, David Reisman, who defended the opinion and said candidates who can’t keep their records straight simply shouldn’t cash in their rewards points.

“If you’re running for office, you have an obligation” to keep it straight, Reisman said. If you don’t, he said, “you’re using campaign money, you’re using other people’s money, to enrich yourself.”

In the end, the vote on the opinion was tied — meaning the Ethics Commission could not rule. It was the first time that had happened since 2004, agency general counsel Tim Sorrells said.

Clancy said that inaction doesn’t mean that the personal use of campaign credit card points is “necessarily right or wrong.” It means that lawmakers must rely on existing law — in this case, an Election Code that says nothing specific about rewards points — to decide how they want to proceed.

“I think the commissioners were concerned that something people do every day shouldn’t be treated as unethical,” Clancy said.

But Ramsay, the outgoing Ethics Commission chairman, said that if he were still in the Legislature, "I would not be using those bonuses and points and money personally."

"I think it's clear in statute that whatever is earned, whether interest, or bonus points or whatever that's earned off of money in your campaign, stays in your campaign," he said.

The Ethics Commission is up for "sunset" review in the current legislative session, a time when agencies usually face major reform legislation based on the recommendations of a state panel. That panel has recommended strengthening the agency's enforcement power through changes to its investigations process, decreasing fines for minor reporting errors and finding resources to update the agency's outdated technology.

“If politicians had their way, and I was one for 12 years, we would not have liked to have an Ethics Commission,” Ramsay said. “But we needed one. There was way too much stuff that needed the light of day to shine on it.”

Ethics Opinion Lets Lawmakers Work, Solicit for Nonprofits

by Ryan Murphy

Published on January 31, 2013

In a unanimous decision on Thursday, the Texas Ethics Commission's board approved an amended advisory opinion that stopped short of recommending against lawmakers soliciting contributions for nonprofit organizations they are employed by. Instead, the opinion encourages lawmakers to understand that such contributions "could be viewed as improper under certain circumstances."

The opinion was designed to address three main issues: Is it legal for a lawmaker to be compensated by a nonprofit organization? Can a lawmaker legally solicit donations for such an organization? And, finally, is seeking those donations something lawmakers should do, if they are employed by the nonprofit?

Ethics Commission lawyers, who drafted the original opinion, felt that the first two were legal, but said lawmakers shouldn't seek donations for the non-profit if they were also employed by it.

Commissioners felt this was too harsh.

"I run a nonprofit, and this kind of opinion presumes I am inclined to break the law," said Commissioner Hugh Akin. Akin disagreed with the idea of singling out lawmakers working in charitable or nonprofit environments, because they are "already not making much anyway." In the amended opinion they approved, commissioners removed an entire paragraph that detailed why ethics lawyers felt lawmakers working for nonprofits should not solicit donations, and softened all language that said so.

The commission originally drafted the opinion at the request of state Rep. Matt Krause, R-Fort Worth, who heads a nonprofit called Torch of Freedom, a leadership training organization that hosts and trains high school and college students through mock government exercises at the Capitol. Krause said he didn't see anything wrong with soliciting for donations, but he wanted the support of the commission on the issue.

Krause, who made an appearance at the meeting, worried the commission's lawyers' original draft of the opinion would've put lawmakers in a difficult position.

"I would have read it as 'I shall not do that,' not that 'I should not do that,'" Krause said.

Although the advisory opinion was originally tabled by the board back in November and sent back to the Ethics Commission for revision, no changes were made to the text used on Thursday. The opinion addressed today was identical to the one from last year.

Texas Ethics Reform: A Long, Tortured History

by Jay Root

Published on February 1, 2013

There was no reason to suspect that the 1971 session of the Texas Legislature would be much different from the ones that preceded it.

Gov. Preston Smith and Lt. Gov. Ben Barnes were coming off re-election victories. A fellow Democrat, state Rep. Gus Mutscher, of Brenham, was flexing his muscles as a second-term House speaker. Preparations for an elaborate January inaugural celebration, with a parade in downtown Austin and musical entertainment by Wayne Newton and Faron Young, were in full swing.

But on the eve of the inauguration, investigators from the federal Securities and Exchange Commission dropped a political bomb in a Dallas courtroom, alleging a far-reaching stock manipulation scheme hatched by top business and political leaders. As word trickled down to Austin the next day, the mood at the Capitol turned from cheerful to anxious. The day after that: horror.

It became known as the Sharpstown scandal, and thanks to the reforms it eventually spawned, no controversy before or since has had as much impact on Texas politics.

“That scandal was about changing the mores and folkways,” said former state Rep. Lyndon Olson, D-Waco, who was elected in 1972 in the aftermath of the fury over Sharpstown. “I think the times caught up with the way the Legislature did business.”

Despite the major reforms passed in Sharpstown’s wake, the current Legislature is again facing criticism over flimsy disclosure rules, legislative conflicts of interest, lobbyist wining and dining and high-flying lifestyles fueled with unlimited special interest donations.

The matter at hand in 1971 was legislation sought two years earlier by Frank Sharp, a businessman who developed Houston’s Sharpstown district and had cultivated friends in high places. In exchange for the Legislature passing favorable banking bills, Sharp helped lawmakers and other politically connected friends get loans to buy stock in his insurance company, which produced $250,000 in quick profits, according to the 1972 book Texas Under a Cloud.

As the scandal unfolded, a harsh light exposed some of the darkest corners of state government, where lobbyists doled out money in exchange for legislative action, lawmakers enriched themselves with tax dollars and weak disclosure rules ensured the public did not know about it.

After the story broke, reporters and prosecutors found other abuses, including widespread (and illegal) hiring of relatives, politicking on government time and theft. Some lawmakers had stolen their government stamp allotments, cashing them in to buy cars or, in one case, to pay off a loan.

By the time of the next elections, Mutscher, the speaker, was a convicted felon (his conviction was later overturned), as were a top aide and fellow House member. Smith, the governor, was labeled an unindicted co-conspirator. Barnes, though never implicated, saw his promising political career ended by Sharpstown’s taint.

Several legislators decided not to run for office again rather than face the electorate’s wrath. At least one, state Rep. Walter Knapp, D-Amarillo, went to prison in a stamp theft case and later fatally shot his ex-wife before killing himself. Before the next session, about half of the legislators had been voted or shamed out of their jobs, paving the way for one of the youngest and largest groups of freshman lawmakers the state had seen.

“It was truly a renaissance for Texas,” said Kraege Polan, a former aide to House Speaker Price Daniel Jr., who spearheaded most of the post-Sharpstown ethics reforms.

There had been scandals before Sharpstown, of course, and others would follow. Former Gov. James E. Ferguson, known as Pa, was impeached in 1917 for misapplication of public funds. The administration of his wife and successor, Gov. Miriam A. Ferguson, known as Ma, was dogged by allegations of corruption, namely the selling of pardons.

In the mid-1950s, The Cuero Record exposed the Veterans Land Board scandal. Ken Towery, the newspaper’s managing editor, won a Pulitzer Prize in 1955 for helping to set off the criminal investigation that sent Bascom Giles, the land commissioner, to prison for defrauding unsuspecting and often illiterate war veterans.

What sets Sharpstown apart are the deep reforms that were passed in its wake. While the abuses in the 1950s triggered passage of a “code of ethics” that barred lawmakers from engaging in conflicts of interest, the law was quickly considered ineffective.

Before Sharpstown, lawmakers could raise and spend campaign money with no meaningful disclosure. They were not required to file public reports about their income, holdings and liabilities. There was no open records law, little oversight of lobbyists and hardly any incentive to conduct the public’s business in the open.

Donations could be made by check or cash, and it was customary for lawmakers to disclose only what their contributors agreed to allow; the rest was given in secret and dispensed in whatever manner the official saw fit. A loophole allowed politicians to give money, impossible to trace, as “friends of” the candidate, recalled Buck Wood, a lawyer who helped write many of the 1973 reforms as a lobbyist for the watchdog group Common Cause.

“Nobody really disclosed anything,” Wood said. “If you were running for statewide office, you disclosed the dollars that you thought would make an impression on somebody, and if they didn’t want to be disclosed, then you called them friends of whatever.”

The 1973 Legislature also passed the first freedom of information law, a modern open-meetings bill, the first serious lobbyist regulation act and a tough-fought requirement that top elected officials and political appointees file public financial disclosure statements.

Despite the public clamor for transparency, getting the reforms passed was anything but easy. Woods remembers House members sleeping on cots inside the Capitol as a recalcitrant Senate finally passed the legislation in the waning hours. The old “moss backs” he said, had no interest in revealing their sources of income.

The reforms did not stop ethics controversies. Like accountants who discover legal ways to avoid taxes, political operatives found loopholes — a complaint still heard today.

In 1980, Speaker Billy Clayton was at the center of Brilab, a bribery investigation involving a $5,000 cash contribution. Clayton was indicted but then acquitted because he had never deposited the money. He said he had intended to return the cash — which he left in a credenza in the Capitol — to the donor.

The following year, Clayton passed an ethics bill limiting cash contributions to $100.

Nearly a decade later, ethics reform was again front and center after another series of controversies. In a 1989 special session on benefits for injured workers, the chicken magnate Bo Pilgrim was spotted passing out $10,000 checks on the Senate floor.

A year later, a Travis County grand jury indicted Speaker Gib Lewis, who was accused of accepting an illegal gift and not reporting it. Lewis accepted a plea deal; he admitted to a misdemeanor violation, paid a $2,000 fine and agreed to give up his seat, according to the 2010 book The House Will Come to Order.

With those controversies as a backdrop in 1991, Ann Richards, the newly elected governor, helped push through the last wholesale ethics reforms in Texas. Among other things, lawmakers created the Texas Ethics Commission, banned donations inside the Capitol and imposed new restrictions on lobbyists. The reforms also required lawmakers to reveal their business dealings with lobbyists.

Watchdogs say the rules still did not go far enough, but Chuck McDonald, a former aide to Richards, said the legislation barely passed as it was — just before midnight on the last day of the 1991 session.

“There is really nothing harder than passing ethics legislation,” McDonald said. “I don’t know if they would admit this, but I think everyone feels like once you’re in that incumbency position, then the system benefits you, so changes level the playing field.”

For Lobbyists, They're Gifts That Keep On Giving

by Emily Ramshaw

Published on February 6, 2013

In 2011, lobbyist James Frinzi approached state Rep. Rafael Anchia and asked him to carry a bill on electric car charging stations. Anchia agreed, so long as Frinzi got the testimony lined up when the bill came up in committee.

But when the measure came up, no one was there to speak in favor of it, leaving the Dallas Democrat steamed. Not long after, an unexpected and unwanted apology gift from Frinzi arrived in Anchia's office: a baseball signed by former New York Yankee and Hall of Famer Reggie Jackson.

The culture of gift-giving is alive and well in the Texas Capitol, and lobbyists are the chief benefactors.

They butter up legislative buddies with sports tickets, golf gear and hunting trips. They treat committee staffers and friendly chiefs of staff to spa treatments, cigars and bottles of liquor. They hit up the wedding and baby shower registries of lawmakers and their relatives.

And they never, ever pass up an occasion to deliver flowers.

“There’s a basic psychological principle, that if you associate somebody with pleasure, whether it be a gift or a fancy trip, that you will go out of your way to try and please them, to return the favor,” said Tom “Smitty” Smith, Texas director for Public Citizen, a consumer watchdog group.

Under the state’s ethics code, lobbyists are allowed to give gifts to lawmakers, state employees or their immediate family, as long as the value does not exceed $500 per calendar year. A provision added in 2007 permits a lobbyist to give a gift worth more than $500 if he or she shares the cost with another registered lobbyist, a relatively common practice.

That meant that in 2009, Robert Saunders, a lobbyist for Texas Disposal Systems, could team up with some of his colleagues in the lobby to buy four members of the Texas House .22 caliber semiautomatic rifles from a company that boasts on its website: “Don’t leave civilization without one.”

“I had the ability to go buy a rifle — my background check cleared — so I bought them, paid for them and collected money for them,” Saunders said of the gifts, made to former Reps. Mark Homer, D-Paris; Chuck Hopson, R-Jacksonville; Jim McReynolds, D-Lufkin; and now-deceased Rep. Ed Kuempel, R-Seguin.

That same year, Saunders also purchased Nikon binoculars for all members of the Texas Senate ahead of a safari-themed party thrown at the company’s exotic game ranch and entertainment pavilion near Creedmoor.

“Again, we collected funds from a number of lobbyists, and we had an amount in addition to what we needed to pay for food and entertainment, so I said, ‘Let’s give them gifts,” he said.

Among lobbyists’ more recent gift-giving, according to their ethics filings:

- Last year, state Rep. Ana Hernandez Luna, a trial lawyer and Houston Democrat, received a $270 high chair for her newborn from Russ Tidwell, the lobbyist for the Texas Trial Lawyers Association. Tidwell characterized the lawmaker as a good friend he’d known for years: “I wanted to give her a special gift for her first child.”

- In 2011, Chris Shields, a longtime lobbyist with a laundry list of clients, gave Gov. Rick Perry more than $350 worth of wine; three years earlier, Shields gave state Rep. Warren Chisum, then the House Appropriations Committee chairman, the mounting crate and shipping for a stuffed goose, valued at more than $350.

- In 2011, Eric Craven, the lobbyist for the Texas Electric Cooperative, reported giving the clerk for the House State Affairs Committee a spa package valued at more than $350.

- In 2009, Hugo Berlanga, a former lawmaker and lobbyist with energy, wind and transportation clients, gave current state Rep. Yvonne Davis and then-state Rep. Terri Hodge, both Dallas Democrats, Cowboys football tickets worth a combined $1,500. Berlanga said he had season tickets, and that the seats he gifted to the lawmakers “would’ve been for an exhibition game.”

- That same year, the lobbyist for the Keystone Ranch in Pearsall gifted Conroe state Rep. Brandon Creighton, a Republican, a dove-hunting trip valued at $300.

“Lobbyists are experts at figuring out what is most important to various members of the Legislature,” Smith said, “and figuring out ways to fill that need so they will get repaid in kind when they need a favor.”

Longtime Austin lobbyist Bill Miller said the point of giving lawmakers and their staff members gifts isn’t nefarious. It’s to “show you’re paying attention, to show you care, to show some degree of connection.”

Miller’s firm, HillCo Partners, doesn’t give “grand gifts,” he said; it sticks to flowers or gift baskets. “If you have to go to great lengths to remind someone that you’re out there, you’re probably not doing much of a job the rest of the time,” he said.

But he said it’s important to note that it’s not just lobbyists trying to curry favor with lawmakers; many lawmakers have come to expect it. “It’s not a one-way street,” Miller added. “They like gifts. They’re not like, ‘Gee, don’t give that to me.’”

In the case of Anchia and the signed baseball, the gift backfired. Frinzi, who says he missed the hearing because he was at a charity luncheon for children with disabilities, is a big Reggie Jackson fan, and figured it was a perfect gift for Anchia, whom he knew to be “a baseball guy.” But Anchia, who grew up an ardent Cincinnati Reds fans, actually despised the Yankees — and particularly disliked Reggie Jackson. He has no idea where that baseball ended up, he said.

“It goes to show,” Anchia said, “that not all gestures are appreciated.”

Bills Renew Push for Ethics Commission to Post Financial Disclosures Online

State Rep. Donna Howard, D-Austin, and Sen. Rodney Ellis, D-Houston, each filed legislation on Thursday that would require personal financial statements submitted to the Texas Ethics Commission to be made available online.

Senate Bill 417, filed by Ellis, would require the Ethics Commission to make financial disclosures available no later than 10 business days on the commission’s website. The bill would also require the commission to group these filings together by office sought and/or being held.

“I filed this legislation because I believe in transparency, open government and technology," Ellis said in an email. "Legislators already disclose this information, and campaign finance reports are available online, so it should not be difficult to make this happen.”

In addition to requiring that disclosures be made available online, Howard's House Bill 1074 would also remove a portion of the law that excluded the disclosure of financial activity by a candidate’s dependent children if the candidate had no direct control over the activity. Also, the bill would require the identification of “any other source of earned or unearned income, including a pension, individual retirement account, or other retirement plan.”

In a news release, Howard said that her bill "addresses concerns about potential gaps in reporting requirements with the goal of strengthening public confidence in state government and its officers." She added that "Texans should not have to rely on the media or other sources to gather and post information that, by the law's intent, is designed to be available to the public.”

The absence of pension information on state disclosures gained attention after Gov. Rick Perry's failed run for president. His federal financial disclosure statement noted his official retirement through the Employee Retirement System. Under current state rules, lawmakers that have retired through the ERS are not required to disclose pension collections on the state disclosures.

HB 1074 also creates an interim committee to “study and review the procedures and effects of the filing of personal financial statements.” HB 1075, also filed by Howard, would provide details on the makeup of that committee. The bill would create an 11-member committee comprising five members appointed by the lieutenant governor, five by the speaker of the House and one by the presiding officer of the Texas Ethics Commission.

Efforts to push personal financial disclosures online are not new, and they aim to implement a recommendation pitched during the Ethics Commission’s sunset review last year. A Sunset Advisory Commission staff report recommended that a better system for electronically filing personal financial statements should be instituted, and the report also suggested they be made available online. As reported by the Austin American-Statesman last June, the Sunset Advisory Commission unanimously rejected the portion of the proposal regarding online availability, instead acknowledging that there are “other areas in personal financial statement reporting that need to be addressed.”

Despite Reforms, Elected Officials Can Still Lobby

by Aman Batheja

Published on February 8, 2013

Ten years ago, the Texas Legislature passed laws to clamp down on lawmakers lobbying state agencies on behalf of private clients. Despite the reforms, some elected officials continue to find work lobbying, or something that resembles it in the eyes of critics.

In some cases, legislators have worked to help clients gain favorable outcomes from elected bodies in their legislative districts. In others, an elected official’s work as a lawyer has blurred the line between lobbying and legal advocacy.

Critics see those cases as symptomatic of bigger problems in Texas, where the part-time citizen Legislature faces criticism over weak disclosure rules, conflicts of interest and special-interest donations.

“When you’re a member of the Legislature that holds policy decisions, budgeting decisions or other decisions over local governments, you should not be able to represent parties before those governments,” said Craig McDonald, director of the liberal watchdog group Texans for Public Justice.

For companies or private citizens hoping to influence decision-makers at state agencies, hiring a well-connected elected official was a common practice until the efforts of two Republican lawmakers on behalf of an herbal supplement firm came to light in 2002.

The lawmakers, Sen. Jeff Wentworth of San Antonio and Rep. Rick Green of Dripping Springs, worked to persuade the state health department not to require prescriptions for Texans taking Metabolife International’s weight loss products that included ephedrine, a stimulant linked to various adverse reactions. Wentworth also visited state staff and board members involved in the decision.

Amid the ensuing scandal, Gov. Rick Perry signed an ethics overhaul package that barred lawmakers from representing private interests before agencies, except for a few situations like submitting paperwork.

Former Rep. Steve Wolens, D-Dallas, who has helped pass several ethics bills in the Legislature including the 2003 measure that addressed lawmakers acting as lobbyists, said that bill did not go far enough. Wolens said he remains troubled that state law fails to prevent lawmakers from being paid to influence the outcomes of measures before city councils, school boards or other local entities.

“It’s still problematic, since the state decides the fate of counties and cities for all kinds of things,” he said. “That should equally be prohibited. It’s like ‘What are we thinking allowing that still?’”

Rep. Senfronia Thompson, D-Houston, recently registered as a lobbyist in her home city on behalf of Linebarger Goggan Blair & Sampson, an Austin law firm. The firm has debt collection contracts with public entities around Texas and has been tied to scandals involving the bribery of public officials.

Thompson, a lawyer who has done work for the firm for years, said a confidentiality agreement barred her from discussing that work. She and the firm did not respond to requests for comment for this article.

Rep. Garnet Coleman, D-Houston, who has held his seat since 1991, registered as a lobbyist in Houston in 2000 for several companies, including Enron and the Greater Houston Transportation Company, a cab provider. Two years earlier, he lobbied the City Council for Sprint PCS regarding regulation of cellular towers.

Coleman said he saw no conflict between his public service and his work as a private citizen.

“Clearly, this had nothing to do with state government,” he said.

Over the last decade, Coleman has not registered as a lobbyist, but he has worked as a consultant for companies hoping to gain a favorable vote from the City Council, including Southwest Airlines and Cigna. He said he stopped registering as a lobbyist because he no longer tries to directly influence council members.

“I don’t lobby the council,” Coleman said. “I advise clients.”

He said he had turned down clients he suspected wanted him to use his clout as a legislator for private matters.

“It’s not me that’s valuable,” Coleman said. “It’s my skills.”

Even when lawmakers are not lobbying in the traditional sense, their private-sector work can dovetail with their jobs as elected officials in a way that can raise conflict-of-interest questions.

Rep. Harold Dutton Jr., D-Houston, is a lawyer who has worked on behalf of charter schools that faced being closed by the Texas Education Agency over academic or financial issues. Dutton has been critical of the agency’s handling of charter schools, including ones he has represented. During a House debate on the budget during the 2011 session, he proposed an amendment to pull the agency’s financing. Dutton did not respond to requests for comment.

McDonald, of Texans for Public Justice, said state officials might respond to a lawyer’s public remarks differently and even handle a case differently if they know that lawyer will later help shape and vote on the agency’s next budget.

“There’s a lot of policy work that can happen behind the scenes or even in public that doesn’t meet the strict definition of lobbying, if you will, but that doesn’t mean it’s not lobbying,” McDonald said.

Some kinds of lobbying remain legal for state lawmakers, but then voters have an opportunity to weigh in.

Former Rep. Robert Miklos, D-Dallas, was a registered lobbyist in Dallas in 2010, the same year he lost his re-election bid to Republican Cindy Burkett. During the campaign, Burkett aired an ad highlighting Miklos’ ties to lobbyist work done by his firm.

Former Rep. Bill Siebert, R-San Antonio, had been in office for six years when news reports revealed that he had lobbied the San Antonio City Council for a private firm without having registered as a lobbyist. Siebert blamed the oversight on a miscommunication between his office and City Hall. But the issue dominated his 2000 re-election bid, which he lost.

“I felt it was a little bit unjust at the time,” Siebert said. “The issue of my being a conservative legislator in the district played no role. It was all based on my lobbying of City Hall.”

Siebert, who still works as a lobbyist, maintains that his work on behalf of private clients never conflicted with his work as a legislator.

“My job was to educate the couple of City Council people that I talked to,” he said. “These elected officials at the county and the city are very strong people. They represent their constituents, and I don’t think that a state legislator can apply undue pressure on them to do something they don’t want to do.”

Voters do not always view experience as a lobbyist as a strike against a candidate. Thomas Ratliff had worked as a lobbyist for more than a decade when he won a spot on the State Board of Education in 2010. Ratliff, a Republican, said that none of his clients had ever hired him to lobby the board and that he continues to avoid such work.

Ratliff said his openness about his lobbying work has protected him from criticism. On his campaign website, he links to the site for his lobbying business, which lists his clients.

“The vast majority of people in my district that I hear from think it’s an asset that I’m doing what I’m doing,” Ratliff said, “because I know how the process works.”

Some Lawmakers and Lobbyists Tied by Blood

by Ross Ramsey

Published on February 8, 2013

John Pitts has a provision in his lobby contracts that tells his clients they are hiring him to lobby everyone at the Texas Capitol — except for the chairman of the House Appropriations Committee.

That’s his twin brother, Jim Pitts, R-Waxahachie.

“When I have a wet umbrella in my hand at the Capitol, I don’t leave it in his office,” the lobbyist said. In his estimation, the appearance of a conflict wouldn’t do either one of them any good.

“I do get approached by clients who want me to lobby him, and I probably lose some business because of it,” he said. “Some of them take a walk.”

