in Houston, Texas

Gaping loophole in Texas ethics law: Officials' spouses left off financial disclosures

files/2009/09/newcake-227x300.jpg
Thursday, Sep 17, 2009, 09:43AM CST
By Lee Ann O'Neal
Houston City Councilman Peter Brown's wife is an heiress to an oilfield services fortune. State Sen. Glenn Hegar's wife is an attorney.

But you wouldn't know that by looking at the financial disclosures filed by the two politicians, whose lawmaking has sometimes collided with the interests of their wives.

The omissions are perfectly legal under a loophole in state law that requires the listing of politicians' wives and husbands only if the politician had "actual control" over the spouse's financial activity. And it doesn't matter if the spouses' businesses might benefit from votes made by their significant others; those businesses can still be left off the forms.

The law was designed to balance the public's right to know with the politicians' families right to privacy, said conservative blogger Darrell Hancock. He was a statehouse reporter for the now-defunct Houston Post around the time of the infamous Sharpstown scandal of 1973 that sparked the passage of campaign finance, public records and ethics reforms, including the requirement that state officeholders disclose their income sources.

"The problem with letting them off the hook is that we have to trust them to determine what actual control means, and a clever officeholder can drive trucks through that exception," Hancock said.

The disclosures, which are public documents and are available via an interactive map by Texas Watchdog, list the financial and business activities of lawmakers, their spouses and their dependent children.

The personal financial disclosure statements show employers, stocks and investments, loans, and land holdings and can be useful to the public in making sure officials don't have conflicts of interest between their public legislative activities and their personal financial interests, or that of their spouses and children.

But the spousal requirement is carefully worded. The public official must disclose the spouse's financial activity if he "had actual control over that activity for the preceding calendar year."

The term "actual control" is not defined in state law, said Tim Sorrells, a spokesman for the Texas Ethics Commission.

The rule is open to officials' own interpretations.

Houston councilman Peter Brown omits wife, then lists her

Brown marked "N/A" beside the spouse area on his disclosure form covering calendar year 2007. In his most recent form, he apparently remembered his marriage to oilfield-services heiress Anne Schlumberger Brown, but in the subsequent pages he details no investments or other financial activity for her.

"We actually think it was an oversight last year not to have listed her," said Robert Fiederlein, Brown's chief of staff. "We think this year's filing is correct. We're exploring the necessity of filing an amendment" to last year's form. Brown is running for Houston mayor.

Anne Brown's finances were highlighted last year when the city of Houston seized a tiny patch of land near the Galleria, claiming it was needed as a park. The green space could serve as "a landscaped gateway to an upscale development planned next door, called BLVD Place," the Houston Chronicle reported.

None other than Anne Brown was an investor in the development -- and her husband voted to condemn the patch of land.

Brown

The Chronicle wrote:
"Under Texas conflict-of-interest law, a public official should recuse himself from a vote involving a property if he, his spouse or close relative has a 'substantial interest,' valued at more than a $2,500.

"Brown called his wife a 'limited partner' in the project but declined to reveal how much her investment was worth.

"Brown initially told the Houston Chronicle that he asked city attorneys before the vote if he should recuse himself. He later called the Chronicle to say he had voted on the condemnation without realizing the land was next to BLVD Place. Only later had he approached the Legal Department for advice. The lawyers told him he was okay."


State Sen. Glenn Hegar: 'Everything's open'

Hegar, R-Katy, did not disclose his wife, Dara, working as a lawyer for the Houston-based Lanier Law Firm, on his most recent financial disclosure filed in 2009.

But that's OK according to the state rules governing the disclosures.

"Anything that I have control over, which is what the requirements are, that's what's reported," Hegar said. "And so anything that my wife owns individually, what little that is, she has control over it, and I have no control over any of that whatsoever."


Hegar

Hegar said it's easy to find information about his wife's occupation already. His family is listed on his  House Web site, and Dara Grisbee Hegar is listed on the Lanier firm's Web site as an associate.

"As far as where my wife is at, everything's open," he said.

One of the firm's specialty areas is in recovering damages for people exposed to asbestos.

Hegar voted on a state measure that would have made it easier for people suffering from asbestos exposure to recover legal damages. The bill did not pass into law.

Hegar voted against the measure, or essentially, against his wife's firm's interest.

Asked whether his wife's line of work affected his vote, Hegar said, "Absolutely not."

"If my wife were a teacher or worked in a school district, should I abstain from voting on school issues?" he said. "Absolutely not."

Hancock, who writes the blog Unca Darrell, said he's not criticizing the lawmakers who omit their spouses' financial information within the bounds of the law even though he would admire lawmakers "who always did the right thing and in fact voluntarily disclosed their spouse's financial matters."

If it were up to him, he said, he would have required all spouses and their interests be listed.

The lawmakers "help spend the money that the spouse makes," Hancock said. "Under the (state of Texas') community property doctrines, it's partly their money, the income is. It makes their family wealthier, their standard of living improves, they benefit."

Click here to see the list of lawmakers who reportedly have spouses but did not list them on their forms, according to Texas Watchdog research.
Questions? Additions? E-mail news@texaswatchdog.org or call 713-980-9777.

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Homepage photo of a wedding cake by flickr user cambodia4kidsorg, used via a Creative Commons license.

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