in Houston, Texas

Rep. Linda Harper-Brown's idea to close spousal loophole met with officials' silence

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Monday, Jul 12, 2010, 10:58PM CST
By Mark Lisheron

Stripped of all the particulars and motivations, the curious case of state Rep. Linda Harper-Brown will pivot on the interpretation of a two-word legal phrase written into law by people reacting to the biggest political scandal in the last 40 years in Texas.

Texas Values in Action Coalition filed a complaint last week with the state Ethics Commission against Harper-Brown, R-Irving. The Democratic action group charged that the House Transportation Committee member should be penalized for failing to report to the commission that she was driving a $56,000 Mercedes-Benz E-550 given to her by her husband and owned by a company that has transportation contracts with the state.

To decide whether Harper-Brown violated the state’s ethics laws, the Ethics Commission must determine if she had actual control of the car. And to get to that decision the commission must interpret what was meant by the authors of the phrase “actual control,” embedded in a bill that remains after 37 years the undergirding of all political ethics regulation in the state.

This interpretation takes on greater significance because Harper-Brown has said if reelected this fall she will ask the Legislature to help her pass a law that would, in effect, eliminate the “actual control” standard and require lawmakers to file reports on all spousal finances.

If the relative silence among elected officials currently is any indication, do not expect lawmakers to rise up in a fit of righteous pique to champion Harper-Brown’s proposed reforms. Having contacted eight of the top elected officials in both parties, only three responded. One of them, House Speaker Joe Straus would have no comment without being able to review the specific legislation, his spokeswoman, Tracy Young, said.

Lt. Gov. David Dewhurst said that while he was not intimately familiar with Harper-Brown’s circumstances, he believed there was merit in the Legislature considering a legal change that would require more disclosure if the family of an elected official derived income from a company doing business with the state.

Dewhurst was not enthusiastic, however, about a law that would render irrelevant a review of the facts of individual cases, like Harper-Brown’s.

Rep. Ken Paxton was much less enthusiastic. Paxton, R-McKinney, serves along with Harper-Brown as an officer with the Texas Conservative Coalition and has been vocal in the past on legislation to make state government more transparent. Paxton said he supports that part of Texas ethics law that allows a husband and wife to keep their finances separate for the good of the family unit.

“I don’t mind disclosing anything that has to do with me, but I wouldn’t like a situation where you are pitting one spouse against another, essentially having one accuse the other of wrongdoing in the media,” Paxton said. “No one wants to do that. If it’s a question of this job in the Legislature and your marriage, your marriage is a sacred bond.”

Since the Legislature created the Ethics Commission in 1992, the commission has faced little direct opposition to the concept of actual control, Tim Sorrells, a spokesman for the commission, said. A cursory search of cases involving actual control finds relatively few complaints to the commission about the reporting of income, compensation and gifts by the spouses of elected officials, he said.

In 2007, for example, the commission decided that former state Rep. Eugene Seaman, R-Corpus Christi, had no actual control of an apartment he rented in Austin from 1999 until his term ended after his defeat in the 2006 election. The apartment was owned by his wife.

In that year, ethics watchdogs publicly challenged the rental arrangements of state Sens. Kim Brimer and Jane Nelson and state Rep. Vicki Truitt, who had been paying their rent to their landlord spouses with campaign funds.

Under pressure, Truitt stopped renting from her husband and promised to introduce a bill that would make the practice illegal. The Legislature in 2007 unanimously approved outlawing the use of campaign money for rent, but chose not to address the questions of actual control raised in the rental agreement between spouses.

“We don’t have an actual opinion that addresses the term actual control,” Sorrells said. “It is something that has always been determined on a case-by-case basis.”

Ethics advocate on actual control v. legal control

Fred Lewis said he thinks the Legislature in 1973 included the phrase actual control precisely to avoid having to legislate for each and every contingency that followed passage of what was, at 215 pages, the most comprehensive ethics bill ever in Texas.

Lewis has made his reputation in Austin as a ferocious advocate for statewide ethics and campaign finance reform. He is a sharp critic of what he says is a porous system of financial disclosure.

“I think it’s fair to say that based on the facts presented in the case of Linda Harper-Brown an investigation is warranted,” Lewis said.

But as an attorney Lewis said he differs from those who accuse Harper-Brown of slipping through a loophole in state law. Rather, Lewis said his reading of the statute suggests that by using the more general term actual control, rather than the more specific, legal control, the Legislature was actually casting a wider net.

“It doesn’t read like a loophole to me, by any means,” Lewis said. “Determining what, in the real world, is actual control is based on the facts of each individual case, which is the approach I think works best in the real world. If it were me and I were in the Legislature, I would want to use a term that was less precise to capture as many real-world examples as you could.”

Heading into the 63rd Legislature, the real-world examples had been piling up like a train wreck for two years. The federal Securities and Exchange Commission had in 1971 broken wide open a scheme by a Houston businessman, Fred Sharp. Sharp loaned money to Texas officials from his bank for them to invest in stock in his life insurance company in exchange for what he had hoped would be advantageous state bank deposit insurance legislation.

The scandal that became known as Sharpstown resulted in the conviction of Sharp and the indictment of House Speaker Gus Mutscher Jr. It ended the career of Gov. Preston Smith and damaged the political career of Lt. Gov. Ben Barnes. The 62nd Legislature reacted by passing an ethics bill that had so many problems it was ruled unconstitutional.

After watching politicians trying to escape indictment on technicalities and specifics, it would have made sense for the Legislature to cast the widest net possible, Lewis said.

“If you know that this legislation followed Sharpstown, actual control makes sense,” he said.

Atty. Gen. John Hill found actual control to be wholly consistent with the goals of the 1973 Ethics Act. When asked by then state Sen. Ron Clower for a ruling on reporting his wife’s financial activity in 1974, Hill wrote, “The Act was intended and designed to be comprehensive in its requirement that any private interests of decision makers be disclosed and made public to lessen the temptation to place personal gain over public duty.”

Hill’s opinion also acknowledged that “our laws increasingly recognize the right of each spouse to have sole management, control and disposition of his or her separate property.”

Rather than define actual control, Hill’s opinion depends upon the ability of others to determine what actual control is. Texas Watchdog has shown that allowing officeholders to be their own best judge has meant that many of them leave spouses’ names and interests off their ethics forms.

An attempt to put that determination in the hands of lawmakers will likely result in scattershot laws that will hit some targets and miss others, Lewis said. Any attempt to simply remove the determination and force spouses to report their income as a matter of course is likely to be met with stiff resistance.

“Whatever you would end up doing,” Paxton said, “you’d better confine it pretty narrowly.”

Contact Mark Lisheron at 512-299-2318 or mark@texaswatchdog.org.
 
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