In a state capital where moving from the Legislature to the lobby — and, sometimes, the other way — is unremarkable, it’s also common to find the relatives of lawmakers working with state government.

John Pitts got the idea for the contract clause from Thomas Ratliff, whose family is sort of a Petri dish for relatives in and out of office.

Thomas Ratliff is an elected member of the State Board of Education and a lobbyist by trade. His father, Bill Ratliff, now lobbies everyone except family members for Raise Your Hand Texas, a public education advocacy group, and is a former lieutenant governor and state senator.

Bennett Ratliff — Thomas’ brother, and Bill’s other son — is a freshman member of the Texas House, serving as a Republican from Coppell.

Bill Ratliff and Thomas Ratliff developed a system. Thomas would let an aide to his father know what legislation he was lobbying, and the aide, without being specific, would keep his father out. When Bill Ratliff was lieutenant governor, the Senate parliamentarian was the gatekeeper, alerting him to hand the gavel to someone else — a senator — when legislation Thomas Ratliff was involved in was up for debate.

“You almost have to try to be Caesar’s wife — you don’t want anything that even looks like a conflict,” Bill Ratliff said. “Had we not handled this correctly, it would have been a problem every time.”

The Ratliffs aren’t the only ones dealing with this particular challenge.

Rep. Jimmie Don Aycock, R-Killeen, is chairman of the House Public Education committee, and his daughter, Michelle Smith, is an education lobbyist. Rep. Mark Strama, D-Austin, has a brother, Keith, who lobbies. Chris Keffer, son of Jim Keffer, R-Eastland, the chairman of the House Energy Resources Committee, is registered. So is Whitney Whitmire, whose father, John Whitmire, D-Houston, is chairman of the Senate Criminal Justice Committee.

Aycock said he would rely on his vice chairwoman, Alma Allen, D-Houston, when his daughter’s clients have something in his committee. “I will probably hand the gavel to Alma and go have a cup of coffee,” he said, adding that he wants to make sure people know his daughter “doesn’t have an inside track.”

Sometimes the appearance of things that could go wrong is stronger than the things that actually do go wrong. Most legislators with these kinds of apparent conflicts — as opposed to those who have actually taken advantage of their relationships — are up front about it. For one thing, the names offer a form of disclosure; it’s not hard to track, say, a Ratliff back to his or her home base.

“I don’t talk about clients with him or about issues,” Adam Goldman, a lobbyist, said of his brother, Rep. Craig Goldman, R-Fort Worth. “And my clients know there’s one officeholder I can’t touch.”

It’s not only the officeholders with reputations to protect. Several of the lobbyists with lawmakers in their families said they have been contacted from time to time by clients trying to get close to their relatives. It’s best to turn those offers away, they said.

“I wanted to be careful not to embarrass my dad,” Thomas Ratliff said. “I didn’t want to be the Billy Carter of the family.”

Leaving the Legislature, but Not Going Too Far

by Aman Batheja

Published on February 11, 2013

It is a familiar sight at the start of every legislative session in Austin.

The latest batch of former legislators, who have left their House or Senate seats either by their own choice or that of the voters, invariably includes some who quickly begin careers as lobbyists hoping to influence former colleagues on behalf of deep-pocketed clients.

A handful of lawmakers and critics have pushed for years to close the “revolving door," as the practice strikes them as unethical or unseemly. In a part-time citizen Legislature whose conflict-of-interest rules have been questioned, such a situation only adds to the calls for change.

“I think it’s very important that we send a clear signal to the citizens that if you’re a legislator, that it’s not a steppingstone to a half-a-million-dollar-a-year lobbying job,” said Sen. Dan Patrick, R-Houston.

Last month, eight former House members, all Republicans, registered as lobbyists with the Texas Ethics Commission soon after their replacements were sworn in.

In many cases, former lawmakers are lobbying for companies on issues in which they gained expertise while in office. Rob Eissler of The Woodlands headed the House Public Education Committee last session; now his clients include the Harris County Department of Education. Vicki Truitt of Keller is lobbying for the Texas Retired Teachers Association and payday lender ACE Cash Express after previously leading the House committee that dealt with pensions and financial services.

Former Reps. Mike "Tuffy" Hamilton of Lumberton, Rick Hardcastle of Vernon, Chuck Hopson of Jacksonville, Jim Jackson of Carrollton, Aaron Peña of Edinburg and Burt Solomons of Carrollton are also now lobbyists in Austin.

Last month, Jackson joined the staff of Texas Legislative Associates, an Austin lobbying firm that brags on its website about the ability of its staff of “former legislators and agency executives” to provide clients “extraordinary access to key policy makers.”

“I’m not ever going to be a big-time lobbyist,” said Jackson, who did not seek re-election in 2012. “I just wanted to stay in the game, and I’m enjoying myself.”

Jackson took issue with the notion that his quick turn into lobbying could be viewed as inappropriate by fellow colleagues or former constituents.

“It’s like anything else,” he said. “Experience always helps.”

In 2006, the Center for Public Integrity found more than 1,300 former lawmakers registered as lobbyists around the country. Texas had the most, with 70.

Thirty-five states require a “cooling off” period before legislators can begin lobbying their state government, according to the National Conference of State Legislators.

Both state Rep. Donna Howard, D-Austin, and Patrick have filed bills this session similar to ones they have offered in the past, adding Texas to that list. Howard wants legislators to wait two years. Patrick thinks they should be barred from lobbying for the two regular legislative sessions after they leave office.

Howard noted that Texas already required some employees of regulatory agencies to take two years off before lobbying their former employers.

“It seems to me if we’re going to require that of our state employees, we should require it of state legislators,” she said.

Pension Privacy Gets Attention of Legislators

by Jay Root

Published on February 13, 2013

State elected officials, from the governor on down, have the kind of pension benefits that people in the private sector can only dream of. The benefits are vested after just eight years. They can retire at age 50 with 12 years of service. There are multiple avenues to boost their pension amount. There is even a provision allowing them to double dip their salary and retirement benefits.

And it is all completely secret.

Individual records held by the state’s public pension systems — including the one that state lawmakers pay into — have an airtight exemption from the landmark 1973 sunshine law that was designed to let taxpayers know how public money is being spent. The secrecy has made it difficult for voters to know what kind of pension benefits their elected representatives are getting — or helping give to others.

Now some lawmakers want to start peeling back the layers of pension privacy, both for the Legislature and various public retirement systems that state and local policymakers say have been reluctant to cough up information about the health of their retirement plans. State Rep. Bill Callegari, R-Houston, chairman of the House Pensions Committee, has filed House Bill 13, designed to increase and standardize reporting requirements for all public pension systems in Texas.

State Rep. Giovanni Capriglione, R-Southlake, wants to repeal altogether the provision that makes the records private. He said his legislation, HB 526, would shed light on controversial practices like large lump sum payments and salary “spiking” — a tactic that workers sometimes have used to boost their retirement benefits right before they leave their jobs. Capriglione said he doesn't want the state to release sensitive personal information like account numbers or home addresses.

Capriglione’s measure would also allow citizens to see what state pension benefits their current and former legislators are receiving. Although members of the Legislature only make $7,200 a year in salary, their retirement benefits are tied to the salary of a state district judge, currently set at $125,000.

So a state legislator with 20 years of service can retire at age 50 with an annual pension of $57,500. That figure can be boosted by provisions that allow lawmakers to buy additional years, add military service and get credit for service in other state pension systems. But they don't have to tell taxpayers about any of it.

"If you're an elected official, that needs to be disclosed 100 percent,” said Capriglione, who has decided to opt out of the pension benefit for himself.  “The public has a right to know almost everything that we’re doing.”

The retirement generosity legislators have bestowed upon themselves was thrust into the public spotlight when Republican Gov. Rick Perry was running for president in late 2011. That’s when he revealed on federal disclosure forms that he was taking both his $150,000 salary and a $92,000 gross annual pension — a legal double dip.

That benefit is only available to elected officials, who are allowed to retire as state employees and still retain membership in the "elected class." Perry, without ever leaving his job, retired from the “employee class” in early 2011 and will be allowed to retire again, from the elected class, once he leaves office for good.

Bob Bullock, who spent most of his life in state government, revealed his intention to double dip before the Democrat became lieutenant governor in 1991. Perry had to disclose his pension under federal rules; the state forms don’t require it.

Two state lawmakers, Rep. Chris Turner, D-Grand Prairie, and Rep. Donna Howard, D-Austin, are pushing proposals that would require all state elected officials and high-ranking bureaucrats, like major agency heads and appointees, to disclose any state pension benefit when they submit financial disclosures to the Texas Ethics Commission. Turner has a separate bill to ban double dipping by elected officials.

Requiring current legislators to reveal pension income on their ethics disclosures would not allow public inspection of all "elected class" pensions. Over the years, the Legislature has extended the elected class benefit to nonelected officials, such as high-ranking officers of the House and Senate and legislative agencies. The Employees Retirement System could not say this week how many nonelected officials — current or former — are in the elected class or whether revealing how many fit into that category would run afoul of the secrecy guidelines.

The privacy protections kept the government watchdog group Texans for Public Justice from getting any information about the state pension income of former lawmakers who are now lobbying their colleagues on behalf of special interests. In 2011 the group submitted a list of the lawmaker-turned-lobbyists to ERS and the state comptroller's office and asked how much money they were being paid in pension benefits.

After being turned down, TPJ filed a lawsuit in Travis County late last year. Last week a judge ruled the state could not release the data because the Legislature had drawn the privacy provision so tightly. In recent years, lawmakers even took power away from the Texas attorney general to determine whether a request for information about pension records, no matter how minor, violates the privacy law.

"The taxpayers are chipping in a big chunk for these pensions, and they ought to be able to see where their money is spent," said Craig McDonald, director of the watchdog group. "What's outrageous is, not only did they shut it off by legislation, but they shut off any outside review. It's clearly in their interest not to get the public angry."

The effort to make the pension system more transparent has drawn opposition by various public sector employee advocates, some of them concerned that it will lead to calls for ending traditional pensions and replace them with "defined contribution" retirement benefits, such as a 401(k) plan. Others consider the release of their pension information an invasion of privacy.

Gary Anderson, director of the Texas Public Employees Association, said employees have come to expect that their pension income is "private information." Anderson pointed out that most of the retirement benefits that state employees receive comes from earnings from investments made by the ERS fund, and he said state retirees don't "spike" their pay or get automatic cost-of-living adjustments.

According to ERS figures, the average state retiree in the ERS is 68 years old and draws $18,800 a year after 22 years of service. By comparison, a Texas legislator with just eight years of service could retire at age 60 and make $23,000 a year.

Capriglione said he has been surprised at the objections to his efforts to open the pension system up to public scrutiny.

"I never thought I'd come here and say I want to make public records more public and have people battle me on that," Capriglione said. "I hope when we get these bills passed we find out why."

UT System Set to Bolster Disclosure Requirements

by Reeve Hamilton

Published on February 19, 2013

In an effort to prevent the perception of any conflicts of interest, the University of Texas System could soon subject its faculty and staff members to more robust public disclosure requirements than lawmakers and even university system regents.

On Jan. 15, UT System Chancellor Francisco Cigarroa issued a memo to the president of each of the system’s 15 institutions that laid out new system policies and included new model disclosure forms for all faculty, staff and administrators engaged in board and business activities outside their universities.

“Over the past several years, at public and private universities, the public trust has been tested when faculty do not completely disclose even perceived conflicts of interest,” Cigarroa told The Texas Tribune.

An online database that will make some information from the new forms available to the public is expected to be functional in May. The new forms should make significant strides toward curbing such perceptions, but they have also set some faculty members on edge. Some professors, who asked not to be identified, called the new approach “demeaning” and “chilling.”

It’s certainly more robust than what Texans get from their elected officials and gubernatorial appointees. But there are some hints of support for changing that.

"Transparency at all levels holds government more accountable to taxpayers," said Allison Castle, a spokeswoman for Gov. Rick Perry. "The governor is very pleased with the new level of transparency at the University of Texas System."

While lawmakers, regents and other government officials must currently file personal financial statements with the Texas Ethics Commission, the forms can be short on details. For example, for each board or executive position held by regents, their spouses or dependent children, they need only list the organization and their title.

Faculty members, under the new UT System policies, must describe their duties, the anticipated length of their service, the total hours per month worked and the range of their estimated compensation. The ranges are significantly more specific than any that appears on the Ethics Commission’s standard forms.

Viewing a lawmaker’s personal financial statement requires a specific request to the Ethics Commission, which will not be required with the UT System's new disclosure forms.

The new measures, as well as other aspects to the policies such as a requirement to secure approval before engaging in any outside activities like business activities, consulting or service on a board, have made some faculty members nervous.

“Obviously, some rules of these kind need to be in place,” said Alan Friedman, an English professor at the University of Texas at Austin and the past chairman of the university’s Faculty Council. “On the other hand, there are a lot of concerns that it’s potentially intrusive, excessive bureaucracy, time-consuming and being imposed on people to whom it really is not relevant.”

Murray Leaf, a professor at the University of Texas at Dallas and the chairman of the UT System’s Faculty Advisory Council, helped craft the new policy and accompanying forms. He said that in some cases, the faculty actually pushed for more specifics.

Of the ranges of compensation, he said, “We started with broader ranges, but people on the faculty advisory council wanted narrower ranges. And the reason was they didn't want to be suspected of earning a lot of money.”

Leaf said that professors were being told to err on the side of caution when it comes to determining whether to disclose potential conflicts. “But the problem is, some faculty hear that and err on the side of paranoia,” he said. “As a faculty member, you don't always know what might look like a conflict of interest or not.”

Under the system's new policy, the determination of conflicts is no longer made by the individual but rather by his or her supervisor based on the disclosure form. Leaf said people shouldn't worry.

“I'm trying to calm everything and advocate a saner view,” he said. “Take the view of the general public. If you are doing something that might generally look like a conflict, go ahead and declare it. Otherwise, go on about your business.”

In recent years, there were multiple cases in Texas higher education in which questions arose regarding potential conflicts of interest. Most notably was an incident at UT-Austin involving Charles "Chip" Groat, a former faculty member who, while still at the university, authored a study finding that hydraulic fracturing did not pollute groundwater. After it was realized that he directed and held stock in a company engaged in hydraulic fracturing, the university reviewed its ethics policies.

Some higher education leaders assert that although some professors may balk at these new policies, they are necessarily and increasingly becoming the norm.

“Faculty members never like to fill out forms, and I don’t blame them because there are too many coming across their desks,” said Jonathan Cole, a former provost at Columbia University. “But this is an important one. This is something which could have real implications for the reputation of both the individual and the university.”

Cole noted that, in the mid-20th century, scholars generally did not seek to profit off their own research or discoveries, but that begin to change in the 1980s when Congress allowed universities to retain more ownership of patents developed on their campuses with federal funding.

“Suddenly this norm of not receiving remuneration for your discoveries collapsed,” he said. “This is part of that evolution that has picked up speed since the 1980s, which is leading universities to reformulate their policies about conflicts of interest.”

Cole said the definitions and disclosures related to academic conflict of interest would continue to change with the times. He predicted that issues raised by new technologies, such as professors developing massive online courses that are offered outside — and in some cases, for-profit — companies “will be increasingly at the forefront of our consciousness.”

Lawmakers Slam Disclosure Bill — and Rebuke Freshman Who Filed It

by Elena Schneider

Published on February 28, 2013

Members of a powerful legislative committee on Wednesday rebuked freshman Rep. Giovanni Capriglione, R-Southlake, over a transparency bill he filed that would require legislators to disclose government contracts with businesses in which they or their family own at least a 50 percent stake.

Rep. Harvey Hilderbran, R-Kerrville, a member of the House State Affairs Committee, painted Capriglione’s House Bill 524 as a “vendetta” and called the legislator “sour grapes," accusing him of bringing politics — and in particular his successful effort to unseat former state Rep. Vicki Truitt — into his lawmaking.

“There’s a concern you’ve got bad motives,” Hilderbran said.

Rep. Patricia Harless, R-Spring, and Rep. Dan Huberty, R-Houston, spoke more directly about the legislation; she suggested that no one other than the legislator should be subject to such disclosure, while he argued it could put businesses at a competitive disadvantage.

Watchdogs said the hearing underscored the difficulty of floating tougher ethics laws in a Legislature that has traditionally resisted broad disclosure of their private affairs.

"It’s no surprise that Rep. Capriglione was greeted with hostility," said Craig McDonald, executive director for the liberal money-in-politics group Texans for Public Justice. "When you threaten the privileges and secrets of the club, you’re treated as a traitor."

Capriglione, who seemed unprepared for the line of questioning about Truitt, argued that he does not have bad motives, and added that the bill "was one of my campaign promises." He did not immediately respond to requests for comment.

But when Hilderbran used an iPad to pull up Capriglione’s attack website against Truitt, asking, "Are you proud of this?" and "You must be afraid that she's running again," Capriglione said he would try to take the website down.

Capriglione, who has made transparency a centerpiece of his early days in the Legislature, has a Senate sponsor for the bill — Sen. Wendy Davis, D-Fort Worth. Davis came under fire from her Republican opponent during her own re-election campaign for not disclosing her law firm’s public-sector clients. She has said the bill would require conflicts, or the perception of them, to be aired.

Huberty said at Wednesday's hearing that he worries the measure could inadvertently reveal a competitive business strategy.

Hypothetically speaking, he said, “You’re going to take my entire business model and [you are] going to show all my competitors my business model."

Harless said family shouldn't bear the burden of disclosure, adding that "if we’re looking just at the ethics of the person who’s running a race, then it just needs to be that person.”

In his closing statement, Capriglione said he would consider excluding siblings from the disclosure policy and limiting reporting amount to $10,000 or more. He said he thinks the Texas House already has far better ethics and trust than Congress — and that the disclosure bill would raise the state "to another level."

Charitable Donations, With Political Benefits

by Ross Ramsey

Published on March 4, 2013

It is legal during legislative sessions for state officeholders to raise money for their favorite charities from the same people who are prohibited from donating to their political campaigns in that same time period.

The charities are perfectly worthwhile — causes that range from heartwarming to life-changing. And prominent people lend their names to such causes all the time. There is, of course, nothing wrong with raising money for the charities, and no campaign laws are being broken.

But the juxtaposition is thorny.

During a legislative session, state officeholders are prohibited from raising money for their state political accounts — unless they are involved in an election.

The reasoning is simple. The authors of that particular law wanted to separate the donations of political supplicants from the deeds of political actors. They wanted to protect everybody involved in these transactions from even the appearance that money from contributors was connected to actions by lawmakers.

There were famous cases, like when the chicken magnate Lonnie “Bo” Pilgrim passed out campaign donations on the Texas Senate floor during a break in the debate on workers’ compensation laws, which were of interest to his business.

That was legal when he did it in 1989, but not anymore.

The campaign laws include an intentional loophole for lawmakers like Rep. Carol Alvarado, D-Houston, who was recently in a special election for an open Senate seat. Like the other candidates in that race, she was allowed to raise money for the campaign in spite of the Legislature’s calendar.

The candidates in the Senate District 6 race are not the only people dialing for dollars while lawmakers are in town. Monday is Gov. Rick Perry’s birthday, which will be marked by a dinner at the Governor’s Mansion benefiting Carry the Load, a group formed to honor military veterans. Suggested donations go as high as $100,000, which would get the donor “VIP seating” for eight and “priority seating” for another eight guests at the governor’s birthday dinner, along with a private tour of the restored mansion.

Last month, the Texas Senate Hispanic Research Council held a gala for the Luna scholars program, which gives students civic experience by allowing them to work as legislative staff members during the session. Diamond sponsorships for the gala at the downtown Austin Hilton went for $20,000 and individual tickets were $1,000; Lt. Gov. David Dewhurst gave the keynote address.

A similar group, the Texas Legislative Internship Program, has a fundraising gala in April at Austin’s Four Seasons Hotel, with the top sponsors donating $25,000. That one is affiliated with Texas Southern University, and the attraction is a roast of Rep. Sylvester Turner, D-Houston.

The legislative luncheon for the Governor’s Commission for Women — the first lady of Texas, Anita Perry, is the headliner — is on the March calendar. The top-level sponsorship to that one is $10,000, with the money going to the commission’s work.

Worthy causes, across the board. It is hard to fault the officeholders for using their prominence to raise money for such programs, the donors for contributing or the charities for accepting the money.

It is not as hard to wince at the timing of the events.

Ethics laws and practices have a lot to do with intent and with appearances. Leave intent to the lawyers, but appearances belong to politics.

The political fundraising prohibition is aimed at the appearance that lawmakers are taking money from donors while casting votes that benefit those donors.

So if donors cannot show their love for officeholders by giving money directly, indirect giving becomes the next best thing. A donor at a charity event sponsored by a politician for purely charitable purposes appears to be doing the same thing as a donor who is there purely to curry favor with the politician at the head table.

An officeholder raising money for a good cause looks the same as a lawmaker using a powerful position to make donors do something they might not otherwise do. So long as they are willing to believe in the pure motives of everyone involved, voters needn’t worry about influence peddling.

But it is awkward. As House Speaker Joe Straus said last week at a charitable dinner honoring him and benefiting the Annette Strauss Institute: “People say the nicest things about you when the budget’s being written.”

Freshman Lawmaker Gets a Lesson in Pack Behavior

by Ross Ramsey

Published on March 11, 2013

Only the brave and the foolish go against the legislative pack — even when they are on the side of the angels.

State Rep. Giovanni Capriglione, R-Southlake, in his first appearance before a legislative committee, got a full hazing as the author of an ethics bill that apparently sounds better to the people who don’t have to comply than to the officeholders it would regulate.

Capriglione, a freshman, came to Austin with what seems like an idea born in a high school civics class: Write a piece of legislation that addresses something of concern to the voters who elected you. His bill would require lawmakers to report any business relationships between their close relatives and any government entity — to show whether and how they and theirs might benefit personally from the officeholders’ official work.

You would think he had tried to outlaw pecan pie, pistols or pickups.

The legislation wouldn’t prohibit anything. It would increase officeholders’ disclosure requirements. Capriglione said it would get rid of some of the trust issues that politicians face. And he made the rookie mistake of saying he was inspired by the low opinions of federal lawmakers.

“If you are trying to address the lack of trust in Washington, why are you bringing a state bill?” asked state Rep. Patricia Harless, R-Spring, a member of the House State Affairs Committee. “Do you think we’re unethical as members of the House?”

“No, but we have to set the bar higher and higher,” he answered.

“Do you think campaigns are ethical?” she asked. “Do you think this bill is more about things that happened in your political campaign, or good public policy? I see this being translated as a campaign vendetta brought to the Legislature.” She said lots of members have tough campaigns but leave that behind when they get to Austin.

“These are things that have been brought to me by inside of my district,” he said. “People understand that we have to have jobs. We have to go and we have to work. Sometimes those contracts have to be with local governments, municipalities. We should disclose those jobs, those opportunities, ahead of time.”

That wasn’t a popular point of view. And it was evident from the committee members’ questions that they’re irritated about the amount of disclosure already in place. One, state Rep. Dan Huberty, R-Houston, said that he disclosed his own tax returns during “a nasty campaign” and noted that they were still on his website. Capriglione said, when asked, that he didn’t think that should be required.

But government contracts held by lawmakers’ close relatives, he said, should be.

Forgive the freshman who knows not what toes he has squashed. It can be confusing to someone who has not been a member of the club. And he got to Austin by taking out a member of the club.

In 2010, Capriglione ran for office, one of three Republican challengers to state Rep. Vicki Truitt, also a Republican. She won, but he learned. He ran again in 2012, defeated her and came to Austin. So did she, by the way, reincarnated as a lobbyist.

