in Houston, Texas
Author of sweeping ethics bill Jim Nugent reflects on political climate around 1973 ethics legislation and spousal loophole
Tuesday, Jul 13, 2010, 01:34PM CST
By Mark Lisheron

At 88, Jim Nugent says his memory for detail isn’t what it used to be. But Nugent remembers well House Bill 1.

Nugent was the author of the 215-page bill passed in 1973 by the Legislature that ushered in the modern era of transparency in state government in Texas. In reaction to one of the biggest political scandals of the last 50 years, the Legislature overwhelmingly backed new laws that forced candidates to make their incomes public, their campaign finances more public and allowed the public greater access to government meetings and government records.

The original bill, however, was not a reaction to the incendiary stock and banking fraud scandal now known as Sharpstown, Nugent recalled in a phone interview at his home in Austin. “I must have carried that bill for three or four sessions,” Nugent says. “I think the first session I introduced it, there were two of us supporting it.”

Nugent was a Navy flier during the Second World War and a prosecutor in Kerrville who was first elected to the Texas House in 1961. He says he became increasingly bothered by the amount of money being spent on campaigns and the inability of voters to know where the money was coming from. And he was bothered that his colleagues weren’t as bothered as he was.

“I didn’t object to money in campaigns. We all needed money to run our campaigns. I just thought the public was better off knowing where everybody was getting their money. I just don’t think the Legislature wanted it passed,” he says.

Sharpstown provided evidence for the absence of support for Nugent’s legislation. In January of 1971, as Nugent was heading into his fifth legislative session, the U.S. Securities and Exchange Commission filed a lawsuit in federal court in Dallas that began to unravel a web of alleged collusion, bribery and dealmaking between Fred Sharp, the owner of the Sharpstown State Bank and National Bankers Life Insurance Co. in Houston and many of the top elected officials in the state, including Gov. Preston Smith.

The scheme involved $600,000 in loans from the Sharpstown State Bank to officials to buy stock in National Bankers Life and profit from an artificial inflation of the price engineered by Sharp. The price Sharp exacted was favorable banking bills that were passed by the Legislature although they were vetoed by Gov. Smith.

Of the many officials named in the suit and supporting documents, only House Speaker Gus Mutscher Jr. was indicted. He was later convicted and sentenced to probation. The scandal did, however, ruin the careers of many state politicians, including Smith, who lost in the Democratic primary to the eventual winner, Dolph Briscoe, who died this past June.

Almost half the membership of the state senate and house changed from 1971 to 1973. Nugent, one of the surrivors, suddenly found benefactors in Marion Price Daniel Jr., the new speaker of the House and John Hill, the state attorney general.

If you look at a copy of House Bill 1, signed by Gov. Briscoe you will notice the top of the page full of signatures crowded around that of the author, like lipstick kisses on a valentine. “You can’t believe how many people wanted to sign that bill with me,” Nugent recalls. “It probably took three or four minutes to pass it.”

When asked if the bill marked a high point in a long political career, Nugent says, “it was one of them.” Nugent left the House in 1979 to join the state Railroad Commission, where he served as its chairman from 1981 until he retired in 1995.

See Texas Watchdog's story: Rep. Linda Harper-Brown's idea to close spousal loophole met with officials' silence

Apologizing for a faulty memory of the specifics of a nearly 40-year-old bill, Nugent says he does not recall what it had to say about the spouses of elected officials having to report income and gifts. Nugent was not aware of the recent complaints against state Rep. Linda Harper-Brown, R-Irving, nor could he say if the bill was clear enough about whether or not she was required to report a luxury car given to her husband who did work for a company that has state contracts.

Nugent would say that he and other reformers were well aware of how much damage could be done without financial disclosure laws. He said his bill was meant to be as comprehensive as it could be for the time, to encompass circumstances well beyond Sharpstown.

And how well did he succeed? Nugent is modest. “I thought it was a good bill,” he says. “I know it’s more transparent today than it was before that bill.”

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