One of the campaign issues was a business contract between Truitt’s husband and the Tarrant County Hospital District. In Capriglione’s version — the version that got shouted to voters — the juxtaposition of Truitt’s official position and her husband’s business with a taxpayer-supported hospital district was suspect. In her version, there was no link and nothing to worry about, in part because the hospital district gig started before she was elected.

Voters, for their various reasons, chose the new guy.

Now, his new House peers are blaming that race for his bill, suggesting it is meant to be insurance against a rematch with Truitt.

They could be right. This is politics, and these are the experts. They know their own kind. They can see how things are done. It might be that disclosing ties between people in government and people who make their living doing business with government would be damaging to some people in political races.

The only way to test that theory is to tell voters what is going on — whether their candidates and candidates’ close relatives do business with governments over which they have influence.

See whether the voters mind.

Transparency Bills Draw Strange Bedfellows

by Emily Ramshaw

Published on March 26, 2013

In Texas, there’s nary an issue that aligns the far left with the far right. But this session’s effort to make state government more transparent and ethical — spearheaded by some of the Legislature’s most conservative members and its most liberal ones — has attracted the strangest of bedfellows.

You’ve got ultra-conservative Rep. Giovanni Capriglione, R-Southlake, partnering with outspoken Democratic Sen. Wendy Davis, D-Fort Worth, on efforts to force lawmakers to report the government contracts they or their family members have.

Liberal Rep. Lon Burnam, D-Fort Worth, is cosponsoring legislation with Tea Party-approved Reps. Lyle Larson, R-San Antonio, and Rick Miller, R-Sugar Land, to get elected officials who run for higher office — i.e., Gov. Rick Perry — to reimburse the state for expenses for their security detail.

And Michael Quinn Sullivan’s influential Empower Texans has been making robocalls into the districts of Republican legislators who the conservative activist sees as standing in the way of efforts to expand reporting on lawmakers’ personal financial disclosure forms.

A glance down the list of the roughly three dozen ethics bills filed this session shows several authored by so-called establishment Republicans; most were filed by Democrats and recently arrived social conservatives, often partnering together.

Sullivan acknowledged it’s rare for him to be on the same side of any issue with Democrats. One of the only other places it happens is in criminal justice reform, he said, where the two sides get to the same end result via very different paths — social justice for liberals, versus dollars and cents for conservatives.

But unlike criminal justice reform, he said, with ethics reform, the motives are largely the same. “Whether you’re on the far left or the far right ideologically, it’s all coming from the same place,” he said. “You’re for the same goal, which is to make sure the voters have the maximum amount of information.”

Jim Henson, director of the University of Texas at Austin’s Texas Politics Project, said government accountability falls into the “weird Venn diagram of common space that you don’t get very much” in the state Legislature. But he’s not so sure the parties share the exact same motives.

Conservatives approach transparency issues because they believe systemic corruption adheres to government, he said, while liberals approach it because they want to make sure that something necessary for a fair society functions properly.

“There’s more of an inherent suspicion on the side of conservatives, and I think they’d agree with that, than you see from the Democratic side, which has more faith in the ability of government to proactively do good things,” Henson said.

But Henson added that regardless of motive, “when you have a rare moment of agreement between those sides, it’s good that people try to make the most of it.”

Capriglione, a freshman who was lambasted by veteran Republicans in the first hearing for his government contracts bill, HB 524, said he didn’t go out seeking Democrats to partner with. It just happened naturally.

Texas Democrats, who are the minority at the state level, and Texas Republicans, who are the minority at the federal level, each want to keep the other side honest, he said. They also look internally, he added, and they know if they don’t practice what they preach, they’ll be labeled “hypocrites.”

“When you look at school finance, at private property rights, it’s easy to get to a partisan answer,” he said. “Transparency is one of those few items where it doesn’t matter what party you’re in. Even if you’re partisan, you’re worried about the other party’s power, and what they’ll do with that power.”

Judicial Donations Raise Questions of Partiality

by Maurice Chammah

Published on March 26, 2013

Tom Phillips, a former chief justice on the Texas Supreme Court, has a strong opinion of the state’s judicial elections. “Of the ways you can elect judges,” he said, “Texas has one of the worst systems.”

In 1988, when he ran for the state’s highest court, he voluntarily capped individual donations to his campaign at $5,000. Today, his law firm — which regularly represents clients before the state Supreme Court — routinely donates tens of thousands of dollars to the campaigns of the justices who preside over those cases.

Texas is one of 22 states with judicial elections, which often involve large donations from law firms, special interests and individuals who might have a stake in particular court cases.

It’s an arrangement that raises questions about impartiality, and has long prompted calls for change from lawyers, lawmakers and even judges themselves. The latest came last month, when state Rep. Richard Peña Raymond, a Laredo attorney, filed House Bill 129 to require judges to recuse themselves in cases where they have received $2,500 or more from a party or law firm arguing before them.

“The public wants to hold the judiciary in higher esteem than other parts of government," he said.

Several former Texas Supreme Court justices agree the system is in need of reform, but say they have never let campaign contributions affect their rulings.

Others argue that law firms often have more insight than the general public into who is best qualified to serve, so it makes sense for them to donate to judicial campaigns.

“The one group of people who knows who’s qualified is lawyers.,” said Justice Debra Lehrmann, who has been on the court since 2010. “People who are not qualified cannot raise the money it takes.”

Defenders of elections for judges say the alternative — having elected officials appoint judges — would be worse because it would put the process behind closed doors.

“Voters insist they want the right to elect their judges,” said Supreme Court Justice Don Willett, who has served since 2005. “Ask them to name one, and they'll likely come up blank. But they want a voice, even as they say that judicial fundraising raises appearance concerns.”

A case that illustrates those concerns is one that former Chief Justice Phillips, now an Austin-based attorney for the law firm Baker Botts, helped argue before his former colleagues.

In 2001, 71-year-old Leonel Garza died of a heart attack after taking the anti-inflammatory drug Vioxx for 25 days. His family sued the drug manufacturer Merck & Co. in what was one of numerous wrongful death lawsuits filed around the country. A district court and a San Antonio appeals court agreed with the family, awarding them nearly $7.75 million in damages.

Merck — which was represented by Baker Botts — appealed to the state Supreme Court, arguing that Garza had a history of heart problems and that there was no proof that the company’s drug caused the heart attack. In August 2011, the court sided with the company.

In the 10 years preceding the decision, justices who sided with Merck in the 7-0 vote received at least $85,000 combined in campaign contributions from the Baker Botts political action committee. Justice Nathan Hecht, who wrote the court’s opinion in the case, received $20,000. Chief Justice Wallace Jefferson received $12,750.

Andrew Baker, a managing partner at Baker Botts, said the firm is “confident that the court resolves all of its cases on its conclusions about the law and the facts, and not on any improper bases.”

As long as the state requires judges to compete in partisan elections, he said, "our partners who voluntarily contribute to our political action committee understand that judicial candidates need sufficient campaign funds to inform the voters about who they are and why they should serve."

Ethics experts who have studied judicial contributions say they are less worried that companies and law firms are pressuring judges to vote a particular way in specific cases. Their bigger concern is that the current system gives a leg up to candidates who might have an ideological bias against plaintiffs.

“I try to draw a distinction between buying a vote and buying a judge with a particular viewpoint,” said Billy Corriher, a legal analyst with the left-leaning Center for American Progress who authored a report last year on campaign contributions in judicial elections.

In the years after the Texas Constitution of 1876 established judicial elections instead of appointments, elections were “conducted quietly and were rarely contested or remarkable,” Seana Willing, executive director of the State Commission on Judicial Conduct, wrote in a 2010 article in the South Texas Law Review.

That changed under the tenure of Bill Clements, the first Republican Texas governor in more than a century, who appointed members of his own party to fill vacant seats on the court throughout the 1980s. Plaintiffs’ attorneys had to spend large sums of money to re-elect Democrats.

In 1987, 60 Minutes ran a special on the Texas Supreme Court called “Justice for Sale,” which focused on the court’s dismissal of an appeal by Texaco in the company’s losing contract case against Pennzoil. According to a report in Time, Pennzoil’s attorney and his firm contributed a combined $248,000 to members of the court for their campaigns between 1980 and 1987, while Texaco’s attorney and his firm donated a combined $190,000.

In the 1994 Democratic primary between Rene Haas and Raul Gonzalez, the two candidates together spent nearly $4.5 million campaigning. The following year, the Texas Legislature responded by passing the Judicial Campaign Fairness Act, which limited contributions to justices to $5,000 for individuals and $30,000 for law firms.

That measure may have curbed spending, but researchers found it didn't curb influence. Madhavi McCall, a political science professor at San Diego State University, conducted a study of the relationship between judicial decisions and campaign contributions in 530 Texas Supreme Court cases between January 1994 and June 1997. “In every instance,” she said, “the probability of a party garnering votes increases if the party contributed to a given justice’s campaign.”

Questions around judicial elections have surfaced at the national level, not just in Texas. In 2009, the U.S. Supreme Court ruled in favor of Hugh Caperton, a mining company president who argued that his 3-2 loss to A.T. Massey Coal Company before the West Virginia Supreme Court was unfair because Massey's chief executive had spent $3 million to elect a sympathetic justice to the court. Since that ruling, reform advocates have worried that the focus on such an extreme case will mean more subtle forms of influence won't get the proper attention.

Defenders of the elective system say that the alternative — a system of nominations like the one used for the U.S. Supreme Court — is far more prone to partisan influence. Michael DeBow, a professor at the Cumberland School of Law at Samford University in Alabama who has studied the merits of various systems for selecting judges, said the same law firms that currently donate would continue to dominate the selection process in a secretive game of “inside baseball.”

“My gut feeling is, better the devil you know,” DeBow said.

Scott Brister, who served on the state's high court from 2003 to 2009, said allowing judicial candidates to affiliate with political parties gives voters at least some sense of whom they’re voting for. But others say it steers the candidates dangerously close to telling voters — and law firms with money to spend — how they would rule once elected.

State Sen. Dan Patrick, R-Houston, has filed Senate Bill 103, which would bar voters from automatically voting for judges affiliated with a party through “straight ticket” voting, requiring them to instead mark each judicial candidate separately. State Sen. Robert Duncan, R-Lubbock, has filed Senate Joint Resolution 34, which would preserve partisan judicial elections, but subject each elected judge to a nonpartisan “retention election,” meaning a simple yes or no vote by the public on whether they should remain in office.

“Every suggested reform has strengths and weaknesses, and I confess that I haven’t cracked the code on the perfect replacement,” Willett said. “But I’ve endured firsthand the myriad drawbacks to our current system, and they are plentiful.”

For Strama, Education Interests Hit Close to Home

by Morgan Smith

Published on March 28, 2013

State Rep. Mark Strama was not the lone dissenter in the Texas House during Tuesday’s almost 10-hour debate on House Bill 5. But the Austin Democrat did prove to be the bill’s most tenacious critic.

After offering eight amendments for consideration, he cast one of only two no votes against the comprehensive education legislation, which includes a provision aimed at allowing high school students the opportunity to pursue career training by reducing the number of math and science courses they must pass to graduate.

Strama detailed his objections to the bill — which focused on the threat that reducing the number of advanced courses high school students must complete to graduate posed to their ability to succeed in higher education and the workforce — in several speeches on the House floor and in a lengthy entry on his blog the next day.

What he did not mention is that whether students enroll in challenging courses and the number of state exams they must take could affect his livelihood. The lawmaker owns four Austin-area Sylvan Learning centers, a national franchise that offers test preparation and tutoring services. His wife, Crystal Cotti, serves as their executive director.

In an interview during a break in the debate Tuesday, Strama said he was rarely asked whether his business posed a conflict of interest with his work as a legislator.

“There are people on the floor who make a living from the insurance industry, there are some who make it from practicing law, there are some who make it in payday lending, there are some who make it in gambling,” he said, “I make my living helping kids get better in school.”

Indeed, Strama joins a number of Texas lawmakers who have advocated for a policy changes closely connected to their professional interests. The practice can be difficult to avoid — and it’s one that the Texas Constitution does not prohibit — in a part-time Legislature where members receive meager state stipends to do a job that often consumes more than just the five months every other year they spend in Austin.

Strama’s example “highlights some of the glaring holes” in the state’s ethics regulations, said Craig McDonald, the director of the liberal watchdog group Texans for Public Justice.

When they take votes related to their professional lives, legislators can provide insight into the practical effects of policy, he said — but along with that expertise comes potential conflicts. And the state’s weak disclosure laws, which require elected officials to report their sources of income only within broad ranges in personal financial statements, he said, do not do much to ward off those concerns.

“Those conflicts disclosed in the back of some form that the public never looks at do not disappear and lawmakers have to face them day in and day out during the legislative process,” said McDonald.

Strama said his position on the education bill was “absolutely” informed by his experience in the field —  he also described what he learned from the family tutoring business in a June op-ed in the Austin American-Statesman — but he added that he had not considered how it could affect on his pocketbook.

“HB 5 might be great for my business because there will be less pressure on schools to offer free resources within the school environment for kids,” he said. “I don't know which way it cuts.”

HB 5 is widely supported by many educators, industry and trade groups who say it provides needed flexibility that will keep students engaged in their education and help fill gaps in the workforce. But the measure also drew fierce opposition from state education officials and other business organizations including the Texas Association of Business and the Austin Chamber of Commerce.

Among the changes to the legislation Strama proposed Tuesday was an amendment that focused on increasing the likelihood that students would complete the advanced courses they would need to be prepared for college. Instead of opting into a “distinguished plan” that would add the fourth years of math and science that education researchers have linked to college success, he argued in favor of automatically placing all students on that track when they entered high school.

As he introduced the amendment, which counted House Higher Education Committee Chairman Dan Branch, R-Dallas, among its supporters, Strama cited the gains African-American and Hispanic students have made under the state’s current plan that requires four years of courses in math, science, English, and social studies.

“When we assume every child in the system is capable of college prep work, far more students rise to that challenge,” he said.

In a letter circulated to lawmakers before the House took up the legislation, La Raza and Education Trust, two national advocacy groups, echoed Strama’s criticism. Though several of Strama's colleagues rose to argue in favor of his amendment, it ended up failing 50 to 97.

Strama announced in February that he would not seek re-election to the House and is mulling a run for Austin mayor. He said growing up in a politically involved family has taught him to be at ease navigating conflicting relationships.

His uncle Dick Trabulsi is the president of Texans for Lawsuit Reform, a powerful player at the Capitol, and his brother Keith Strama is a lobbyist whose clients include ExxonMobil.

The representative said he had often found himself voting against their interests in policy matters.

“I've just had to live with those relationships all my life and I'm pretty comfortable making my own decisions about what is best for the state of Texas independent of those interests,” he said. “And I really have no idea how this legislation helps or hurts my business, but it could help it, and I'm going to vote against it.”

For Texas Politicians, Energy Dollars Plentiful

by Kate Galbraith

Published on April 12, 2013

During a legislative hearing this year related to hydraulic fracturing, state Rep. Jim Keffer, R-Eastland, made a reference to what he thought was an unfair portrayal of the industry in the film Promised Land.

“My wife’s seen it, she didn’t like it, so don’t go if you haven’t,” Keffer said at the hearing, which featured testimony from oil and gas representatives.

Friendliness toward the drilling industry is typical for Texas, where many lawmakers receive campaign contributions from oil and gas groups or have investments in drilling companies. The three elected members of the Railroad Commission, which oversees the oil and gas industry, have received significant contributions from the very industry they regulate.

Critics say that the industry exerts excessive control over elected officials, especially in boom times. But lawmakers and the drilling industry say that the donations are the way things operate. And lawmakers say that they make their decisions based on the best interests of the state.

Keffer, who heads the House Energy Resources Committee, holds an interest in the Emerald Royalty Fund, which specializes in mineral rights. His broad stock portfolio includes shares in more than a dozen oil and gas companies, according to a 2011 filing with the Texas Ethics Commission. He received nearly $73,000 in the 2011-12 election cycle from the industry, according to the left-leaning nonprofit group Texans for Public Justice.

Keffer said outside groups watch lawmakers’ actions, and “if I start looking like I’m just an oil-and-gas guy, then my credibility is destroyed here in the Legislature.”

The energy, natural resources and waste sector gives more money to Texas candidates than any other economic sector does, according to Texans for Public Justice. The group identified nearly $20 million in donations from groups and people with oil and gas connections to state legislators and other elected officials during the 2011-12 campaign cycle. (Alternative energy’s donations were negligible, the group said.)

Political contributions and personal involvement are hardly unique to the drilling industry, supporters say. “Individuals’ areas of expertise are a valuable asset to the people of Texas,” Deb Hastings, executive vice president of the Texas Oil and Gas Association, said in an email.

Charles Stenholm, a senior policy adviser for OFW Law in Washington and a former congressman from Texas’ 17th district, noted that he had been a farmer while serving on the U.S. House Committee on Agriculture.

Stricter rules, he said, could “mean that no one in the energy business could serve in the U.S. Congress, and that would not be constitutional to start with and it would not be helpful.”

But environmentalists feel outgunned.

Many state policies, on issues like air and water pollution, “are inexorably or inextricably woven to benefit the oil and gas industry,” said Tom "Smitty" Smith, the Texas state director of the consumer advocacy group Public Citizen. Environmentalists often resort to trying to mitigate bad policies.

Smith did praise Keffer for pushing through a bill last session that required disclosure of many of the chemicals involved in hydraulic fracturing.

The House Energy Resources Committee’s members include state Rep. Tom Craddick, R-Midland, a business development representative for an oil field supply company; state Rep. Myra Crownover, R-Denton, the committee’s vice chairwoman, who receives industry royalties; and state Rep. Tony Dale, R-Cedar Park, who is the president of an oil and energy consulting firm.

Oil and gas accounted for more than 8 percent of the state’s gross domestic product in 2011, according to the Federal Reserve Bank of Dallas, so it is not surprising that many lawmakers are in the industry. It is also nothing new. Many former governors, including George W. Bush, have been oilmen.

Rob Looney, treasurer of the Texas Oil and Gas Political Action Committee, wrote in an email that "a review of voting history would show that elected officials who have received support from Texas Oil and Gas PAC do not always agree with the industry’s positions."

There have been efforts afoot in the Legislature to tighten the rules on industry donations to Railroad Commissioners, but the commissioners say that such rules would be stricter than those for other elected state officials.

The commissioners are not categorically banned from making personal oil and gas investments or receiving royalties. But provisions in state code and special rules promulgated by the commission are aimed at preventing improprieties, according commission spokeswoman Gaye McElwain.

Exotic Trips, Luxury Gifts Are Perks of Office

by Emily Ramshaw

Published on July 3, 2013

Many Texas lawmakers are quick to name the sacrifices they make to serve: the meager state pay, the grueling hours, the time spent away from their families and their day jobs.

But in reality, life in the Legislature is not half bad. The perks associated with the job — exotic trips, hotel upgrades and campaign cash spent on luxury gifts — can dramatically augment lawmakers’ lifestyles.

Take state Sen. Troy Fraser, R-Horseshoe Bay, a 16-year veteran of the upper chamber who previously served in the House. In the last three years, Fraser, the Senate Natural Resources Committee chairman, spent more than $300,000 from his campaign account maintaining his personal airplane, at least $33,000 on country club fees and dues and more than $4,000 on suits, on top of thousands of dollars on upscale hotels for conferences and events everywhere from Hawaii to Buenos Aires, according to his campaign finance reports.

Between 2008 and 2010, he claimed more travel per diems — 361, valued at more than $58,000 — than any other member of the Senate.

And in the last several years, taxpayers paid for him to attend at least nine policy conferences in destinations like Puerto Rico and Santa Fe, N.M. In some instances, Fraser flew his own plane, receiving mileage reimbursements at up to triple the price of a commercial ticket.

Fraser said all his campaign expenses and Senate reimbursements are related to his role as a legislator and, in particular, his expanded duties as the chairman of a major committee.

The airplane costs, which he said he incurs flying across the state for official business, “do not cover 100 percent” of his bill. He justified the country club membership by saying he makes it “available to all members of the Legislature and all lobbyists” for a “standard once-a-week outing” that sometimes includes constituents. And the clothing he purchased was purely for use during the legislative session, he said, adding that he rarely wears suits unless he's in the Capitol. In 2011, he reimbursed his campaign for the suits after an ethics watchdog filed a complaint against him. Fraser said he still disagrees with the decision.

Fraser said that in recent years he had moved away from requesting state reimbursement for out-of-state travel, choosing to finance it through his campaign instead. He said the per diems are a reflection of his retirement from the private sector; unlike many of his colleagues, the well-to-do lawmaker said, the Legislature is now his day job.

“I’m one of the few who almost overreports,” Fraser said, adding that every state expense is approved by the Senate and every campaign expenditure meticulously disclosed. “My constituents and my supporters understand very clearly what I’m doing with money.”

Fraser is far from the only lawmaker to reap such on-the-job benefits. His colleagues use campaign cash to drive Mercedes and BMWs, and trade thousand-dollar gifts from Neiman Marcus, Tiffany & Co., Montblanc and Four Seasons spas. Some of them rent high-dollar condos in Austin — decorated with furniture from Williams-Sonoma and Crate & Barrel — and buy tens of thousands of dollars’ worth of sports tickets. And they take taxpayer-funded trips to conferences in far-flung destinations like Vancouver, Cuba and Alaska.

Critics say such spending — which is allowed under the state’s ethics and campaign finance rules as long as it's directly tied to state or legislative business — blurs the line between what's permissible and what's ethical. At best, they argue, it rips off wealthy campaign donors; at worst, hard-working Texas taxpayers.

“They have the audacity to act as though they’re underpaid,” said Dave Palmer, a California-based campaign finance watchdog who filed so many complaints with the Texas Ethics Commission — on legislators using their campaign cash for everything from personal fitness equipment to dry cleaning — that lawmakers passed legislation limiting such complaints to Texans. “They’re enriching themselves by having their living expenses paid for ad infinitum.”

Rita Kirk, director of Southern Methodist University’s Maguire Ethics Center, said the root of this behavior is Texas’ part-time Legislature, where “the only people who really can get there are people who are wealthy enough to self-finance or have wealthy people invest in them.” She said it establishes an “elitist government style” where proper stewardship of taxpayer or donor dollars can at times be compromised.

“If you’re getting a special privilege because you hold the public trust,” she said, “my argument would be you should think clearly about whether or not to accept it.”

Lawmakers justify charging the state or their campaign contributors for conferences in exotic locales if it qualifies as official business — they're out, they say, doing the state’s bidding.

Between 2007 and 2011, legislative travel records show, former state Sen. Jeff Wentworth, R-San Antonio, charged the state for 17 conference trips, more than any of his Senate colleagues — including one to El Conquistador, a resort in Puerto Rico. Sen. Rodney Ellis, D-Houston, had at least nine, records show, including one stay at the Golden Nugget hotel and casino in Las Vegas. And former state Rep. Warren Chisum, R-Pampa, billed the state nearly $4,000 for an energy meeting in Saskatoon, Canada, and more than $2,700 for a meeting at the historic Broadmoor resort in Colorado Springs.

The airfare can be eye-popping, and even taxpayer-financed flights to common destinations like Washington, D.C., or Chicago often exceed $700. Some lawmakers fly their own planes to domestic conferences or meetings across Texas, enjoying a mileage reimbursement rate that is more than twice the price of driving, and almost always exceeds commercial rates.

Some of these conference trips turn into de facto vacations, with lawmakers paying out of their own pockets to tack on extra days, bring along their families and enjoy spa treatments, rounds of golf, bars and casinos.

State Sen. John Carona, R-Dallas, who was first elected to the Legislature in 1990, said that as a “matter of personal policy,” he has never attended conferences on legislative business, largely because he thinks taxpayers should not be footing the bill. Nor does Carona, a wealthy businessman who travels frequently for work, generally accept travel per diems when the Legislature is not in session, to “avoid any appearance of impropriety.”

But he has sought thousands of dollars’ worth of mileage reimbursements from the state and fuel and maintenance expenses from his campaign for traveling on his company plane, which he says he does for convenience and efficiency. He has also used his campaign account to purchase upscale gifts for his colleagues from the luxury retailers Bachendorf’s and Salvatore Ferragamo, and to buy a longtime employee a $6,000 retirement present from Eiseman Jewels.

Such gifts are common; lawmakers routinely give each other presents to celebrate a new baby or the wedding of a colleague’s child, congratulate a legislator for carrying a hefty bill or honor them for chairing a key committee.

In 2009, state Sen. Bob Deuell, R-Greenville, and other members of the Senate State Affairs Committee bought Chairman Robert Duncan, R-Lubbock, a $1,380 guitar. Several years earlier, then-Sen. Chris Harris, R-Arlington, helped purchase a $2,500 gift certificate from a Chicago clothier for Ellis.

The most notorious of such gifts dates back to the 1990s, when Kevin Bailey, then a Democratic representative from Houston, was arrested and accused of threatening his girlfriend with a gun. He was cleared of any charges, but the gun, a .22-caliber Derringer, lived on in infamy: it had been given to him by the chairman of the House Public Safety Committee as a thank you for Bailey’s help passing the state’s concealed handgun law.

Carona said legislators have “no business” complaining about their state stipends or working conditions.

“Each and every one of us made the choice to run for the office, and few are eager to give up the post,” he said. “The compensation and perks are more than sufficient for most citizen legislators here in Texas.”

Lawmakers in No Rush to Regulate Themselves

by Ross Ramsey

Published on April 15, 2013

Maybe lawmakers should write a legislative ethics bill that would not take effect for 50 years.

That would remove their instincts for self-preservation, and the fear that they are passing judgment — with the voters watching — on their own transgressions and those of their colleagues.

Asking an active politician to write rules for how to behave in elections and in office is like asking professional athletes to outlaw the drugs, supplements, transfusions and whatnot that make them more successful competitors. Meanwhile, the reputations of honest players come into question whenever their less-trustworthy colleagues break the rules. Or when they operate in ways that are legal but unethical.

They know better. They know what has made them successful. They know what they can get away with. And they know what the public cares about and what it ignores.

Steroids are now a big deal, but before we sounded the alarms we all wanted to see the home run records broken. Doping is serious, too, but most of the public ignored it to watch a fellow Texan win a record number of bike races.

Politics has its own performance-enhancing practices. It is hard to tell the straight players from those who cut corners or turn their public positions into personally profitable ones.

The idea of ethics laws is that lawmakers’ behavior ought to be transparent and observable at a time when that information is useful.

Big changes are not required, however, to satisfy voters, who generally support reform but do not generally demand it. Except in the face of highly publicized scandals or political hazards, lawmakers don’t usually tighten regulations on their own activities.

They will have to talk about it before the session ends. The Texas Ethics Commission is up for review under the state’s sunset law, which requires lawmakers to reauthorize state agencies every few years. It’s a chance to revise the agency’s rules, fiddle with its makeup, remake it, empower it or disembowel it.

The must-pass legislation has not yet been debated in the full House or Senate, though it will be up for discussion this week. Some suggestions made earlier in the game didn’t make it into the legislation, and some of those suggestions will be back when the debates take place. For instance:

Gov. Rick Perry, the state’s busiest retiree, wasn’t known that way until he ran for president and revealed that he was legally collecting his state salary and his state retirement at the same time. He played by the rules, because state law doesn’t require the disclosure, and you would have to have a head full of rocks to volunteer that sort of information to voters. That will come up again during the debates ahead.

The Sunset Advisory Commission, a panel of lawmakers and citizens, recommends changes to the Legislature. That panel spiked both a modernization of the personal financial disclosures filed by lawmakers and online access to those filings.

Financial disclosures are not exact, but fall in ranges. But the ranges have never been updated; all you can learn about an asset worth more than $25,000 is that it is worth more than $25,000.

Online posting is allowed by anyone outside the government — The Texas Tribune put all of the financial disclosure documents online — but not by the ethics agency itself. That will probably come up again.

Lawmakers complain about being spatchcocked for trivial mistakes — arguing that the words “ethics investigation” can be louder than the words that follow, whether those are “for filing late” or “for stealing $1 million.” They have a point, and that might change with a new sorting procedure that tries to keep violations in perspective.

But the proposed legislation does not include the independent investigations office that other regulatory agencies have. Instead, complaints both large and small would continue to go to the full eight-member ethics commission. There are no audits to compare campaign reports with bank accounts.

“This is an opportunity to make changes, and they’re taking baby steps,” said Craig McDonald of Texans for Public Justice, a liberal advocacy group for disclosure in officeholder and campaign activities.

Maybe it would be easier if they were regulating someone else.

Legislators Dip Into Campaign Accounts to Boost Their Staff's Pay

by Brandi Grissom

Published on April 18, 2013

Texas taxpayers pay the salaries of the legislative staffers who work for Sen. Kirk Watson, D-Austin. Since 2006, Watson has added to those salaries with some $440,000 from his campaign contributors.

“I want to attract and retain high-quality people,” Watson said. “It also allows me to hire additional staff.”

Lawmakers in both the House and Senate spend thousands of dollars each year from their campaign accounts to supplement the salaries of staff members who work in their district and Capitol offices. It’s a legal and long-standing practice in the Texas Legislature that lawmakers say is the only way they can provide competitive salaries and hire enough staff to do the work required to represent their constituents. But some ethics experts say the salary supplements present the potential for undue influence from special interests — or at least the appearance of it — on staff members and the lawmakers whose paychecks depend on their largess.

“It’s just another way in which the lobby runs the Capitol,” said Cal Jillson, political science professor at Southern Methodist University. “They provide the lawmakers with walking around money and staff support.”

Each legislative session, the House and Senate decide how much money legislators will be allotted to run their offices — to pay for staff and travel around the massive state — from the state’s two-year budget. At the beginning of the current legislative session, senators allotted themselves $38,000 per month, a raise from the $35,600 they previously received. House members, whose districts are smaller, decided they would do with just $13,250 each month, still a bump up from the $11,925 monthly allotment in the previous two-year cycle.

How the legislators divvy up those funds to run their offices is left to them. But that’s all the money they receive to pay for lawyers, policy advisers, communications staff and administrators who help them draft legislation, prepare press releases, conduct and attend meetings in Texas and across the country, and deal with thousands of constituents and lobbyists who bring their myriad concerns to the lawmakers’ offices.

“They can manage that how they want,” said Patsy Spaw, secretary of the Senate.

How senators use their funds varies widely, Spaw said. For instance, the range of salaries for a chief of staff in that chamber starts at $4,416 per month and tops out at $10,417 monthly.

Watson said the amount senators get from the state is hardly enough to provide effective service for the more than 800,000 Texans each of the 31 senators represent. If he were to rely only on the money he gets from the state, Watson said, he would be forced to hire fewer people and pay them a pittance.

“They want to serve. They obviously have a heart of service,” Watson said of his staff. “They could be establishing private sector careers that might be paying them more money.”

There’s no question there might be less fraught ways to pay legislative staff that wouldn’t raise questions about the influence of lobbyists and other campaign donors, Watson said. But for him, it comes down to a choice between providing fewer services for his constituents and dipping into his campaign funds to do a better job for the people he represents.

While he understands the concerns some might have about conflicts of interest, Watson said that’s not a problem in his office.

“The concern is not a true concern in my office, but it’s a legitimate consideration and one that the senator, in this case, finds himself having to balance,” Watson said.

State Sen. Judith Zaffirini, D-Laredo, said that although it is difficult to stretch the small amount of dollars she receives from the state, she does not supplement her staff’s salaries with campaign money. She prefers, she said, to keep campaign and state office expenditures separated. She asks staff members for a commitment to work two sessions. And she maintains low expenses, she said, by traveling as cheaply as possible within a sprawling district that stretches from Laredo to Austin. Often, she said, her staff members travel by bus, because it’s the least expensive option.

“We try to find ways to do things more efficiently,” she said, adding, “I pay the best salary I can, but only within my budget.”

State Rep. Charlie Geren, R-Fort Worth, said lawmakers in the lower chamber not only compete with the private sector when it comes to staff pay. They also compete with the Senate. That’s one of the reasons, he said, that the chamber decided to increase the representatives’ office operations allowance this year.

“A lot of us supplement the salaries of our staff in order to keep them,” Geren said.

Geren, a longtime legislator and chairman of the House Administration Committee, called the notion that paying Capitol staff from campaign accounts could present ethical conflicts “silly.”

“The money that’s in my campaign account, I disclose where it came from, I disclose how I spend it,” he said, adding that payroll is an allowed campaign expenditure.

Jillson said the problem with paying legislative staff with campaign money is not that it could unduly influence lawmakers’ aides. It’s the potential impact those dollars have on the lawmakers themselves. Lawmakers are paid a miniscule salary of $7,200 per year from the state, which means many of them rely heavily on their campaign accounts to pay for their living expenses — sometimes extravagant ones. And because they are provided an insufficient amount of state dollars to run their offices, they feel forced to dip deeper into those campaign funds to do the basic job they were hired to accomplish, making them even more reliant on the lobbyists and special interests who contribute.

“The member knows that the only way they can have the staff support he or she needs is to take that money and use it,” Jillson said.

Fred Lewis, a campaign finance lawyer, said he doesn’t object to additional pay for state staffers. They’re probably worth the money, he said. But paying staff who are charged with representing the people out of campaign money, he said, has bad optics.

The solution to eliminating the need for the campaign funds that seep into the state Capitol, Lewis said, would be to pay lawmakers a living wage for their work and to provide them enough money to compensate a sufficient workforce.

“We need legislators and staff who are paid for and equipped and supplied by the state, which is essentially the public,” Lewis said, “and not underwritten in great measure by special interests and the lobby.”

Editor's note: This story has been changed to reflect that Sen. Judith Zaffirini asks her staff for a commitment to work for two sessions. An earlier version said that she usually kept staff members for two years at a time.

Instead of New Ethics Laws, a Study — Again

by Ross Ramsey

Published on April 19, 2013

Most legislation dies.

The Texas Legislature’s regular session still has more than five weeks to go, so it is too early to write an obituary for any bill. That said, it is clear that some ideas just aren’t moving, like regulation of and disclosures by candidates, lawmakers and lobbyists.

Some measures starve for lack of attention, as when lawmakers decide not to even give them a hearing. Some get a hearing but never get a vote in committee. Committees kill some bills, and the ones that get out of there have to get past the lieutenant governor in the Senate, or the House’s perilous Calendars Committee, to get to the floor for debate.

If it passes in one chamber, a bill has to go to the other side of the Capitol and do it all over again. The governor has an opportunity to veto.

The cliché is true: The process is designed to kill bills, not to make new laws.

Most legislation just disappears. Big or persistent issues come back every two years, and the general theory seems to be that anything really important to voters will get another chance, eventually.

Several ethics proposals appear destined for legislatively induced comas. They won’t completely die, but they won’t become law, either. Lawmakers are setting them aside in a nice bundle that will be studied after the session is over.

One proposal, for instance, is to update the financial categories on the personal financial disclosures required of officeholders. They were set a long time ago, when $25,000 was a more unusual number than it is now. That’s the top value lawmakers report on assets; for instance, an officeholder with $500,000 in a company’s stock simply reports ownership of more than $25,000 worth. The numbers worked better in the 1970s.

A proposal to put those reports online appears destined for study hall, too, although lawmakers might require electronically filed reports for the first time, without necessarily making them available online. Creating an investigative division at the Texas Ethics Commission is also on ice.

That “interim study” is a pat on the head for anyone who wants legislators to tighten the rules, or to enforce the ones now in place. It allows lawmakers to set an issue aside without openly voting against it.

In the meantime, they’re working on a periodic tuneup of the Texas Ethics Commission — a perfect legislative vehicle for changing other ethics laws. For instance, one provision would perform triage on complaints to the commission, separating picky and administrative issues from serious violations, and allowing the commission’s staff to resolve some issues without going to the full panel. That’s important; the commission is regularly bogged down by the little stuff.

Some big ideas are dying, however, and lawmakers are wiping away the fingerprints. Who wants to vote against an ethics proposal? Better to defuse the situation, relegating it to the time between legislative sessions for study. If voters really want change, the issue will float back to the surface sometime in the future.

The Ethics Commission bill actually resulted from an interim study. The Sunset Advisory Commission periodically looks at agencies up for legislative review, and it considered but did not recommend many of the issues lawmakers plan to study, again, when this legislative session is over. The interim study would be due in December 2014, on the eve of the next regular legislative session and after another election cycle held under the current rules and regulations.

The interim study dodge — and its relative, the “pilot program” — is not confined to ethics legislation. It is, however, a predictable outcome. Tom Smith, better known as Smitty, lobbies for the consumer advocacy group Public Citizen in Texas and has been in the middle of ethics debates for decades. Over the years, he generally has argued for more disclosure, easier access to the disclosures that are made, and better enforcement of serious infractions by candidates and by people in office.

It is difficult to change ethics law. It often happens only in the midst of scandals that periodically force legislators to clean up their business. And when it doesn’t happen, it fails in a familiar way.

Smitty went to the records, and counted eight studies on ethics over the last 25 years.

Lawmakers are about to start number nine.

Bill That Would End "Double Dipping" Gets Hearing

by Jay Root

Published on April 23, 2013

When state Rep. Chris Turner started looking for other states that allow their politicians to retire without leaving their jobs, he could only find one: Texas.

At a public hearing Monday evening on his bill to end the practice, the Grand Prairie Democrat said the lucrative benefit — which got widespread attention when Gov. Rick Perry revealed that he was both collecting his salary and a pension from the state — flies in the face of the oft-repeated brag that Texas stands out as a beacon of budgetary restraint.

“At this Capitol we frequently tout Texas as a national example for fiscal responsibility,” said Turner, who has filed House Bill 413, which would ban “double dipping.” “This legislation helps us make that case more credibly, I think, by barring elected officials from being paid twice by our state taxpayers for one job.”

The bill was left pending in the House Pensions Committee.

Perry spokeswoman Lucy Nashed said that if both the House and Senate pass the bill and send it to the governor, it would get full consideration.

“The governor will review any bill that makes it through the process and into his desk,” Nashed said.

Perry began drawing a $92,000-a-year pension in early 2011 by taking advantage of an obscure law that allows long-serving members of the state “elected class” — and that includes the longest-serving governor in Texas history — to start drawing a pension without leaving office.

News of the double-dipping came toward the end of Perry’s failed run for president, when he handed in federal disclosure forms that require candidates to reveal any pension income they have. Such disclosures aren’t required under state law.

Turner said he was inspired to file HB 413 after learning of Perry’s early pension draw, but his bill would not cut off the governor's pension. It would only apply to future state officeholders. Nor would it apply to nonelected retirees, including teachers or state employees, who are elected to state office, he said.

In compiling research for the legislation, Turner asked the National Conference of State Legislatures to identify states that allow the type of double-dipping Perry is doing. The group told him Texas was the only state the NCSL could find.

The organization said that more than a dozen states specifically prohibit their elected officials from receiving a pension annuity unless they actually leave office and retire, Turner told the House Pensions Committee on Monday.

In Texas, under a provision that has existed at least since the early 1990s, elected officials can transfer credits gained in the elected class and apply them to the separate employee class system. They can still keep accruing benefits until they retire again.

That’s what Perry has done.

It’s impossible to know how many others may be doing it because members of the elected class don't have to tell anyone about it, and pension benefits are considered a state secret by the Employee Retirement System. Texas Land Commissioner Jerry Patterson has said he plans to avail himself of the double-dipping provision if he is elected lieutenant governor, a job that pays only $7,200 in salary.

Under Turner’s bill, elected officials could no longer use credits accumulated from their service in elective office to retire while still collecting a state salary.

“It’s situations such as this — collecting a pension without retiring — that makes Texans cynical about politics and angry that politicians could ever receive such a lucrative perk that most families could never dream of for themselves,” Turner said.

Rep. Dan Branch, R-Dallas, a member of the committee and a potential candidate for attorney general in 2014, said he supports "the concept” of Turner’s bill.

Meanwhile, Rep. Phil King, R-Weatherford, said he worried about "unintended consequences." He asked if, for example, a county elected official who goes on to serve in state elected office would be impacted by the bill. Catherine Terrell of the Employees Retirement System told King that the legislation applied only to members of the elected class, which includes state district judges and district attorneys but not other county elected officials, including county judges.

Given the late date of the session, which ends in barely more than a month, it’s unclear whether lawmakers will pass it out of committee in time for it to survive passage through a Legislature that generally hasn't shown much appetite for curtailing its own benefits and privileges.

Campaign Finance Loophole Targeted

by Jay Root

Published on April 23, 2013

Politically active nonprofits, which are playing an increasingly important role in state elections, would no longer be able to hide the identity of their major donors under a bill making its way through the Texas Legislature.

Rep. Charlie Geren, R-Fort Worth, says he plans to push Senate Bill 346 through a House committee this week without any changes. Since it has already passed the Senate, the bill would go straight to Gov. Rick Perry if the full House subsequently approves the legislation without amendment.

“My intention is to get the bill out of committee exactly like it came over and take it to the floor, and fight off all amendments and then send it to the governor,” Geren said. A public hearing is set for Wednesday.

Geren and the Senate sponsor, Sen. Kel Seliger, R-Amarillo, say they are targeting nonprofits organized under 501(c)(4) of the tax code, which the IRS says are supposed to be "social welfare" organizations but are allowed to engage in political activity as long as that's not not their primary activity. The bill would trigger disclosure of donors who give more than $1,000 to a group that engages in more than $25,000 of political activity intended to influence an election. The disclosure only applies to political donations.

On the federal level, politically active groups that don’t disclose their donors, most of which are 501(c)(4) nonprofits, have had an outsized impact in recent elections, giving a whopping $300 million in the 2012 elections, according to the Center for Responsive Politics.

The most famous of these groups, arguably, is the Crossroads GPS nonprofit, the brainchild of Texas Republican strategist Karl Rove.

On the state level, such “dark money” campaign spending is in its infancy, but substantial sums have made their way into the body politic already.

According to state figures compiled by Texans for Public Justice (TPJ), a liberal campaign finance watchdog group based in Austin, one politically active nonprofit, the conservative Texans for Fiscal Responsibility, spent about $350,000 in the 2012 elections, most of it in the Republican primaries. (Spending is reported, but contributions are not.)

On the left, the Texas Organizing Project, a 501(c)(4) that advocates for moderate- and low-income Texans, spent about $240,000 over the same period, TPJ figures indicate. A column in the San Antonio Express News last year also identified a 501(c)(4), South Texas Alliance For Progress, behind an effort to torpedo an initiative to fund pre-K education with a small sales tax increase.

Proponents of SB 346 say if the Legislature doesn’t require donor transparency for 501(c)(4)'s this year, elections in 2014 and beyond will be awash with secret money.

“This bill will close down a loophole that is about to become the size of the Grand Canyon,” said Fred Lewis, a lawyer and campaign finance activist who recently registered his approval of the bill during a Senate hearing.

Capitol whisperers say the bill was primarily designed to smoke out the donors behind Texans for Fiscal Responsibility, which is run by conservative activist Michael Quinn Sullivan.

Seliger said fellow GOP senators cited Sullivan’s opposition to the bill when they voted to undo their vote last week approving the bill.

And there certainly is no love lost between House Speaker Joe Straus and Sullivan, who has made the San Antonio Republican a frequent target of his Tea Party infused ire. The group's largest expenditure in the last election cycle, $82,169, went to support Straus’ primary opponent Matt Beebe, according to TPJ figures.

Sullivan calls the Seliger-Geren bill an attack on the First Amendment and notes that labor unions are not covered by the legislation.

“I find it difficult to see where the state of Texas has a compelling interest in regulating the First Amendment right of non-union corporate political speakers differently than others who engage in political speech,” Sullivan said. A call to the Texas Organizing Project was not immediately returned.

Sullivan's opposition isn’t the only hurdle for the legislation. Democrats are also expressing concerns about it and could band together in an unlikely union with their Republican counterparts to kill it.

Several Senate Democrats already joined Republicans in an attempt to “recall” the legislation back from the House after they initially voted to approve it. But the recall effort failed because the bill had already arrived in the House, which treated it like a fumbled football. Senators said they didn't fully understand what the bill did when they approved it the first time.

One of the vote-switchers, Sen. Kirk Watson, D-Austin, said he was afraid there could be “unintended consequences” from the bill and wanted a chance to more fully vet it. He held open the possibility that he could support the legislation once he got a better look at it.

After the Democrats flipped their votes, word spread that Democratic mega-donor Steve Mostyn was behind the move. Mostyn spokesman Jeff Rotkoff acknowledged that the wealthy trial lawyer had concerns about the bill but said he is not working against it.

Rotkoff said the legislation does not specifically mention 501(c)(4)'s and might require the reporting of donations from groups the sponsors weren’t intending to cover.

“Steve agrees with the goal of the bill,” Rotkoff said. “But campaign finance counsel we have spoken with believes the bill could have significant unintended consequences. This is not something Steve is actively working on, but our opinion is that this bill may attempt to do the right thing in the wrong way.”

Oil Lobbyists Overseeing Protection of Threatened Lizard in Permian Basin

by Jay Root

Published on April 24, 2013

When Texas promised to protect a threatened lizard in the oil-rich Permian Basin, state officials entrusted the day-to-day oversight to a nonprofit that sounds like an environmental group: the Texas Habitat Conservation Foundation.

What’s not advertised is the occupation of the board members who created it.

They are all registered lobbyists for the powerful Texas Oil and Gas Association, also known as TXOGA.

The industry group's prominent role in the fate of the dunes sagebrush lizard has angered both environmentalists and influential GOP lawmakers who want to reform the way Texas oversees threatened and endangered species. The flap has also exacerbated traditional tensions between corporate oil interests and independent producers, and it has put Comptroller Susan Combs in the crosshairs of some fellow Republicans.

“This is a case of the fox guarding the hen house,” said Jay Lininger, biologist at the Center for Biological Diversity, which has already taken steps to sue over the state-federal conservation plan. “If the oil and gas industry is regulating itself, then Americans have no hope of a quality environment.”

The controversy has its origins in the special session of 2011, when then-state Rep. Warren Chisum, R-Pampa, slipped an amendment onto the innocuous-sounding “fiscal matters” bill that had to pass because it provided badly needed revenue for a cash-strapped Legislature.

Chisum’s amendment, which he said was pushed by the oil and gas association, granted key state authority over the handling of endangered species matters to the office of the comptroller, a role that has traditionally been played by the Texas Parks and Wildlife Department, officials said.

“There was a group of us, the people from TXOGA, and we said we need to get this done," Chisum told The Texas Tribune. "That’s how it got started. Of course, we brought the comptroller in."

The U.S. Fish and Wildlife Service had already proposed listing the lizard as endangered by then, a move strongly opposed by TXOGA and others in the oil industry, along with virtually any Texas Republican near a microphone.

In response, Combs, working with the oil industry, landowners, local government officials and others, proposed a voluntary program to protect the dunes sagebrush lizard. The idea was to forestall a declaration or “listing” of the lizard as an endangered species, which would come with environmental restrictions that opponents said would inflict serious economic damage on a region described as the nation’s top oil producer.

Lacking wildlife expertise in the state’s chief tax agency, Combs then contracted with a division of Texas A&M University — the Texas AgriLife Extension Service — in November 2011. But A&M needed help on the ground, so it sent out a request for proposal for a contractor that could handle contacts with landowners and oil companies who would sign up for the voluntary program and undertake measures to save the lizard — like cutting down mesquite and removing old oil equipment.

Officials say no one responded to the contracting request. TXOGA then went to Combs and floated a plan to have the oil and gas lobby group start up a nonprofit foundation to implement the Texas Conservation Plan in the lizard’s oil-rich habitat in the Permian Basin, according to TXOGA lobbyist and foundation board member Deb Hastings.

“We did have a conversation with the comptroller’s office to see if it would be appropriate if we set up a foundation temporarily,” Hastings said. She said she did not recall that Combs raised any objections.

The foundation was formed in February 2012 with three registered TXOGA lobbyists overseeing it as board members: Hastings, Robert Looney and Mari Ruckel.

When asked if anyone ever thought putting oil lobbyists in charge of lizard protection in an area dependent on the industry might present a conflict of interest, Hastings said: “I could see where there was some perception risk regarding that, but there was nothing nefarious about this. It was above board. It was meant to ensure the species was not listed.” Hastings emphasized that the foundation hired a wildlife biologist to handle the scientific oversight and run the day-to-day operations.

U.S. Fish and Wildlife withdrew its proposal to list the lizard last summer, but could reinstate it if voluntary efforts fail.

Lesli Gray, spokeswoman for the federal agency, said the officials gathered in Midland this month with counterparts from Texas A&M and the comptroller's office. She also said the comptroller's office has been providing regular updates as required in its state-federal conservation agreement.

"The comptroller is very pleased that the work done by all of the stakeholders involved in this process resulted in a plan that caused the U.S. Fish and Wildlife Service not to list the DSL," said Combs spokesman Lauren Willis. "We are proud of the role we played in that process and the work we did to save the West Texas oil and gas economy."

But some powerful Republican lawmakers are voicing concerns about TXOGA's role and the comptroller's oversight of endangered species. Chief among them is Sen. Kel Seliger, R-Amarillo, whose district includes much of the Permian Basin and the lizard’s habitat.

Seliger said independent oil companies are upset that TXOGA, which represents the interests of giants Exxon, Chevron and others, would be in charge of mitigation efforts for the whole industry — and potentially stacking the deck in favor of itself.

"You might have competitors determining costs that other competitors would have to incur to drill oil wells," he said.

More broadly, Seliger said there is no reason why the state comptroller should be in charge of coordinating the response to endangered species. He has a bill that would move that authority — which includes the right to hold the federal permit Combs now has at the comptroller’s office — to Texas Parks and Wildlife. An oversight board composed of several state agencies, including the comptroller’s office, is included in the latest version of the legislation, he said.

Willis, the Combs spokeswoman, said the comptroller is leaving the matter to the Legislature, but Seliger said the pressure against the legislation has been intense. He said Combs, TXOGA and the major oil companies were all trying to kill it.

“The comptroller and the majors are lobbying vigorously against it,” Seliger said. Rep. Dennis Bonnen, R-Angleton, who is carrying the legislation in the House, said oil industry opponents are trying to “threaten” members who dare support the effort to give oversight authority over endangered species listings to another agency.

“No one has been able to explain to me why our tax collector and accountant for the state of Texas is responsible for managing endangered species issues,” he said. “It makes no logical sense whatsoever.”

For its part, TXOGA is poised to step out of direct involvement by handing over its authority to other board members. But the current board got to select the new one, and it has already identified its incoming chairman: Chisum, who sponsored the TXOGA-backed bill giving Combs the authority to handle endangered species matters.

Now an oil and gas lobbyist himself, Chisum tapped two others to join him — biochemist Glenna Kyle and Joe Maley of the Texas Agricultural Land Trust, TXOGA officials said.

Chisum was asked to respond to complaints that oil company interests shouldn't be in charge of the foundation set up to enact the conservation plan. He said qualified biologists are hired to do the work, but noted oil companies were paying to participate in the voluntary plan. Chisum said they should have a say in how it's implemented.

“It’s our money," he said.

Rich Man, Poor Man, Beggar Man, Lawmaker

by Ross Ramsey

Published on April 25, 2013

You don’t have to be rich to be a state legislator in Texas, but it doesn’t hurt.

The state’s time-honored “citizen-legislator” system assumes lawmakers will have regular jobs and will visit Austin periodically to make law, earning their keep on one end of the trip and doing public service on the other.

But it’s easier to pay attention to public service if the regular job is sufficient. When it’s not, members could arguably be open to the influence of those who are willing to do favors for them.

One argument for the well-to-do came up in an interview with actor Clint Eastwood, a former mayor of Carmel, Calif., who told Esquire magazine in 2008 why he ran in 1986. “It’s making sure that the words ‘public servant’ are not forgotten. That’s why I did it. 'Cause I thought, I don’t need this. The fact that I didn’t need it made me think I could do more. It’s the people who need it that I’m suspect of.”

Texas has a fair number of legislators who — in financial terms, anyway — don’t need this. The best-known example is Lt. Gov. David Dewhurst. According to filings he made with the federal government during his run last year for the U.S. Senate, Dewhurst reported a net worth approaching $200 million. That would have made him the third-richest member of that body, had he won election.

Former Texas House Speaker Pete Laney says that in the Legislature, those who aren’t as well off can still manage just fine.

“There’s some that try to make it without it being obvious that they’re broke,” Laney said. “The per diem has made a little difference in that. And so has the larger staff. That’s let some of them do a little more.”

Even so, the legislative job pays only $600 a month. The daily payments while lawmakers are out of their district on state business — when they’re in Austin, for instance — add to that, but not a lot. With the per diem pay for a legislative session added in, a state lawmaker in Texas makes an average of $17,700 annually. A full-time minimum wage earner makes $15,080 per year.

The real benefit is in the legislative pension, which vests after eight years in office and is based on the $125,000 annual pay of state district judges (an amount set to increase to $150,000 in the budget now working its way through the Legislature). A lawmaker retiring with 20 years in office would receive an annual pension payment of $57,500 for the rest of his or her life.

It’s not fair to generalize about the wealth of the lawmakers in a Legislature that has seen its share of wealthy misers and generous paupers. Sometimes, the lawmakers don’t know the details about one another.

“You’ve got people who are always hitting people up for a job,” Laney said. “You’ve got some that are wealthy but nobody knows it.”

But lobbyists and others seeking leverage with lawmakers do pay attention, according to former state Rep. Tommy Merritt, a seven-term Republican from Longview. A member who is scraping out a living might be more susceptible to trading favors.

“The difference is that the legislator who can’t afford it is susceptible to influence that might not even register to him as influence,” Merritt said. “They see that it’s legal, that everybody does it. They start to believe there is nothing wrong with it.”

Though Dewhurst has been in office in Texas since 1998, the voters in his home state could only guess at his actual wealth until last year. Texas disclosure laws, in this regard, allow candidates to give much fuzzier answers to questions about their assets and income. In fact, the state’s personal financial disclosure forms effectively prevent lawmakers and candidates from giving precise answers, even if they were so inclined.

Officials have to list the number of shares they own in a particular stock, within ranges (i.e., fewer than 100, 101 to 499 and so on up to a maximum of 10,000 or more). If they sold anything, they have to report a net gain or loss, again in ranges, with the highest being $25,000 or more. A gain of $25,001, for purposes of reporting stock sales in Texas, is identical on the reports to a gain of $25 million. Reformers of all political stripes have been calling for updates to those ranges for years, with no effect.

The reporting is not completely opaque, however. Some examples from The Texas Tribune’s Ethics Explorer, a compilation of data culled from lawmakers' personal financial disclosures to the state:

- Sen. John Carona, R-Dallas, is president and CEO of the largest homeowners association management company in the U.S. His Dallas home is valued at $7 million.

- Sen. Robert Nichols, R-Jacksonville, owns 748 acres of land in Colorado worth $12.3 million and lives in a 13,975-square-foot home in Jacksonville.

- Sen. Kel Seliger, R-Amarillo, owns a home in Carmel, Calif., valued at $1.1 million. The stock listings in his state-required financial disclosure go on for 62 pages.

- Sen. John Whitmire, D-Houston, owns a $1.4 million residence in Houston and $3.7 million in real estate near Brenham.

- House Speaker Joe Straus, R-San Antonio, has an insurance and investments business and extensive stock holdings.

- Rep. Jim Pitts, R-Waxahachie, owns multimillion-dollar homes in Austin, Dallas and in Utah, and a house in his hometown worth $318,000. He owns a title company.

- Rep. Charlie Geren, R-Fort Worth, is a real estate broker, owns a barbecue restaurant, has a ranch in Johnson County and owns an interest in a Fort Worth landfill.

- Rep. Craig Eiland, D-Galveston, owns a $451,650 home in Galveston, a $3 million home in Austin and his own law firm.

- Rep. Tom Craddick, R-Midland, a former House speaker, owns homes in Midland and in Llano that together are worth $1.6 million, and several properties in Midland and Travis counties through various partnerships.

Not everyone in the Legislature has assets like those to report.

And lawmakers who need things — jobs, meals, campaign donations, whatever — are easier to influence, at least in theory. But without pointing to anyone by name, Merritt and others say wealth isn’t the only key to that. Some wealthy members are just as close to outsiders and lobbyists as their less prosperous coworkers.

“It is a rich man’s game, and you are making everybody susceptible to undue influence when you put them in that position,” said Rita Kirk, director of the Maguire Ethics Center at Southern Methodist University in Dallas.

“If they offer you a meal when you need one, you’re going to be more influenced by that if you had no need of it,” she said. “We are influenced when we need the favor.”

On the wealth side, voters need to know where the money is, what the investments are, and whether that is connected in some way to what the lawmaker is doing in office. On the poorer side, the question is — to use Kirk’s example — who’s paying for dinner?

The first situation is troublesome when disclosure standards are low. The second might be solvable, if Texans are willing to pay high enough salaries to make lawmakers less susceptible to high-culture panhandling.

“What you’re trying to do is find some healthy balance,” Kirk said. “Voters should be able to make decisions between people who have ideologies like theirs or that can represent them well. We eliminate a whole cross-section of people who can’t afford it and who perhaps are unduly influenced by the fact that they have to take money in order to serve.

“Really, if we want good government,” she said, “there is a certain amount we have to pay for it.”

Disclosure Bills Get Little Love From Top Leaders

by Emily Ramshaw

Published on May 1, 2013

Six months before the Texas Legislature kicked into gear, Gov. Rick Perry told reporters that candidates for public office should be as “transparent” as they can possibly be with their personal financial interests.

It has remained the term du jour for state leaders this legislative session, used by everyone from House Speaker Joe Straus to Lt. Gov. David Dewhurst to endorse honesty in budgeting, improve grant-making in the state’s troubled cancer agency and get to the bottom of conflicts in higher education.

But with just four weeks remaining in the legislative session, there has been little to no pressure from the top — including key committee chairs — to pass measures that would force greater transparency upon Texas’ elected officials.

The state's top leaders say they've been focused on pressing legislative priorities. For Perry, that's improving budget transparency. For Straus it's water, education and transportation. For Dewhurst, it ranges from balancing the budget without raising taxes to reforming high-stakes testing and expanding school choice.

While Dewhurst has not been out promoting lawmaker transparency bills, the lieutenant governor said that "government transparency has always been a priority of mine." He is supporting legislation the comptroller proposed to help taxpayers better understand state finances, and added that "the Legislature has also reacted strongly this session to [the Cancer Prevention and Research Institute of Texas'] lack of transparency as well as transparency issues with the UT Board of Regents."

Straus said while he believes ethics reforms that directly affect lawmakers are important, he wants to "let the process work." (The bill to reauthorize the Texas Ethics Commission, which could potentially be loaded up with transparency amendments, could hit the House floor as early as this week.) Straus also pointed to his own appointees to the board that oversees the Ethics Commission, and said he expected them "to take the lead on many of these issues."

Perry wouldn't comment on specific legislation. While he has voluntarily released his own tax returns for years, and said that "transparency and accountability to the people of Texas is extremely important to me," he has stopped short of publicly backing measures that would force legislators to disclose more information.

Instead, he said, "Texans deserve a much higher level of transparency when it comes to their tax dollars. We need to make it easier for them follow how their hard earned dollars are spent in Austin."

State Sen. Wendy Davis, D-Fort Worth, said it's one thing to call for transparency in state government, another entirely to hold lawmakers to higher standards. “Anytime a bill impacts the legislators directly, it seems to go nowhere,” she said. “It shields us from transparency.”

Several bills in the House and Senate that would improve reporting on lawmakers’ outdated personal financial forms or put the archaic paper filings online haven’t even gotten hearings in the three committees where they’ve been referred: Senate State Affairs, House State Affairs and House Elections.

Three bipartisan bills aimed at slowing the revolving door that sends elected and appointed officials directly into the lobby appear jammed; two haven’t received hearings and one has been pending in committee for weeks.

A House bill to end Texas’ practice of double-dipping — which has allowed politicians, including Perry, to start reaping retirement benefits without leaving their jobs — only recently got an initial hearing.

And a measure with 25 co-authors that was nearly derailed during a tumultuous February hearing — Rep. Giovanni Capriglione’s bill to require lawmakers and their immediate families to report contracts with governmental entities — is still tangled up in House State Affairs. The Senate companion filed by Davis hasn’t gotten a hearing.

Asked about the fate of such ethics legislation, House State Affairs Committee Chairman Byron Cook, R-Corsicana, said it’s not that legislators are opposed to shining a bright light on their own affairs. “The whole issue with transparency is, let’s deal with it in a forthright manner,” he said. “If we’re going to advance transparency, let’s make sure we do it right.”

His Senate counterpart, State Affairs Chairman Robert Duncan, R-Lubbock, said he's not opposed to such measures, but that they should be executed in the context of comprehensive reform, rather than with "single-shot" bills from lawmakers fresh off the campaign trail.

“In the system of ethics reform that we operate under, I think most members believe that these single-shot bills shouldn’t be heard, and we shouldn’t deal with ethics reform on a piece-meal basis," he said.

So far, the only “transparency” legislation getting real traction would establish interim studies on ethics, require elected officials who run for higher office (i.e., Perry) to cover their travel and security expenses with campaign funds and force politically active nonprofits to reveal the identities of their major donors. None of those bills change the level of disclosure for lawmakers themselves.

Capriglione, R-Southlake, expressed frustration with the process. He said that the lower chamber has already passed an interior decorating bill, but not meaningful transparency legislation. “I thought we’d be a lot farther along by this point, given the conversations we were having prior to the session," he said.

A spokesman for Dewhurst said that while the lieutenant governor has disclosed his own personal finances (in the form of tax returns during his failed bid for U.S. Senate), legislating lawmaker transparency can be complicated. He noted that the Center for Public Integrity ranked Texas fourth for financial disclosure by lawmakers.

"Texas needs to require sufficient disclosure to allow voters to make informed decisions and help avoid conflicts of interest," said Travis Considine, chief spokesman for Dewhurst. "But we don't want to unnecessarily discourage good people from running for office because the process is too invasive for them and their family."

House Disclosure Bill Won't Get a Vote

by Emily Ramshaw and Becca Aaronson

Published on May 8, 2013

Updated May 9, 5:15 p.m.:

State Rep. Giovanni Capriglione's bill to require legislators to disclose government contracts with businesses in which they or their immediate family own at least a 50 percent stake won't get a vote in the House — unless he can tack it onto an Ethics Commission reform bill.

The measure, House Bill 524, made it out of the House State Affairs Committee but couldn't squeeze onto the lower chamber's calendar ahead of Thursday night's deadline for taking an initial vote on House bills. The Senate companion, by Sen. Wendy Davis, D-Fort Worth, has not moved.

"Obviously I'm disappointed that we won’t be voting on a piece of transparency legislation I think is very important this session," Capriglione said.

He said he'd be talking to the author of the omnibus Ethics Commission reform bill, but that regardless, he'd be offering his measure as an amendment to it when it hits the House floor.

"Either way, members of the House should vote to see if we should add more transparency to ourselves," he said. "Before we start to ask other elected officials, other agencies, to be more transparent, we should start withourselves."

Updated May 2, 1:50 p.m.:

Freshman state Rep. Giovanni Capriglione's bill to require legislators to disclose government contracts with businesses in which they or their immediate family own at least a 50 percent stake has squeezed out of the House State Affairs Committee.

It's unclear whether there's any pressure to get House Bill 524 out of the influential Calendars Committee and onto the House floor. Even if the measure passes the House, it will face a steep climb in the Senate with just three weeks remaining in the 83rd legislative session.

The bill, as revised in committee and voted out Thursday night, would require state officials to disclose government contracts that they, their businesses, their immediate family members or subcontractors acting on their behalf have entered into. Under the measure, contracts would have to be reported if the cost of goods or services sold exceeded $10,000 in the year of the report — or for individual contracts that exceeded $2,500.

Original story:

Weeks after freshman state Rep. Giovanni Capriglione, R-Southlake, was publicly scolded over an ethics bill he brought before the powerful House State Affairs Committee, the lawmaker says he has found middle ground with the veteran legislators who rebuked him.

Capriglione said there is an agreement that would get House Bill 524 — which would require legislators to disclose government contracts with businesses in which they or their family members own at least a 50 percent stake — passed out of committee and on to the House floor. He said the biggest change in the bill is how many relatives lawmakers would have to report. Under the compromise, which is still being negotiated, it would be immediate family: parents, children and spouses, and a best effort at including siblings.

Any such compromise seemed like a pipe dream as recently as last month, when state Rep. Harvey Hilderbran, R-Kerrville, and other committee members painted Capriglione's bill as a "vendetta" and "sour grapes" against their former House colleague Vicki Truitt, who Capriglione defeated last year after a bruising campaign.

At the time, Hilderbran suggested that Capriglione had "bad motives." Hilderbran couldn't immediately be reached for comment on Friday.

After the hearing, Truitt sent out an email to "selected friends" to tell them that her former opponent had been "spanked in a very public way.”

“He had been making the rounds at the Capitol telling members he was going to right the wrongs of his predecessor’s ills, and presumed he would win the day with his pristine legislative proposal,” she wrote. “What happened to him in the State Affairs Committee was not what he expected.”

Since the hearing, Capriglione said, both media attention and grassroots campaigns from open government proponents have kept the bill in the forefront of lawmakers' minds. On Thursday, the influential conservative group Empower Texans launched automated phone messages in the districts of the committee members most vocally opposed to Capriglione’s bill, urging them to ask their representatives to reconsider.

Capriglione said he has now spoken with his toughest critics, who told him they "wanted to ask tough questions," but added that he had done "a good job answering those questions."

While they didn't apologize for their initial response to his measure, Capriglione said, "they’ve been really open about working with me on this."

Lobbyist Transparency Bill Heads to Perry's Desk

by Brandi Grissom and Maurice Chammah

Published on May 9, 2013

A bill that would require lobbyists to disclose the names of lawmakers who pay them using campaign funds for services, including political consulting, is headed to Gov. Rick Perry for approval after the Senate passed the measure on Thursday.

"It's just more disclosure," said state Sen. Kevin Eltife, R-Tyler, the Senate sponsor of House Bill 1244.

Eltife said an increasing number of lobbyists also do campaign consulting work for lawmakers during the interim between legislative sessions. Lobbyists are already required to report the special interests for which they lobby at the Capitol.

State Rep. Terry Canales, D-Edinburg, who co-authored HB 1244 with state Rep. Charlie Geren, R-Fort Worth, said the measure was part of an ongoing effort to increase legislative transparency.

"We want to see what lobbyist involvement is to the greatest extent possible," Canales said. "It allows us to see who is being influenced in which manner. It expands their reporting duties, which in my opinion is best for public policy."

Judicial Pay Raises Bring a Little Something Extra

by Ross Ramsey

Published on May 10, 2013

Twenty-three dollars is not a lot of money, but that small figure could have big political consequences.

Lawmakers’ pensions are tied to the salaries set for state district judges. Every $1,000-per-year increase in those salaries adds $23 to the amount paid to retired lawmakers for every year they served in office.

The Legislature is quietly considering a $26,909 raise for those judges. Quiet consideration is a term indicating something that is buried well inside something else, so that senators and representatives never vote on it out in the open, all by itself. Judicial salaries can be changed with a line in the enormous state budget; the vote here will be on a budget that happens to include a raise for the people who wear black robes at the office.

Almost everybody votes for the budget, even though each has at least one thing he or she disagrees with in the state’s two-year spending plan. Judicial salaries, even if linked to the lawmakers’ own pensions, are probably not a big enough issue to trigger a vote against the whole budget. It is an all-or-nothing vote.

As a matter of politics, however, it is a vote that opens officeholders to criticism of fluffing their own financial pillows while leaving other things without enough money.

The other side to this is a pretty good argument coming from the judges. Their current salaries were set in 2005. Counties are allowed to supplement the state minimum, but that doesn’t affect state lawmakers’ pensions.

Judges make less doing their jobs than the private practice lawyers who work in front of them, according to a salary study completed before the session by the state’s Judicial Compensation Commission.

That is true, to some extent, all over the country. But Texas judges rank on the low end for judicial pay when compared with their counterparts in the six most populous states. Based on inflation alone, the commission said, the base salaries ought to be around $140,000.

That panel recommended raising salaries to $151,909, a number based on comparisons with private sector pay and with judicial salaries in other big states. That would be an increase of 21.5 percent.

It would increase pensions for lawmakers by the same percentage. To figure the basic benefit, you multiply the average salary of a state district judge by a lawmaker’s years in office by 0.023. Judges currently make $125,000, so a retired lawmaker with 20 years of service would get $57,500 in annual retirement. Not a bad pension for a job that paid only $600 a month.

Lawmakers have embraced the recommendation to increase pay, which would make the judges happy and eventually pay off big for the legislators, too. The recommended increase — to $151,909 — would add $12,378.14 to the pension of that hypothetical 20-year lawmaker. That’s what happens with that little $23 per $1,000 number when you run it through the formula.

To qualify for a pension, legislators have to be in office for at least eight years, and if they serve for at least 12 years, they can begin collecting their pensions at age 50 instead of waiting until age 60. Increases in pay for judges affect not only future retirees but also current ones. It is probably worth pointing out that some of those current retirees are lobbyists, hanging around the Capitol, where it would not be entirely out of line to mention support for those hard-working jurists.

The state’s budget is being worked out by a small conference committee dispatched to settle differences between what the House and Senate have already approved. They’ve got big fish to fry, with hanging controversies over public education spending and money for the state’s water and transportation infrastructure, and steady inquiries from the governor’s office about leaving something aside for tax relief. The salary issue is relatively minor, given those worries.

There have been efforts to disconnect judicial pay from legislative retirement, to remove the built-in conflict of interest. But they have fallen short.

State Sen. Robert Duncan, R-Lubbock, tried — again — to break the link, but he now says that won’t fly.

“I thought I had a pretty good idea,” he said. He just couldn’t get his colleagues to go along.

Wonder why?

House Sends Campaign Disclosure Bill to Perry

by Emily Ramshaw and Morgan Smith

Published on May 14, 2013

Updated May 14, 1:40 p.m.

A divisive measure requiring the disclosure of certain unreported political donors passed the Texas House on a 95-52 vote on Tuesday, denying the Texas Senate's desire to have it back in its clutches. The measure, which passed Tuesday with little of Monday's debate, now heads to Gov. Rick Perry's desk.

Perry spokeswoman Lucy Nashed said now that the measure has passed, the governor will take a final look at the language before determining whether he'll sign it.

Original story:

A divisive measure requiring the disclosure of certain unreported political donors won early approval in the Texas House on Monday — denying, for the moment, the Texas Senate's desire to have it back in its clutches.

If Senate Bill 346 gets final approval in the lower chamber on Tuesday without amendments, as its supporters are hoping, it would go straight to the governor's desk rather than back to the Senate. The bill passed the upper chamber in April in a vote a majority of senators now say they'd like to revisit.

SB 346, by state Sen. Kel Seliger, R-Amarillo, would force tax-exempt, politically active nonprofits that fall under section 501(c)(4) of the tax code — the part that oversees groups involved in “social welfare” — to disclose their donors. The bill, which would affect major political givers on both sides of the aisle, originally passed the Senate 23-6; a day later, led by state Sen. Dan Patrick, R-Houston, senators voted 21-10 to reverse themselves, some saying they hadn’t understood what the bill required. Seliger said at the time that his colleagues had faced heavy lobbying by major political donors to change their votes.

The Senate’s effort was too late; the measure was already in the custody of the House. State Rep. Charlie Geren, R-Fort Worth, the bill’s House sponsor, has been shepherding the measure through the lower chamber, working to get it passed without amendments so it doesn't have to return to the Senate.

“Certain groups keep scorecards and continuously bombard the internet. All that’s fine, it’s what this process is about,” Geren said. “The problem occurs when these groups wade deep into the political process … and use a loophole that keeps their donors secret.”

Michael Quinn Sullivan, a conservative activist whose organizations, Empower Texans and Texans for Fiscal Responsibility, routinely work on behalf of — and against — Republican candidates he deems too moderate, tried to convince House lawmakers to defeat the measure. In an email ahead of Monday's debate, he said Seliger and Geren “want to open up every single donor to every single conservative group (home-school, pro-life, fiscal, property rights and so on) in Texas to be vulnerable to attack.”

Though many believe his organizations would fall under the purview of the bill, Sullivan said that’s still unclear, that it “probably all depends on how folks are corporately organized.” The measure "would clearly impact a large number of groups left and right,” he added.

In the 2012 election cycle, groups that used the 501(c)(4) designation spent more than $300 million to influence elections, according to the Center for Responsive Politics.

Geren successfully fended off several amendments, some of which would have cleaned up language related to labor unions that even the bill's supporters acknowledge isn't perfect. He said that can be done during House debate on an omnibus Texas Ethics Commission reform bill.

If, by chance, the House amends the measure on third reading and the bill requires lawmakers from both chambers to meet in conference committee, Seliger said he'd be sure that Patrick takes a close look.

"You can bet on one thing," Seliger said. "I'm going to insist that he read it."

Barring amendments, it's unclear whether Gov. Rick Perry will sign SB 346 in its current form.

Chris Hooks contributed to this report.

Irony Abounds in Debate Over Ethics Proposals

by Emily Ramshaw and Aman Batheja

Published on May 16, 2013

All session long, freshman state Rep. Giovanni Capriglione has been clamoring for greater transparency, trying to force lawmakers and their relatives to disclose their contracts with government agencies and shine a light on closely held state pension benefits. When his first transparency bill got a committee hearing, his senior House colleagues effectively showed him the door.

But when it came time this week to vote on Senate Bill 346, a measure that would force certain tax-exempt, politically active nonprofits to disclose their donors, Capriglione, R-Southlake, was a “no.”

Capriglione said he voted against the bill — which ultimately passed the House without amendments to ensure its safe arrival to the governor’s desk — because it includes language that exempts labor unions. (It’s terminology the bill’s House sponsor, Rep. Charlie Geren, R-Fort Worth, had vowed to clean up in an omnibus ethics bill headed to the floor next week.)

“I would have voted for the bill if it didn’t have that exemption,” Capriglione said, “though still with concerns.”

Opposition to the bill from Michael Quinn Sullivan, a conservative activist whose nonprofit Texans for Fiscal Responsibility was a key backer of Capriglione’s campaign and of his transparency efforts, was much more pointed. In an email blast and several social media postings, Sullivan, whose group is a 501(c)(4) — the federal tax code category SB 346 is meant to apply to — called the bill an “Obama IRS-style attack” that would open up every donor to conservative groups to “vicious attack.”

In this session's transparency fight, ethics watchdogs suggest there has been plenty of irony to go around.

The Legislature's veteran Republicans — tired of Tea Party groups and far-right activists like Sullivan working to defeat them via politically active nonprofits — backed a bill requiring such groups to report their donors. But they intentionally let a bill to subject lawmakers and their relatives to greater financial scrutiny, Capriglione's House Bill 524, die on the vine; it made it out of committee but never to the House floor.

“We’re subjecting them to transparency,” state Rep. Carol Alvarado, D-Houston, said during House debate on SB 346 early this week. “Yet some in this body don’t want transparency that directly affects them.”

Meanwhile, Sullivan and other conservative activists actively promoted lawmaker transparency measures like Capriglione's, but tried to defeat legislation requiring them to reveal their groups’ donors.

“The people that holler the most for transparency,” Geren said during debate on SB 346, “are the ones fighting it now.”

Reached via email, Sullivan said there was no contradiction.

“Pretending like they are the same is intellectually dishonest at best," he said.

He argued that Capriglione's lawmaker transparency bill, which would've required legislators to disclose government contracts with businesses in which they or their immediate family own at least a 50 percent stake, was “targeted at deterring corruption and the appearance of corruption.” Forcing certain politically engaged nonprofits to reveal their donors “is designed to thwart the right of citizens to engage in anonymous political speech,” Sullivan said.

“Those legislators who want to hide their contracts and family sweetheart deals are no doubt eager to make this dishonest comparison,” he added.

But Craig McDonald, executive director of the left-leaning money-in-politics group Texans for Public Justice, said it's a fair comparison. His group is also a 501(c)(4) and will have to provide details about its donors under the legislation. He said the back-and-forth on the ethics bills working their way through the Legislature just goes to show that "transparency is good unless it applies to you."

The full House may yet get a chance to vote on Capriglione's government contracts measure; he has said he'll offer it as an amendment on Monday to an omnibus bill to renew the Texas Ethics Commission. The donor disclosure bill will likely get another vote that day too. Geren has said he'll offer it as an amendment to the Ethics Commission bill — without the exemption for labor unions — to give the measure a shot in the event Gov. Rick Perry vetoes SB 346.

There's a decent chance Perry could nix that bill. The labor union exemption, which even the bill's supporters suggest is problematic, could give the governor grounds for a veto.

Ethics Commission Bill Forces Tough Votes

by Emily Ramshaw

Published on May 20, 2013

Updates throughout:

A housekeeping bill to make administrative improvements to the Texas Ethics Commission forced House lawmakers into a lot of tough votes on Monday. Under pressure, and facing a laundry list of record votes, they tacked on several amendments to strengthen the disclosure rules that govern them and their contributors.

Senate Bill 219 — the Ethics Commission’s so-called sunset reform bill that got tentative approval on Monday with a 133-14 vote — doesn’t have to pass; the agency is constitutionally protected. But it was the primary vehicle left for dozens of ethics bills that House legislators had so far been unwilling or unable to pass.

Among the amendments added were state Rep. Dennis Bonnen’s measure to require railroad commissioners to resign from their post to run for other office; state Rep. Giovanni Capriglione’s bill to force lawmakers to report government contracts they or their family members hold more than a 50 percent stake in; and state Rep. Donna Howard’s bill to put lawmakers’ personal financial disclosure forms online with their home addresses redacted. All will have to get the approval of the Senate — which is no sure thing.

Lawmakers also approved an amendment by state Rep. Charlie Geren, R-Fort Worth — a version of which is sitting on Gov. Rick Perry's desk — that would force tax-exempt, politically active nonprofits that fall under section 501(c)(4) of the tax code to disclose their donors. Unlike the version on Perry’s desk, Monday’s amendment did not exempt labor unions, which had been a sticking point for some GOP lawmakers.

But they also passed a measure that Jim Clancy, the new chair of the board of the Texas Ethics Commission, said strips out the "only provision in the [reform] bill that makes the agency stronger."

That amendment, by Rep. Van Taylor, R-Plano, requires court appeals of Ethics Commission rulings to be tried "de novo," meaning they can take into account evidence collected by the commission, but not the results — from sanctions to rulings — of the investigation. Clancy said that would make the commission's hard work and decisions a waste of time, but supporters of the amendment said it properly curtails the agency's authority.

“What this bill would do, is once you get to court, it means you must have substantial evidence to win,” said Rep. Craig Eiland, D-Galveston.

Several controversial amendments failed, some after closer votes than others.

An effort by Rep. Phil King, R-Weatherford, to move the state’s Public Integrity Unit, which investigates state officials, from the Travis County district attorney's office to the attorney general's office failed with a 75-69 vote. In the end, he tacked on an amendment to study whether some of the unit’s duties could be moved to the AG’s office.

An amendment by state Rep. Allen Fletcher, R-Cypress, to change the name of the Texas Ethics Commission to the Texas Compliance Commission got voted down overwhelmingly.

Meanwhile, Democratic Rep. Chris Turner’s amendments to update and improve lawmakers’ financial disclosure forms and force them to report pension income never came up for a vote; he pulled them down after laying them out.

The measure faces one more vote in the House on Tuesday before it returns to the Senate. It’s likely the House amendments will have to be hashed out with Senate lawmakers in conference committee.

Another bill that got an early OK on Monday night calls for an interim study to review the types of information lawmakers should have to report on their personal financial statements.

For Lawmakers, Ethics Reform is Complicated

by Ross Ramsey

Published on May 20, 2013

It’s hard for the wolves to regulate the wolves, isn’t it?

This week — the last one of the 20-week legislative session — lawmakers will consider the ethics, in campaigns and in office, of themselves and their colleagues. The legislation in question would keep the Texas Ethics Commission going, and with that as the primary subject matter, everything that might be considered by that agency, or that says “ethics” in a way the lawyers approve, could be up for consideration.

Not that lawmakers want to consider it. Transparency is the buzzword of the moment, and lawmakers got to Austin in January promising all sorts of disclosures that would shine the light on conflicts and curiosities, and punishments for bad behavior. Much of that was jettisoned between then and now.

“They’re not interested in this,” Randall “Buck” Wood, a former state official and elections and ethics expert who now practices law, said Thursday at a TribLive forum hosted by The Texas Tribune. “It’s not that they’re all crooks. It’s not that they all have conflicts of interest. The more information they have to put out there, the less they like it. It’s not necessarily that it’s going to be bad or that it’s going to be used by their opponent. They just see it as a problem, as a burden.”

Anticipating the meager demand for disclosure and enforcement, lawmakers have already set up a study — to be done after the legislative session — on changes that might be made to improve transparency and compliance in the public arena.

The floor debate on the commission, assuming it isn’t derailed like so many other issues in these final days, could be interesting. Ideas that slipped away in other legislation could return in the form of amendments.

For instance, Rep. Giovanni Capriglione, R-Southlake, a freshman, proposed requiring legislators’ family members to report business contracts they have with public entities. It passed out of a committee, but not in time to get through the full House and proceed to the Senate. He’ll try it again as an amendment to the ethics bill.

“This was a session of missed opportunities,” Capriglione said at TribLive. “I think the environment is such that it’s difficult to work on those things and really make changes.”

One bill that is sitting on the governor’s desk would require some tax-exempt organizations to reveal the names of their donors if the organizations do political work. It doesn’t include labor unions, which might be enough to merit a veto. Its authors have promised to try to attach another version — with unions, this time — to the ethics bill, just in case.

Speaking of the governor, remember that moment in the last presidential race when he revealed that he was collecting his state pension, even though he is still on the state payroll? That tidbit rolled in long after it was clear that someone else would get the Republican nomination. But Texas lawmakers didn’t miss it. Legislation that would require disclosures of those pensions fell short. That will be an amendment.

Lawmakers turned away proposals to tighten their personal financial disclosures — stricter federal standards were suggested by some as a good model — and to put those reports online where voters can see them.

The Senate overwhelming approved a bill that would have limited the terms of statewide elected officials, promoted by some as a way to keep the public pipes clear of cronyism, and by others as a way to clear long-timers from the top of the government organization charts to make way for ambitious people below. The House spiked that one this week, as it has in previous years. Not everybody listed that one with other ethics bills, but it was sold that way.

The biggest modern changes in good government laws in Texas followed the Sharpstown bank stock scandal in 1971 and a scandal in the early 1990s that illuminated the literal and figurative canoodling between officeholders and special interests at that time. The first produced sweeping open government laws. The second produced the ethics commission.

“It’s something they don’t want to do and they only do it when they have to,” Wood said. “And that’s when it becomes a real major public issue in the state.”

Is the public asking for changes?

“No,” he said. “There’s not that kind of pressure right now.”

For John Carona, Conflicts and Interests

by Jay Root

Published on May 20, 2013

The Brookfield subdivision in Pflugerville, north of Austin, lies two miles from Interstate 35 in a bland patch of suburban sprawl, the kind that sprouts like clover on the edge of cities. Cookie-cutter homes line winding streets with tea-themed names like Earl Grey Lane and Darjeeling Drive. Two playgrounds, erected in the middle of circular intersections, fill with children when school lets out. In the summer a fenced-in swimming pool — for Brookfield residents only — provides a break from the punishing Texas heat.

Shawn Riggs lives on Sally Lunn Way in a beige two-story house that he bought for $137,559 in 2003. Like all his neighbors — and a growing number of people across the state — Riggs belongs to a homeowners’ association, which charges monthly or annual fees to care for common areas, enforce deed restrictions and, at least in theory, maintain property values. One day this past February, Riggs went to the post office to retrieve a certified letter. He had been in a long-running spat with the Brookfield Owners Association over some mistaken fines levied against him for not taking care of his lawn. Riggs believed the letter would contain good news. For almost two years he’d been waiting for the property managers to acknowledge what he’d been saying since he’d received a nasty little notice warning him to cut his grass or else: They had gotten the wrong yard.

As Riggs had explained, it was his neighbor’s house that had been pictured in the notice he had received in June 2011. So he printed out images from Google Maps to prove it. He had emails documenting his increasingly vociferous objections. He had even received a response from the property managers saying his protests had been “noted” in his file.

None of that was in the letter, though. Instead, typed in capital letters across the top of the page were the words “CITATION — FORECLOSURE.” Riggs, a trim 39-year-old technician at a semiconductor equipment plant, felt like his chest was going to pop open. Over time, $50 in disputed fines had ballooned into more than $2,000. Now they were coming after his house.

I first met Riggs in mid-March, a few weeks after he received the foreclosure letter. By then he had decided to fight back, even if it meant it would cost him more to sue than to settle. He wasn’t going to let the Brookfield Owners Association shake him down. “Your HOA should not have that much power,” he told me.

And yet, in many cases, an HOA does have that much power. According to estimates by the Community Associations Institute, the industry’s chief lobbying group, almost a fifth of the U.S. population — including 3.4 million Texans — now live in a residence that is managed by some type of property owners’ association. These associations, ostensibly created by and for the people in a neighborhood, usually operate more like mini-government agencies, assuming responsibility for duties that cities and counties typically perform: maintaining the parks and pools, providing utilities, repairing streets and in some cases enforcing the speed limit. Which is exactly why there are so many of them; nowadays, cities and counties often require new developments to create property owners’ associations. In a booming state like Texas — and especially in suburbs like Pflugerville, which is one of the fastest-growing places in the country — outsourcing these services to an HOA management company may be the only option for a cash-strapped municipality.

Not surprisingly, HOAs have become a big business. They generate $40 billion in annual assessment revenue (the dues collected from individual homeowners) and $35 billion in reserves, representing a huge government-like contracting opportunity — only without all the procurement safeguards and transparency guarantees expected of taxpayer-supported entities. The largest HOA management company in the country is Dallas-based Associations Inc., better known as Associa. It oversees Riggs’ HOA, along with 9,000 others in 31 states, as well as Mexico and Canada. Over the past 34 years, the company has been transformed from a small business into an industry behemoth by its founder, John Carona.

But the Dallas millionaire isn’t just the president and CEO of Associa. He’s also a powerful state senator who chairs the Committee on Business and Commerce and who, back in 2001, authored the law that enshrined pro-industry HOA foreclosure practices in statute, ensuring that associations like Brookfield’s could continue to aggressively collect fees and dues from homeowners. And if you’re flabbergasted by that fact, well, you don’t know much about Texas politics.

Texas, as any seventh grader can tell you, has a part-time Legislature whose members typically have full-time jobs in the private sector. The framers of the state constitution wanted it this way because they were suspicious of centralized government and saw a citizen legislature as a chief antidote. That belief still holds strong. Successive generations of Texans have insisted that their legislators, now paid $7,200 a year in salary, meet in regular session for only 140 days every other year and then return home to work in the communities they represent. But while that may limit the power of the state government, it also blurs the line between public responsibilities and private interests. And thanks to weak disclosure rules, voters are often clueless about the conflicts of interest that result.

At the Capitol, lawmakers rarely recuse themselves from legislation that has an impact on their livelihoods for one simple reason: They don’t have to. They are asked to step away from the action only if it directly affects their own company. So insurance agents can pass bills for the whole industry, and pharmacists can carry drug bills that cover other pharmacists. But when it comes to a lawmaker being so closely tied to his industry, perhaps no one is as prominent as John Carona.

*****

Mandatory HOAs took off in the early 1970s as entire neighborhoods sprang up from old cotton fields and pastures in suburban areas. Today, an incredible four out of every five new homes in metropolitan areas are built in association-ruled communities. In Texas, whose population is growing at about 3 percent a year, people buying new homes are more and more likely to settle in places like Las Colinas, New Territory or Circle C Ranch than in urban Dallas, Houston or Austin.

Typically homeowners have very little interaction with their HOAs: They pay their annual fee (Riggs’ is $336, though other associations’ can reach far beyond that), and they don’t give much thought to the work that goes on behind the scenes to maintain the neighborhood. Unless HOAs are ruled by power-drunk board members or nickel-and-diming management companies, most residents are pleased with them — and don’t have to worry that their neighbor will paint his house pink or leave a rusty car on blocks out in the front yard.

From time to time, however, abuses by HOAs grab the spotlight. Like when Jim Greenwood of Frisco was told in 2009 that he could park a Cadillac Escalade but not his Ford F-150 pickup in his driveway. Or when Michael Clauer, also from Frisco, had his home foreclosed on by his HOA in 2008 while serving in Iraq. Then there was the case of 82-year-old Wenonah Blevins, a Houston widow whose home got auctioned off for $5,000 in 2001 to satisfy an HOA assessment debt of $814.50.

HOA executives like Carona often say people choose where to live, and if they don’t like HOAs, they can move to a neighborhood that doesn’t have one. The fact is, HOAs are getting harder and harder to avoid. In developments like Brookfield, everyone has to join and pay their dues. That’s the norm these days. Moreover, a homeowner with an HOA may find himself locked into a web of services he has little choice but to accept.

What Carona figured out with his first association is still true today: HOAs are a low-margin business — the grocery stores of property management. The real money comes with volume, economies of scale and add-on services. That’s why Associa sits atop an ever-expanding pyramid of companies that Carona has created to cash in on all the ancillary services his HOA clients need: an insurance agency selling liability and property casualty policies, a document-production company that provides the records needed when homes are bought or sold, a 24-hour maintenance service for house repairs and upgrades and a collections company that targets delinquent homeowners.

Technically speaking, only residents are allowed to run neighborhood associations, by serving on volunteer boards of directors, but that’s true only in the purest of legal terms. As a practical matter, management companies run the day-to-day operations for the boards. They enforce the deed restrictions, interact with the homeowners, operate the websites, hire the contractors (which may be a subsidiary of the management company) and, most important, control the money.

“Everybody always professes that the board of directors is responsible for all affairs, but the reality is, the management company has tremendous influence,” said Mike Parades, a former HOA management company owner who teaches best HOA practices at the Community Associations Institute. “If they have the management contract, for all intents and purposes they are the ones who are calling the shots.”

If there’s any confusion about who the gatekeeper is at Brookfield, Associa clears it up for homeowners on the association website: “Your Board of Directors can only be reached through your Community Manager.” I tried to get answers about Riggs’ foreclosure case from Associa, which is known in Central Texas as Alliance Association Management. But it deferred to the Brookfield board. When I got Brookfield president Brooks Rowell on the phone, he called himself a “volunteer” and then hung up on me. In a subsequent call, he told me that if I had any questions about Riggs’ case or Associa, I should contact his attorney in San Antonio. So I tried that too. The answer? No comment.

Riggs didn’t have anything against HOAs when he moved into Brookfield. He had had a good experience with a tiny one in San Antonio, where he knew his neighbors and the management company didn’t send people out in golf carts looking for violations or mail out computer-generated notices.

It’s these types of violations that lead to most of the grievances against HOAs. Taking down a tree without approval, even a dead one, can get you in serious trouble in some association-ruled neighborhoods. So can staining your fence the wrong color. One Associa-managed HOA in California even fines its residents for the transgressions of others. If a pizza delivery boy gets caught speeding on his way to your home in Sun City Shadow Hills, he doesn’t get the $50 ticket — you do.

There’s also the “priority of payments” scheme, which allows HOAs to take the dues they collect from homeowners and redirect them to pay any outstanding fines, attorneys’ fees and “administrative” charges that the HOAs tack on for themselves. In that situation, dues generally come dead last, and homeowners inevitably fall further and further behind in their accounts. That, in turn, triggers another round of penalties, which results in additional fees. This is precisely what happened to Riggs: He continued to pay his dues, but they were being directed to his fines instead of his principal balance. In short order, a measly little fine became a financial headache, and he was faced with two bad choices: fork over the money or face expensive legal bills and uncertain odds in court.

How is any of this legal, you might ask? Start with Senate Bill 507, Carona’s bill from the 2001 session. It guaranteed that the HOA industry could keep wielding its foreclosure powers over homeowners — with no oversight from any state agency or elected official.

*****

Texas has a long and colorful history of lopsided special-interest influence. LBJ biographer Robert Caro, writing about the legislatures of the early 1900’s in his book Path to Power, found that lobbyists “dispensed ‘beefsteak, bourbon and blondes’ so liberally that some descriptions of turn-of-the-century legislative sessions read like descriptions of one long orgy.” In some cases, lobbyists could even be found casting votes on the floor in the place of absent lawmakers.

Occasionally the behavior has gotten the attention of law enforcement, as it did during the Sharpstown scandal of the early 1970s, when politicians were accused of passing favorable banking regulations in exchange for quick stock profits. Twenty years later House Speaker Gib Lewis, a Democrat from Fort Worth who was constantly hounded for his cozy ties with special-interest lobbyists, pleaded no contest to two misdemeanor violations after being accused of accepting an illegal gift. He left office at the next available opportunity.

The Texas Ethics Commission was created in the early 1990s to fix that culture. But it’s been called a paper tiger because lawmakers intentionally restricted it from biting them too hard — and the ethics laws were weak to begin with anyway. Despite Lewis’ problems, no one accused him of doing anything illegal when he stocked his ranches with wild game and fish at state expense, courtesy of Texas Parks and Wildlife. That’s because it wasn’t.

In the current Legislature, those kinds of breaches have become increasingly rare, but there are still gray areas. In the 2011 legislative session, Houston Republican Gary Elkins earned infamy for his objections on the House floor to new legislation that would regulate the payday lending industry. His occupation? Payday lender.

Today the longest-serving member of the Texas Senate, Democrat John Whitmire, of Houston, works for the government affairs section of a law firm that represents special interests seeking favors from the Legislature. The senator says his paycheck, which, incidentally, he doesn’t have to disclose, has nothing to do with his senatorial duties. With the blessing of the Ethics Commission, the senator, known as Boogie, is also tapping his fat campaign account — the largest among legislators — to enjoy perks such as nearly $300,000 worth of tickets to sporting events in the name of “constituent entertainment” and an $80,000 BMW 650i.

Stick around long enough and the ridiculously low state salaries for lawmakers don’t seem so unreasonable. Longtime Sen. Rodney Ellis, a Democrat from Houston who has made a lot of money (and faced some criticism) underwriting bonds for local government agencies, loves to tell people why he will never trade his Texas gig for one in Washington, D.C., where the elected representatives make $174,000 a year but are heavily restricted on outside work. “I can’t afford the pay cut,” he says.

When one of the most basic elements of transparency — a legislator’s income — often remains cloaked in secrecy, how can voters have faith in the process? For example, Sen. Judith Zaffirini, a Democrat from Laredo, simply checks the “self-employed” box and lists her occupation as “communications consultant” on her annual personal financial statement. Nowhere does it say that one of her clients is Carona’s very own Associa. Neither Zaffirini nor Carona will say how much she’s being paid or for how long. The beauty for them is that they don’t have to — and probably never will, since proposals for even the barest improvements, such as publishing the personal financial statements online, are about as popular as special sessions in the Legislature.

But even among these lawmakers, Carona stands out. By his own estimation, Associa employs 8,800 people and remains the largest and most active business operated by a member of the Legislature. Given the nature of his business, Carona has an impact on the lives of people far outside his Senate district because he sits at the top of the food chain for the 2 million or more people living under the rules of the privatized governments Associa helps operate. No other state legislator has that kind of power. He is a senator and a special-interest group rolled into one.

“He’s got to be number one in that category,” said former state Sen. Jon Lindsay, a Houston Republican. “I can’t think of anybody who serves in the Senate who has so much vested interest.”

*****

Carona was born on the Gulf Coast, near the town of Dickinson, and raised in East Dallas. By the age of 12 he was making $100 a day mowing lawns every summer — more than his stepdad, a hard-drinking butcher, made cutting meat. Democrats dominated the state the whole time he was growing up, but in 1978, the year he graduated from the University of Texas business school with a double major in real estate and insurance, a Dallas oilman named Bill Clements broke the stranglehold and became the first Republican to get elected governor since Reconstruction. Two years later, Ronald Reagan was elected president of the United States.

By then, a Dallas developer had hired Carona to manage HOAs, which were just beginning to multiply around Texas. As business took off, Carona, a free-market-loving entrepreneur, threw himself into the conservative political movement, first on behalf of others and then with his own successful candidacy for the state House of Representatives, in 1990, when he was 34 years old. Six years later he ran for the Texas Senate, and he’s been there ever since.

Politically, he has the qualities you’d expect from a tough, ambitious self-made man. At a time when most politicians live in fear of their party’s activist fringe, Carona seems to gleefully confront it. On issue after issue, he’s proved himself to be a maverick willing to buck his own party on everything from gay rights to higher gas taxes. But he also has a reputation for jealously protecting his company’s bottom line and the interests of the big-business lobby in general.

He’s known to have a volcanic temper too. Just ask Sen. Royce West, a Democrat from Dallas who was the recipient of a notorious finger jab from Carona on the floor of the Senate in 2001. Or Sen. Dan Patrick, a Republican from Houston who found himself on the business end of a Carona tirade over a minor legislative disagreement. Carona, who is proud of his Italian heritage and has been known to make Godfather references, later wrapped a toy horse head in a blanket and put it on Patrick’s desk on the floor of the Senate. (In a bitter email exchange in May 2012 Carona suggested that there were rumors that Patrick is gay. The religious conservative and radio talk show host called the attack a false and “repulsive” smear and demanded an apology, which was not provided.)

These qualities were in evidence during the fight over SB 507 in 2001. The legislation didn’t just tweak existing laws. It created a brand-new section of the Texas Property Code that dealt with HOA powers and duties, everything from the way foreclosures and liens are handled to record-keeping and management. Carona says his carrying the bill did not violate any ethical rules pertaining to conflicts of interest — rules he acknowledges are “loose.” To the contrary, he insists that SB 507 was a pro-consumer bill, thanks to provisions that gave homeowners the right to redeem foreclosed homes, to review certain HOA records and to receive notice when a fine has been levied against them.

“That bill was all about protecting homeowners,” Carona told me. “It truly provided all sorts of transparency and individual rights to homeowners who had been largely shut out of the process by some of these runaway boards of directors.”

Talk to the many homeowner activists and attorneys who have spent the past decade suing HOAs on behalf of people like Shawn Riggs, however, and you’ll get a different view. (Lawsuits against HOAs are common, in part because, with no state agency overseeing HOAs and no licensing requirements, homeowners have little option but to sue when they get into a dispute.) According to its critics, the law seemed to stack the deck — in the name of consumer protection — in favor of HOAs and their for-profit partners. Look no further than the language concerning the priority-of-payments practice. The bill said HOAs could not foreclose “solely” to collect fines and attorneys’ fees, but it enabled managers to redirect dues payments to cover them. So the effect was the same: Diversions technically left the dues unpaid, allowing the HOA to foreclose — even after tacking on thousands of dollars in arbitrary administrative penalties, handling charges and attorneys’ fees.

Lawmakers generally pretend their colleagues have no personal ties to the bills they sponsor, but on the night SB 507 came up for a final vote, Lindsay departed from tradition by pressing Carona to discuss how management companies like Associa operate.

“That’s not anything we’re gonna discuss on the Senate floor,” Carona replied. “We’re talking about a homeowners’ protection act here, the obligations that a homeowner has to their homeowners’ association. We’re not talking about anything else.”

Lindsay scoffed. “If this bill doesn’t have anything to do with management [companies], I’m kind of blown away by some of the correspondence I got, all from management companies,” he said. In fact, Carona’s bill referred to HOA managers repeatedly, giving them joint control over an association’s bank account, among other things.

Lindsay was so incensed about the lack of consumer protections in the bill that he vowed to stage a filibuster to kill it. Since only a few hours remained before a midnight deadline on the last day to pass substantive bills, this was not an idle threat. As the night wore on, Lindsay kept talking and talking and Carona kept getting more and more agitated. Carona implored his GOP colleague to recognize that SB 507 was at least marginally better than the messy patchwork of laws that had prompted so many complaints at the Capitol. Lindsay acknowledged that homeowners were thrown a couple of bones, but he complained about his exclusion from a hand-picked team of legislative negotiators, which naturally included the bill’s author, who had stripped off homeowner-friendly amendments in the waning days of the session.

More important, Lindsay said he was worried — prophetically, as it turned out — that the industry would use the “property rights” bill as a fig leaf to cover up the need for deep consumer protections, actual remedies and oversight. “What I’m fearful of is that taking that small step in that direction now will prevent us in two years from taking a major step in the right direction to rein them in,” Lindsay said. “Because everybody will say in two years, ‘Oh, we took care of that last session.’ ”

With the clock inching toward the midnight deadline, Carona fell into a charitable mood. He offered to advocate for new reforms if the ones he was on the verge of passing proved inadequate and in need of some amending. Finally, at about 10:20 p.m., Lindsay relented. In the aftermath, Carona looked like a new father in a maternity waiting room. “Thank you very much,” he said. Carona then pledged to work with Lindsay on HOA issues in the next legislative session, presumably as an agent of reform.

Lindsay’s response wasn’t meant for broadcast, as a review of the old videotapes makes clear. But if you crank up the volume, you can hear it. “I don’t want you carrying the goddamn bill,” he said. Carona promised he wouldn’t. Then he sent SB 507 on its way.

True to his word, Carona didn’t carry the 2003 HOA bill. In fact, because of all the conflict-of-interest criticisms he faced — unwarranted, he still believes — the Dallas senator decided he shouldn’t be directly sponsoring HOA bills anymore. But that doesn’t mean he stopped advocating for his company’s interests at the Capitol. When Lindsay fulfilled his promise in 2003 to spearhead sweeping HOA reforms — including government oversight of HOAs in big counties and a limit on management company fees, none of which the management companies liked — Associa dispatched droves of employees to Austin to testify against it, recalls Gary Stone, a former property manager for a Dallas-based Associa subsidiary.

Stone says he and other employees were told to use the names of their nonprofit neighborhood associations when they registered in opposition to Lindsay’s bill, though some did disclose their management company’s affiliation, according to committee witness records. “We went down in a big van. We were told this was very important and that if we could get away we needed to go, because Carona was against it,” said Stone.

Some of Carona’s methods were more direct. On the day Lindsay was scheduled to lay out his bill before the committee, Carona dropped by the hearing room. On a scratchy audio recording of the proceedings, an audible stir can be detected following his entrance, and an unidentified lawmaker says, “Mr. Chairman, I want it noted that Senator Carona is in the house, so all amendments and all amendments to amendments and committee substitutes, beware.” They all had a good chuckle. It was no secret that Carona didn’t like the bill and was working to scuttle it. Ultimately, he prevailed. Lindsay’s legislation died without a vote.

Over the ensuing years, Carona has continued to expand his HOA advocacy network, adapting and innovating just like he has with his business empire. In 2006, for example, the Associa brass helped create the now-defunct Communities for Fair Legislation, an innocuous-sounding group formed to lobby at the Capitol on behalf of HOA management companies, according to those who helped create it.

After that, Carona took it in-house by lining up a team of his own registered lobbyists. There are now eight in all, including several from the influential Graydon Group, whom Associa pays to watch its back and promote its agenda in Austin. A senator hiring lobbyists to influence his own colleagues? Even in a Capitol accustomed to cozy legislator-lobbyist ties, that’s a new twist.

There are also simpler methods. In 2011 West, then the chairman of the Committee on Intergovernmental Relations, carried the most significant HOA overhaul since SB 507. West also happens to be the recipient of $73,500 in campaign cash donated since 2008 by Carona, his wife and Associa general counsel Paul Reyes. The most amazing thing about this may be Carona’s forthrightness in discussing it.

“Just as any lobbyist or any special interest would approach a legislator, our company’s interests are protected in that fashion,” Carona told me. “As a company, we have to be able to know that Senator West is somebody who will at least listen.”

It’s a little jarring to hear a senator liken himself to a special interest. Then again, it’s hard to argue with his cold-eyed calculation. One can only imagine that $70,000 endears one senator to another better than a chest-poking tirade on the Senate floor.

*****

Carona has been described as a man in constant motion, and on the March day that I interviewed him, I discovered he has a Capitol office to match. When I walked inside, one lobbyist was dropping off a bag full of snacks and three others were waiting to talk to the senator. While staffers answered phones and made small talk, a visibly antsy Elkins, the payday lender and Houston state representative, stormed in and joined us. Carona was carrying a hotly disputed bill to restrict high-interest payday lenders, and Elkins was upset about a draft of the legislation. There were no seats left, so he had to lean against the wall next to me.

When my turn came, Carona welcomed me in and hurriedly returned to the chair behind his desk. Wearing a charcoal suit and a starched monogrammed shirt, he seemed unreasonably relaxed amid the chaos. He asked me how much time I needed. A half hour? Forty-five minutes? I took the longer option, but he ended up giving me two hours.

He was unfailingly courteous, generally talkative and often surprisingly blunt. When I asked him why he once turned to Democratic trial lawyers like the late Fred Baron or John Eddie Williams for investment capital at Associa, he stated matter-of-factly, “I’m looking for people with money.”

He was less forthcoming, though, when pressed about the inner workings of his vast business empire. On that very day, a major cog in his HOA machine —Dallas-based First Associations Bank — had gotten state approval to complete its merger agreement with the publicly traded Pacific Premier Bancorp Inc., of California. The transaction provided a rare glimpse into an important piece of the senator’s otherwise privately held conglomerate. As the largest shareholder in First Associations Bank, Carona was entitled to receive approximately $8 million in cash and stock for the transaction, plus a $2,750-a-month spot on Pacific Premier’s board, according to federal disclosures. (Democratic fundraiser and lawyer Lisa Blue Baron, Fred Baron’s widow, was also listed as a major shareholder.) Carona, who has oversight authority over the Texas Department of Banking in the Legislature, insisted the deal got approved without his input or influence, but he declined to talk about what he got out of it.

Only once during our interview did Carona show any sign of his trademark anger. It happened when I asked him about reports from former Associa company employees that he sometimes treats company assets as if they were his own, whether it’s the corporate jet he uses to ferry himself between Austin and Dallas, often multiple times per week, or the leased warehouse near Love Field where he keeps his cherished vintage-car collection. “Those are issues that pertain to my business interests and my personal interests, and frankly, I think it’s out of line for a political reporter to be digging into any issue of that nature,” he said.

What Carona did reveal were his views on HOA power and the effort to dial it back, including the 2011 reforms that finally gave homeowners some of what they’d been fighting for: the elimination of quickie “non-judicial” foreclosures in single-family HOAs (though not those for condos), an enhanced right to inspect association records and better disclosure of fees.

The 2011 law, to Carona’s chagrin, also closed the priority-of-payments loophole for single-family HOAs for all transactions as of Jan. 1, 2012. Now dues have to be applied to the annual HOA fee. No more diverting to fines and other charges.

While Carona thought the reforms struck a fair balance overall, he felt pretty strongly that the ban on reapplying assessment payments eliminated a reasonable tool to force “irresponsible” homeowners to pay their tab.

“I think what we did in that one regard was not best for the associations,” he said. “The public opinion just overrode any other consideration.”

But he’s not pouting about it. Carona looks at the legislative process kind of the way he looks at business. You don’t get everything you want; you cut deals and move on. In the case of the 2011 legislation, Carona had his lobbyists on it. He made contributions to the Senate author. And on the rare occasions when West asked him what he thought about a tweak here and there, Carona said he made his opinions known. What more can a senator and CEO do?

“The only real time you ever hear us complain is if we simply didn’t get an opportunity to at least be heard,” Carona said.

Given Associa’s national reach, I asked Carona how he approaches other state legislatures, where he doesn’t have a fancy title, about HOA issues. In addition to hiring A-list lobbyists, his company runs Associa PAC, a Texas-based political action committee that doles out bipartisan campaign contributions to sympathetic lawmakers all over the nation. It shouldn’t come as a shock that legislators with influence over HOA issues, in Texas and beyond, are on the distribution list.

“We have certainly impacted the laws around the country. There’s no question we have impacted them,” Carona said. “We actually work to help pass good legislation.”

What stood out the most to me was that Carona, unlike so many of his colleagues, doesn’t pretend as though his public and professional lives never intersect. He says he hasn’t ever abused his position or violated ethics laws, but he’s up front about how he works the system for his own benefit within those very forgiving restraints.

“I feel like I have a right to protect my business interests,” he told me. “Part of my job for my clients, which are the associations and their members, is to come down here and try to stand in the way of legislation, some of which is rather impulsive.” You might call that refreshingly candid. Or fantastically tone-deaf.

In Texas, as the Godfather might say, it’s just business.

*****

Right about the time the Legislature was putting the finishing touches on those heavily negotiated HOA reforms, Shawn Riggs, who lives 23 miles from the Capitol, was getting the notices about his lawn from Carona’s management company.

Unfortunately for Riggs, the hard-fought deal on the diversions of dues came too late. His case falls under the old law, so the fees kept piling up, and the pressure to resolve it kept mounting as the stakes increased. I didn’t expect Carona to know the details of the Riggs case, of course. Riggs is but one of at least 2 million Associa homeowners. A number. But wasn’t there something the senator could do? “I would be happy to track it down and get it fixed,” he told me.

It seemed promising. Though Riggs was technically suing Brookfield and not Associa, if anyone could just make this mess go away, it was Carona. But after our interview, the Riggs case started grinding its way through the court system. Soon the Brookfield insurance company’s lawyer got involved. A settlement offer from Riggs came and went. And still no word from Associa. Pretrial sparring was just around the corner.

Then, in early May — out of the blue, it seemed to Riggs — Associa intervened and started openly pushing for closure. Riggs’ lawyer, J. Patrick Sutton, had never seen a settlement deal brought to a client by a company he had not sued, but it was an offer they couldn’t refuse.

Riggs was not able to discuss the terms of the settlement, but it gives him a fresh start with a neighborhood association he had come to loathe. For a while he was so disgusted with Brookfield that he couldn’t wait to move out. Not anymore. “Now I feel like I have a responsibility to take action,” he said. “I feel committed to my neighbors to make things better — instead of just running.” The fear of losing his home woke him up to the power of HOAs. The outcome of his lawsuit made him feel empowered to do something about it. For that, at least, he has John Carona to thank.

Retirees Have Carona's Company in Crosshairs

by Jay Root

Published on May 21, 2013

INDIO, Calif. — The slick brochure advertising homes in the Sun City Shadow Hills neighborhood near Palm Springs has escapist senior fantasy written all over it.

“Get Ready For The Next Great Chapter Of Your Life,” it says.

On the cover, a lush green expanse of golf course fairway cuts through two shimmering lakes and ends at what looks like a Spanish village, where uniform clay roofs sit on top of white building facades, offering a perfect color transition between the Bermuda grass in the foreground and the desert mountain landscape behind it.

But there is trouble beneath the utopic veneer: Many of the 55-and-up "active adults" who live here have become disillusioned with the homeowners association and the property managers who run it. They worry about how their nearly $9 million in annual dues money is being spent, complain about financial conflicts of interest, and say they collectively are getting gouged by fees and fines without the kind of transparency or due process one would expect from a government agency with similar responsibilities.

Like most new developments in U.S. metropolitan areas, Shadow Hills is governed by a private homeowners association, and membership is not optional. To live here, you must become a member, pay $237 a month in dues and abide by a lengthy and sometimes onerous set of rules. One that has been generating controversy of late is the “Conduct Code” section of the association’s rules and regulations. It says homeowners are responsible for the actions of friends, visitors and even vendors.

That was the policy the HOA cited to Carolyn Little when she was issued a $50 speeding ticket, even though it wasn’t her car and she wasn’t driving. It was a Home Depot carpet installer who got caught by the association’s private police force for driving seven miles over the 35 mph speed limit down Sun City Boulevard. Little, 71, said she just happened to be the first homeowner expecting a visit from Home Depot that day — and it was her address that the driver gave the guard when he checked in at the front gate.

“They want their money and they don’t care if it’s at the resident’s expense,” she said. “We like it here. It’s just that these rules are crazy.”

The dissidents say complaints about heavy-handed rules fall on deaf ears in Shadow Hills: The association recently authorized the purchase of another radar gun — evidence, as they see it, that the property managers are looking out for their bottom line and not the best interests of the homeowners.

While the Sun City Shadow Hills Community Association was organized as a nonprofit dedicated to the protection of the neighborhood and its residents, it is run by a for-profit management company. With a budget of about $10 million a year, it’s not unlike running a medium-sized business.

In this case the task falls to Professional Community Management, or PCM, a subsidiary of Associa, the largest HOA management company in the United States. The company’s founder and CEO is state Sen. John Carona, R-Dallas, chairman of the powerful Senate Committee on Business and Commerce and architect of Chapter 209 of the Texas Property Code — the section dealing with single-family HOAs.

Associa bought PCM, one of the largest property management firms in Southern California, in 2010, marking a decade of acquisitions by the privately held company. In 2000, Carona listed just five companies in which he reported ownership or executive oversight on financial disclosures Texas elected officials must provide. By 2011, the figure had ballooned to more than 120 companies.

A dizzying number of acquisitions and spinoffs has turned Associa into an HOA management behemoth. The company now operates in 31 U.S. states, plus several locations in Canada and Mexico. It also has created numerous subsidiary businesses to cash in on the growing HOA market and to become what Carona calls “a one stop service opportunity” benefiting both his company and his customers.

Carona was not familiar with the specific concerns from Shadow Hills, one of more than 9,000 associations Associa manages, but he said complaints from homeowners generally come from a vocal minority: “In the service business you're only going to hear from the people with problems,” he said. Associa spokeswoman Carol Piering referred questions about dealings with homeowners to the volunteer board that is legally charged with overseeing the affairs of the estimated 5,400 residents living in Shadow Hills.

“With a community this large, it is not uncommon to have a variety of viewpoints that create a dialogue that would contribute to the board making informed decisions for the common interest of all of the residents,” she said.

Repeated requests from The Texas Tribune for interviews or answers to specific questions from board members were either ignored or turned down.

Carved from the picturesque Coachella Valley, Shadow Hills offers all the amenities one might expect in an upscale retirement community: two 18-hole golf courses, tennis courts, indoor and outdoor pools, a bar, a restaurant and even an amphitheater. On a recent visit to the massive Montecito clubhouse and recreation center, 60- and 70-somethings could be seen playing bridge and mahjong (a card game), lifting weights, loosening up with water aerobics and, in one pulsating room, taking a Zumba dance class.

“Baila! Baila! Sabor!” the music blared.

Only senior citizens are allowed to live in Shadow Hills, so most people came here to retire or to spend their winter months in the warm desert climate. Tangling with the HOA board, generally speaking, wasn’t on the to-do list.

“I don’t think any of us were doing anything more than buying a house and in some cases buying into a lifestyle,” said Martin Stone, 63, a former bankruptcy lawyer who moved here two years ago after a heart attack sidelined his career. “I don’t think any of us thought we were buying shares in a private government and that it was then going to seek to exercise this level of control over our lives.”

The first rumblings of discontent were felt in late 2011 when the Shadows Restaurant was temporarily shut down for a kitchen remodel few knew about. At first the complaints were confined to an inquisitive group of seniors who were easily dismissed by the board as troublemakers with too much time on their hands and too many pesky questions.

Then the board awarded PCM-Associa an additional $3,000-a-month contract, effective Jan. 1, 2012, to manage Shadows Restaurant and revealed plans for a large expansion, even though it had been losing tens of thousands of dollars a month.

Soon it was announced that residents who wanted catering services for events held at Shadow Hills facilities could henceforth contract with Shadows Restaurant or face a 20 percent surcharge on the gross price of any outside service provider, or $200, whichever is higher. Given the reputation of the food at Shadows, which appears to be in no danger of winning any culinary awards or turning a profit, the board won few friends with that edict.

Residents say things reached a boiling point in early 2012, after the board held a raucous town hall meeting to discuss plans to expand the money-hemorrhaging restaurant. The board subsequently appointed an Associa subsidiary employee, Jerald Cavoretto, to fill a vacancy on its board of directors, which fueled more criticism about PCM-Associa’s influence over the nonprofit board. Cavoretto was later elected to a full two-year term.

All board members must live in Shadow Hills, but having financial ties to the management company is allowed, and the board president said in a written statement at the time that Cavoretto’s work in association management infused him with “concrete knowledge” of HOA duties.

Cavoretto, who serves as board treasurer, said in an email that he recuses himself from voting on any issue related to PCM-Associa "or any other issue which I feel would present a conflict."

For critics, the permissive ethics rule sits atop a pile of complaints about PCM-Associa and the Shadow Hills board, which they say has been too cozy with the management company and unreasonably slow in providing the financial documents to which they believe they are entitled.

Ronald Bob Marley, a CPA for more than 50 years and former president and CEO of Baskin-Robbins, said he moved to Shadow Hills to live out his golden years in peace. But after the restaurant controversy exploded, he threw in with the graying revolutionaries.

Marley, 82, said in all of his years in the business world he had “never seen such a one-sided contract” as the one PCM-Associa signed with the association. The company is paid about $145,000 a year in management fees, figures from association financial records indicate. Marley estimates the association is also paying $3 million a year to Associa for payroll, and association records show that includes a processing fee of 5 percent — which is above and beyond the management fee — and a variety of tack-on charges.

Marley and other critics are upset that PCM-Associa is also advancing itself large sums each month, without formal invoices, to cover payroll costs. They liken the payments to a revolving zero-interest loan.

“They’re using our money to finance their business,” Marley said. In emails exchanged with one dissident homeowner, board members defended the payroll advances, saying they are authorized and reconciled monthly to reflect actual costs — which are sometimes higher than the advances.

Shadow Hills is not the only common interest development where homeowners have complained about a lack of transparency and overly warm contractor ties with governing boards. That’s a common refrain across the industry, said Mike Parades, former owner of an HOA management company and instructor of best management practices at the Community Associations Institute, the chief lobby and education group for HOA interests.

While it’s generally a low-profit business, large “mega-management” companies like Associa rack up profits by selling ancillary services to a captive audience, Parades said. He said in many cases the associations often have no idea that their management company has ties to everything from the maintenance contractors to insurance and even banking services.

“They are a big business and they are all run by a volunteer board of directors that may or may not understand what the hell they’re doing,” Parades said. “That’s kind of scary, isn’t it?”

Carona said Associa managers always disclose the company’s links to subsidiaries, presenting itself as a turn-key operation with a long list of affiliated contractors.

“We don't ever go and represent ourselves as just a management firm. From day one we represent ourselves as a management and lifestyle services firm,” he said. “We show our full array of offerings but clients are always free to pick and choose from  what they want and what they don't want.”

However, Carona also said in mid-March that Associa’s ownership of Dallas-based Associations Insurance Agency Inc. was disclosed on AIAI’s website. It was not. After the Tribune asked about it, the Associa parentage was disclosed under an “About Us” blurb. Parades said the CAI code of ethics, which he helped draft, requires more than that, though. He says management companies must provide associations with written disclosures of any actual or perceived conflicts of interests, including ownership of any companies providing ancillary services.

According to interviews and published reports, board members repeatedly have said they were unaware of Associa’s links to subsidiaries and affiliates, including AIAI, founded and owned by Associa.

Linda Jeter, president of the board of the Silvermill Homeowners Association in Katy from 2008 to 2010, said she and fellow members did not know that Associa affiliates had quietly gotten in the banking and insurance business, for example.

“They did switch our accounts over to the Associa bank and the Associa insurance without ever saying anything about it,” she said. “We didn’t really pay any attention to it.”

The board fired Associa after complaining of poor service and unresponsiveness, but it had nothing to do with directing any business toward affiliated vendors, she said.

(Carona was the co-founder and largest shareholder of Dallas-based First Associations Bank, which specialized in HOA accounts; the bank was sold earlier this year to California-based Pacific Premier Bancorp Inc., which made Carona a director and retained its depository services agreement with Associa, according to Securities and Exchange Commission disclosures.)

Gary Stone, a former Associa subsidiary manager in Dallas, says it’s no coincidence boards often have no idea that an Associa-owned company is producing the insurance policy that an association is required to have.

When it came to discussing the sale of AIAI coverage to HOA boards, his managers were expected not to mention the ownership and to “just tell ‘em they’re good policies,” Stone said.

“I would have to go the board and say, 'Look, now it’s insurance time,' and ‘Oh look, we’ve got a new insurance company that we can use,’” Stone said. “It just happened to be Carona’s.”

Carona told the Tribune that there probably are times when “we push a little hard” to sell add-on products but he said the company’s policy is to disclose ownership ties and he insisted the bundled services are “good for the client.”

“Nothing that we’ve ever proposed that I’m aware of in terms of ancillary services has ever been any higher than the market rate,” he said.

(Whether the insurance policies are a bargain or not is a subject of dispute. Carona says AIAI never intends to sell insurance to associations unless it’s the lowest bidder. But critics say Associa stacks the bidding process in its favor and sells questionable “master program” policies that don’t provide adequate coverage of risk).

The laws impacting association-ruled communities vary from state to state. But people who live in them willingly sign contracts binding them to some pre-determined conformity. Those who break the rules or quit paying their dues — the private contractual version of a property tax — face penalties or even foreclosure, because otherwise their neighbors would have to endure their nuisances or pay their share of the assessment load.

With almost a fifth of the U.S. population living in HOA-governed communities, “you’re going to have problems,” said CAI spokesman Frank Rathbun. But he said polls commissioned by the CAI routinely show 70 percent or more of the people who live in them are happy with their HOA.

“What politician wouldn’t love that kind of approval rating?” Rathbun said.

The problem is that when things go south, like it has for many of the residents of Shadow Hills, generally the only options are to sue, a costly and uncertain venture, or to eject the board in an election — which can be harder than it sounds. In Shadow Hills and other HOA-ruled communities, developers control the votes of unoccupied houses, so until a subdivision is fully occupied they retain major influence over board seats.

And unlike a typical town square, the common areas of Shadow Hills are private property, so the normal tools of democracy aren’t always readily available to those who want to change the system. When a group of dissatisfied residents asked for the board’s permission to form a club and use a conference room in the clubhouse in which to gather and discuss their concerns, for example, they were turned down on the grounds that a similar group already existed. The management company also controls the website and the monthly magazine, The View, whose pages read as if no one has ever complained about anything at Shadow Hills. Even planting yard signs or distributing flyers in residents’ mailboxes must meet approval of the association, the dissidents say.

Martin Stone, the former bankruptcy lawyer and Shadow Hills rabble rouser (no relation to Gary Stone of Dallas), recently had his rights to the common areas suspended after the association said his swamp cooler violated strict architectural design protocols. He claims they even deactivated the transponder on his car — so he can’t automatically open the front gate of the neighborhood from his car when he comes and goes.

Living under the current board rules “has all the evils of a monarchy with none of the benefits of noblesse oblige,” Stone fumed.

The dissidents discussed filing a lawsuit against the HOA but say they don’t want to go that route. Instead, they are throwing their energy into the upcoming 2014 spring board elections — the first in which residents expect there will be no developer-backed candidates. Stone and other critics, including former Deloitte accountant Gaelyn Lakin, say the rebellion has morphed into a full-fledged opposition movement, and they believe they have a good shot at electing neighborhood leaders who will better represent their interests, throw open the books and strike a better management deal than the one they say never should have been given to PCM-Associa.

That day can’t come soon enough for Lakin.

“I’m ready to move back to the United States,” she said.

A Green Light for Lawmakers' Pension Hikes, Double Dipping

by Jay Root

Published on May 21, 2013

Updated May 21, 11:30 a.m.:

During the third reading of Senate Bill 1459 on Tuesday, state Rep. Jason Isaac, R-Dripping Springs, attempted again to add a measure delinking legislators' pensions from judges' pay. His proposal would have linked only legislators' pay to the salary of the governor, instead.

Lawmakers in the House, though, seemed less pleased than Monday, when his proposal received a chilly reception. State Reps. Sylvester Turner, D-Houston, and Rep. Roberto Alonzo, D-Dallas, suggested that if Isaac did not want to accept the pension, he could choose not to participate.

"If there is a representative on the floor who does not believe they are not working and doing an excellent job that is deserving of pension and retirement, they should voluntarily opt out," Turner said.

Before lawmakers gave final approval to SB 1459, they soundly rejected Isaac's amendment in a 101-32 vote.

Brandi Grissom contributed to this report.

Original story, May 20:

In the span of a few minutes on Monday, the Texas House gave the green light to pension increases for state elected officials and then watched the effort to ban “double dipping” by politicians crash and burn without a vote.

The measures were contained in two separate amendments to Senate Bill 1459, a pension overhaul bill designed to shore up the Employees Retirement System (ERS) of Texas.

“Clearly, people want to keep the system the way it is, and it’s probably not a great signal to the public,” said Rep. Chris Turner, D-Grand Prairie, author of the double dipping amendment, which he withdrew.

An amendment by Rep. Jason Isaac, R-Dripping Springs, would have had the effect of denying a pension increase to members of the Legislature.

Lawmaker pensions are based on the salary of a state district judge, currently at $125,000 but set to rise in the budget to $140,000. That increase in turn would give all current and future retirees from the Legislature a pension hike.

Isaac’s amendment would have decoupled the two and would have instead tied lawmaker’s pensions to a percentage of the governor’s salary ($150,000), leaving the amount used to calculate a lawmaker’s pension at $125,000 as it is right now.

The House turned down the amendment on a vote of 84-59, thereby giving its collective blessing to the increase. Isaac said he felt dejected but also said some lawmakers would have a hard time defending their vote against his amendment come election time.

“We weren’t sent here for the pensions,” Isaac said. “I just don’t want to be seen as increasing the pension that I may or may not receive.” He said he did not want to vote for a budget that contains an increase in his own future pension income.

The practice of double dipping was brought to light during Gov. Rick Perry’s failed run for president. In late 2011, Perry revealed on federal disclosure forms that he had taken advantage of an unusual perk reserved exclusively for longtime state elected officials. It has allowed him to draw both his $150,000-a-year state salary and a $92,000 annual pension.

Turner’s standalone measure to remove that perk from the law, House Bill 413, had died in committee for lack of support, but he had vowed to try again with an amendment to legislation that was moving. However, at the urging of the House sponsor of the underlying pension reform bill, Rep. Bill Callegari, R-Houston, Turner decided to pull his amendment down without a vote Monday.

SB 1459, which Callegari sponsored, is designed to shore up the long-term viability of the state employee pension system by gradually increasing the state contribution rate and taking steps to strengthen the actuarial soundness of the system.

Turner deferred to Callegari, saying he was not “willing to risk” failure of the bill, with just a week left in the session, in order to pass the double-dipping ban.

So it's dead for the session.

“It will be the first bill I file in the next legislative session if I have the privilege of returning,” Turner said.

An Expensive Celebration, Courtesy of the Lobby

by Ross Ramsey

Published on May 22, 2013

A remarkably expensive meeting of a key legislative committee took place this week: a $22,000-plus affair at an upscale downtown Austin steakhouse for the 15-member House Calendars Committee.

That panel, which sets the daily lineup of bills for consideration in the House and thus holds life-or-death power over legislation, held its end-of-session dinner at Austin’s III Forks restaurant this past Sunday.

It cost $22,241.03 and required the use of 34 American Express cards, 11 MasterCards and 20 Visa cards. The committee chairman, state Rep. Todd Hunter, R-Corpus Christi, said there were about 140 people there, and most of them stayed for dinner.

Enlarge

Receipt for Calendars Committee Dinner, 5/19/13.

That’s an extraordinary amount of money, as these things go, but the events themselves are common. In a tradition that stretches back as far as anyone can remember, committees in the Texas Legislature throw self-congratulatory dinners to celebrate the completion of their work.

“It’s a large gathering,” Hunter said of the Calendars dinner. “All committees do it. I don’t know how people have done it in the past. I don’t even know the amount. We invite the committee and we invite their staffs, and then we involve lobbyists and outside folks. Some of them are not lobbyists. I don’t know who paid. You can go find out.”

It was an expensive celebration, but the legislators and staffers who attended didn’t pay for it. The supporters and lobbyists who have been trying to influence legislative outcomes since the session began in January covered the tab. And it’s completely legal, as Hunter pointed out, so long as the lobbyists paying the bills report their expenses where everybody can go see them. Ethics rules limit lobbyists from spending more than $500 on entertainment on a particular legislator, but that limit doesn’t apply to food and drink.

The Sunday affair for Calendars was one of several held by the various legislative committees working toward the close of the session next week. For instance, the House Appropriations Committee was meeting across town at Olive and June, another high-end restaurant. The Public Education Committee was at Moonshine, a nice restaurant next to the convention center. Two committees — Agriculture and Livestock, and Culture, Recreation and Tourism — were holding their dinners at Ranch 616, a place on the edge of downtown Austin. House Speaker Joe Straus, R-San Antonio, made the rounds, including a stop at III Forks, where he talked to attendees and left without eating.

"Speaker Straus has stopped by most committee dinners to show his appreciation for members' work this session,” said Jason Embry, a spokesman for Straus. “He briefly attended three committee dinners on Sunday but did not stay for dinner at any of them."

What is unusual about the Calendars dinner — other than costing the equivalent of a new car — is that the restaurant tab got passed around and talked about.

It wasn’t just a dinner; Hunter formally posted it as an official meeting, though he said he took care to commence the eating and drinking after the committee’s official work for the session was complete.

“I can tell you that we had some people there that probably did not have an interest in anything specifically, but wanted to meet people,” Hunter said. “But do people work the calendar? Absolutely.”

Sunday was an important date. Under House rules, it was the deadline to complete the final agenda of bills in the House for the 83rd regular legislative session. That’s the day the committee decided, once and for all, which bills would be eligible for consideration during the last week of the session and which ones would die without a vote from the full House.

The meeting was posted, just like any other legislative committee meeting. Calendars had a meeting posted for 5:45 p.m. Sunday in a Capitol committee room, and another posted for 6:30 p.m. at the restaurant. According to the minutes, they set this week’s bills for consideration at the first meeting.

Not all of the 121 people at the dinner — that number is based on the number of $95 “banquets” on the check — paid for their supper. Beverages ran another $6,580, plus tax and tip. Somebody had a glass of juice for $2.75; elsewhere in the room, the restaurant was serving 24 bottles of pinot noir, 24 bottles of chardonnay, 27 bottles of cabernet and seven bottles of sauvignon blanc, each priced at between $51 and $68. Another three bottles of cabernet — a nicer one, apparently — cost $135 each. That’s on top of a long list of mixed drinks and beers. If you’re keeping count, that’s 85 bottles for 140 people.

The full tab was $18,584.55 and after a 20 percent tip was added on, the total came to $22,241.03.

That’s $183.81 per person, but only 65 guests produced their wallets. They divvied the tab evenly, most of them paying $340.07. A handful varied from that amount, with the smallest tab coming in at $338.12 and the biggest landing at $478.07. Hunter said he didn’t pay and didn’t expect the members of his committee to do so, either.

“I’ve had committee dinners since I’ve been here for seven terms,” Hunter said, speaking in characteristically clipped phrases. “Lobby pays. They follow rules. Everybody knows up front. And we even post it, so we are all in compliance.”

Lawmaker Transparency Bills Got Little Traction

by Emily Ramshaw

Published on May 27, 2013

Lawmakers talked a big game about improving transparency this session, but when push came to shove, they did next to nothing to advance it.

Key proposals never even got close, like bills to strengthen reporting of lawmakers’ financial interests, prevent the quick revolving door that sends former legislators into the lobby, and stop the practice of allowing elected officials to draw down both their state salary and their pension.

Others got within spitting distance. As of Friday morning, a reform bill for the Texas Ethics Commission still carried amendments the House passed by wide margins to put lawmakers’ financial disclosure forms online, to require groups to report spending on a speaker’s race and to force lawmakers to disclose their contracts with government entities.

But House and Senate negotiators stripped those off in conference committee — even while they added provisions to keep more information, like their home addresses, private.

“Behind closed doors, the conferees mounted a strategic assault on transparency,” said Craig McDonald, director of the left-leaning money-in-politics group Texans for Public Justice. “The stage was set to make significant progress on ethics and open government reform. The true nature of the politicians reared its head at the last minute.”

Gov. Rick Perry hammered the nail into the coffin with his veto of Senate Bill 346, a measure that would’ve forced politically active nonprofits to disclose their donors.

Supporters hoped it would expose the anonymous donors to groups like Texans for Fiscal Responsibility, an organization run by conservative activist Michael Quinn Sullivan that has targeted the state’s establishment Republicans with email blasts and scoreboards.

In his veto, Perry argued that the measure would’ve had a chilling effect on donors to nonprofits — from Tea Party and civil rights groups to anti-abortion advocates — organized under section 501(c)(4) of the tax code.

“At a time when our federal government is assaulting the rights of Americans by using the tools of government to squelch dissent,” Perry wrote, “it is unconscionable to expose more Texans to the risk of such harassment, regardless of political, organizational or party affiliation.”

A couple of smaller-scale ethics advances are hanging to the omnibus Ethics Commission bill awaiting Perry’s signature, including a provision to require railroad commissioners to resign if they run for another office and another that would force those who post political ads online to disclose who’s paying for them. Lawmakers who become lobbyists would also have to wait two years before donating their leftover cash to sitting members by way of campaign contributions.

Lawmakers have also passed a separate measure that would call for an interim study — a common maneuver to kick controversial reform measures down the road — on the state’s ethics laws and reporting requirements.

While lawmakers took some steps forward this session, “the Legislature still has miles to go to end the ethics abuses,” said Tom “Smitty” Smith, the Texas director for the consumer watchdog group Public Citizen.

At the end of the day, McDonald said, “politicians can’t be trusted to clean up politics.”

Lawmakers Collect Daily Pay Even in Recess

by Jay Root

Published on June 6, 2013

Walk into the Texas Capitol and you’d hardly know the state Legislature has been called into a 30-day special session. The Texas House is in recess until June 17, and the Senate is taking most of the week off.

But every day of the special session, taxpayers are being billed for “per diem” payments that legislators are entitled to receive whether or not they’re at the Capitol — or even in the state. If every eligible lawmaker were to take full payment for a month, those costs alone would exceed $800,000. Add travel costs to and from Austin, the staging of redistricting committee hearings around the state and legal fees paid to outside lawyers and the pricetag could easily blow past $1 million. But the total cost to taxpayers won’t be known until the session ends later this month.

Given the exceedingly light schedule, a handful of House members and at least one senator — Republican Brian Birdwell of Granbury — have instructed their accounting departments not to pay them. Lt. Gov. David Dewhurst, a multimillionaire who has been on a personal trip to France, also is forfeiting the per diem payments, officials said.

Dewhurst went to Normandy for the dedication of a museum he helped build to honor D-Day heroes — including his own father. Before he left, Dewhurst urged Gov. Rick Perry to add a series of conservative proposals to the special session agenda. Perry, who can call an unlimited number of 30-day sessions and exclusively determines what can be debated during them, hasn't said if he'll expand the list of eligible items beyond redistricting.

Dewhurst "didn't make the final decision to make this trip until it was clear there would be no floor action and has kept in regular contact with his staff regarding events relating to the special session,” his spokesman Travis Considine said. “His goal is to complete the unfinished business remaining from an already-successful session, and he is not going to take any per diem during the special session." Dewhurst returns from France on Sunday, Considine said.

In the House, Rep. Charlie Geren, R-Fort Worth, chairman of the House Administration Committee, said he has told fellow members that he directed accountants to withhold his per diem payments for the long stretches in which the House is not meeting.

“I’m not telling anybody they have to do it. I’m just telling them I’m doing it,” Geren said. “I’m going to be home or fishing, and I don’t think I need to get paid for that.”

While lawmakers are paid a salary of just $7,200 a year, they receive per diem payments — currently set at $150 a day —  for "each day during each regular and special session of the Legislature," per Article III, Section 24 of the Texas Constitution. The per diem payments are automatically processed unless lawmakers instruct their accounting departments to withhold the money, officials said.

So in odd-numbered years, when lawmakers must meet in regular session for 140 days, lawmakers (including the lieutenant governor) receive an extra $21,000 at the current per diem rate. Add a special session to that and the amount rises by $4,500, for total compensation of $32,700. (They also get state-provided health insurance and, after eight years, a lucrative pension.)

Perry called the special session on redistricting the day the regular session ended on May 27. Calls to his office were not immediately returned.

Part-Time Legislature Can Create Financial Hardship

by Morgan Smith

Published on February 14, 2013

In his two decades in the Texas Legislature, Rep. Garnet Coleman has learned to hustle.

The Houston Democrat has gone bankrupt once, come close to it one time after that and managed to rebuild his finances yet again while remaining in office. During certain periods, he said, his wife has worked two jobs to support their family so he could stay in the Texas House.

"I'm using this word not in the negative connotation, but it's when you feel like a hustler,” he said, describing his lean times. "You feel like you are hustling your dollars, and you don’t have the confidence that the money is going to be there."

To supplement the meager $600-per-month legislative pay, Coleman said he would maximize the $150 per diem to help support his family while the Legislature was out of session. He got a fuel-efficient car to drive from Houston to Austin to stretch mileage reimbursements. Instead of dining out with his colleagues during the session, he said, he would return home to eat microwave meals. He would find the cheapest living arrangements possible, which one session included a garage apartment infested by mice.

“You do everything you can to legally realize more money and revenue for yourself and your family and really lower expenses,” he said.

The state's founders envisioned the part-time Legislature as a place where there would be no room for full-time politicians. Tying lawmakers to their districts for all but five months every two years would keep them connected to the constituents they had been elected to serve. But in the modern Legislature, the paltry pay that goes along with being expected to earn a living elsewhere can have the opposite effect — narrowing the ranks of potential office-holders to only those who can afford to do it full time.

That’s because for most members, the demands of public office aren't quite limited to January through May in odd-numbered years. The needs of their constituents and the issues they must follow to make public policy don’t go away during the interim, nor do the campaigns they must orchestrate to stay in office.

“When I decided to run, I looked at, well, 140 days every other year, you can probably hold your breath that long,” said former state Rep. Rob Eissler, a Republican from The Woodlands who was first elected in 2002.

As his responsibilities as a lawmaker grew, that impression quickly changed, he said.

“It starts to engulf you. You lie in bed at night trying to think of ways to make things better, and that you have opportunity to do it,” he said.

Now a lobbyist after losing his 2012 primary, Eissler said the chance to continue to help shape public policy is part of the reason he’s back in Austin.

“What's funny is that now I can get paid for things that I was doing for nothing,” he said.

Of the states that offer legislative salaries — nine offer only per diem compensation — Texas finishes close to last, according to figures from the Manhattan Institute’s Empire Center Project. That's in front of South Dakota, which pays members of its Legislature $12,000 per two-year term, and New Hampshire, which pays its lawmakers $200 a year. The next-closest of the heavily populated states is Florida, where legislators, who meet for 60 days each year, pull in about $30,000 annually. In California, full-time legislators are paid roughly $95,000 a year; in New York, they make almost $80,000 to work year-round.

Voters in Texas last approved a lawmaker pay hike in 1975, an increase from $400 a month to the $600 a month they are currently paid. Back then, Texas lawmakers were still among the lowest paid in the nation. The win came after then-Dallas Rep. Paul Ragsdale successfully qualified for food stamps, an effort to make a political point about the inadequate pay. A story also emerged at the time that Dave Allred, a House member from Wichita Falls and son of a former Texas governor, had been sleeping in his Capitol office during the session to save money.

According to the Houston Post, Allred visited friends’ houses when he needed to take a shower. He told the newspaper he put up with the living conditions “because, and I know this sounds schmaltzy, I love public service.”

Despite Allred’s zeal, questions linger over whether it is fair to impose what can be a significant financial hardship on public servants who still must earn a living on the side — and whether the system gives greater opportunities to lawmakers who are independently wealthy.

The constituents of a lawmaker who must devote time to working outside state government are at a disadvantage, said Rep. Elliott Naishtat, an Austin Democrat and attorney. He added that a part-time, low-pay Legislature empowered legislative staff and lobbyists — who are paid full-time to monitor issues affecting state policy — over elected officials.

“It's difficult to run a $180 billion venture or ‘business’ on a limited, part-time, biennial basis,” he said. “Those of us who have to work for a living have less time to devote to being the best legislator that we can be because we have to work.”

Not all lawmakers agree. Rep. James White, a Hillister Republican who left his job as a schoolteacher to take office in 2011, said he didn’t consider the low pay a “hardship.” But he did acknowledge that as a single man without a family it was easier for him than others to keep a modest lifestyle. When he is not in Austin or campaigning, White does consulting work for the forestry industry to generate income.

Because of the flexibility it offers, consulting can be an attractive option for lawmakers who need to pay their bills, said Coleman, who also runs a Houston consulting firm. But even there, it’s difficult to avoid the challenges that face lawmakers in most professions.

“People don’t like to pay folks who aren’t there,” Coleman said, noting that the novelty of hiring a legislator can quickly wear off.

And the employers who are eager to hire a lawmaker might not be doing it for the right reasons, he said.

“Wink, wink, they are really trying to get you to work on their issues inside the government,” he said. “And if it's somebody who is legitimate, they don’t want the risk of the actual legislator getting into trouble, because it pushes back on them, it makes them look bad.”

There hasn't been a major move to raise lawmakers’ annual compensation since 1989, when a measure that would have set salaries at around $23,000 a year — or one-fourth of the governor's pay, which the Legislature sets — failed 2-to-1 at the ballot box.

More than two decades later, the political tides remain unlikely to shift.

“I don’t see it as I work and I am a member of the Legislature,” Coleman said. “I see it as I work so I can be a member of the Legislature.”