in Houston, Texas
Ethics bill would require disclosure of lawmakers’ contracts with state of Texas
Wednesday, Jan 16, 2013, 12:53PM CST
By Mark Lisheron
see-through raincoat

Look out, Linda Harper-Brown. If lawmakers aren’t careful people are going to start calling this the See-Through Legislature.

Blissfully aware of the animus they are supposed to have for one another’s politics, hardline conservative Rep. Giovanni Capriglione and hardline liberal Rep. Mary González are staging a veritable lovefest with a bill that would require all legislators to disclose if they or their family members do business with state or local government.

House Bill 524 would require lawmakers, many of whom are also lawyers, to waive any attorney-client privilege should they choose to represent a company doing business with a state agency, a public university or a water district, the Texas Tribune reports.

The bill comes less than a year after the Ethics Commission fined Harper-Brown, R-Irving, $2,000 for failing to reveal that a brand new Mercedes Benz she had been driving was a barter payment to her husband for accounting work he did for a company with state transportation contracts.

Giovanni CapriglioneGiovanni Capriglione

Harper-Brown sat on the House Transportation Committee at the time a complaint was filed against her with the Ethics Commission.

Capriglione, in his second week on the job, is daring his colleagues to ignore their bill.  “I want to see who doesn’t vote for this,” he tells the Tribune. “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.”

The Southlake Republican has a little familiarity with the topic, having beaten former Rep. Vicki Truitt, another disclosure-challenged representative of the people, in the Republican primary in District 98 this past May.

Giving Capriglione a big rhetorical bearhug, the Democrat from Clint replied, “Transparency and ethics are bipartisan issues.”

Taking this sentiment to heart, state Sen. Wendy Davis on Tuesday filed Senate Bill 178, a companion bill with much the same disclosure language as HB 524.

Davis, D-Fort Worth, was able to research her bill firsthand as a partner of Brian Newby, former chief of staff for Gov. Rick Perry. Newby Davis promotes on its website expertise representing every manner of government entity including the state’s public schools and a facility for assisting on bond financing.

Accused by her Republican opponent for state Senate, Mark Shelton, of criminal conflicts of interest, Davis this past fall insisted her practice did not interfere with her role as a representative. She declined, however, to identify her clients, telling the Fort Worth Star-Telegram to do so would violate attorney-client privilege.

At the time she was denying any conflict of interest, Davis decided to remain mum on Shelton’s contention that Newby Davis was being paid handsomely to represent the North Texas Tollway Authority at the same time Davis was voting to support SB469 assisting the authority in collecting unpaid tolls.

Davis told Texas Tribune yesterday afternoon she would be amending SB 178 just in case it wasn’t clear enough to everyone the disclosure requirement would include her.

Capitol visitors this session, don’t worry. Should the emperors speaking on the floor of the House or Senate be wearing no clothes, assume they have filed another transparency bill.

***
Contact Mark Lisheron at 512-299-2318 or mark@texaswatchdog.org or on Twitter at @marktxwatchdog.

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Photo of clear raincoat via Allyn.com, the site documenting the work of artist Mark Allyn. Photo of Texas state Capitol by flickr user Frank Swift, used via a Creative Commons license.

Texas lobbyist Mike Krusee uses leftover campaign funds on upscale hotels, fancy meals
Friday, Jun 08, 2012, 10:23AM CST
By Mark Lisheron
money

An ethics watchdog thinks Mike Krusee, a former legislator and now a lobbyist, is breaking the law by some of the ways he has spent nearly $200,000 left over in his campaign fund.

But the sometimes gauzy way the state’s ethics laws are written and the sometimes opaque way they are enforced, well chronicled here by Texas Watchdog, makes it hard to know if Texans for Public Justice is right.

As an exercise in good government, we’ll let you decide.

It seems someone filed a complaint last year against Krusee, of Round Rock, who turned to lobbying in 2009 after serving eight terms in the Legislature, according to the Austin American-Statesman today.

The story doesn’t disclose whether Texans for Public Justice filed the complaint. While Gregg Cox, director of the Travis County district attorney's Public Integrity Unit, confirmed receiving the complaint, he declined to comment on its status.

The ever helpful Ethics Commission makes it a policy not to even acknowledge receiving an ethics complaint until it has made a ruling in secrecy. The Commission, which, when asked, issues interpretations of ethics laws, has not to this point interpreted a case like Krusee’s, the Statesman story says.

When Krusee left the legislature he had more than $300,000 in his campaign contribution accounts. According to disclosures he filed with the Ethics Commission, lovingly detailed by the Statesman, Krusee has spent much of the money jetting around, staying in expensive hotels and feasting on posh dinners.

Andrew Wheat, research director for Texans for Public Justice, told the Statesman it appears from the filings that Krusee is using campaign money for personal use, a violation of state law.

Krusee says he spent the money attending meetings of the non-profit Congress for the New Urbanism, an organization he joined while serving as a state representative. As a member of the board of the group, Krusee considered it an ongoing obligation to jet, sleep and eat expensively.

The considerable expenses have nothing to do with his lobbying, Krusee says. And, besides, a lawyer told him it was all right, the story says.

With the system as it is, Texans for Public Justice and the public will just have to wait to see what  - or if - the Ethics Commission or the Public Integrity Unit will do anything with the complaint.

In 2010 state Rep. Linda Harper-Brown, R-Irving, was accused of ethics violations for driving a new Mercedes Benz that had been a gift to her husband from a company with state transportation contracts.

After nearly 21 months of silence, the Ethics Commission fined Harper-Brown $2,000. The lawmaker has yet to fulfill a promise she made in 2010 to rewrite the ethics law on disclosing the income or property shared by legislators and their spouses.

***
Contact Mark Lisheron at 512-299-2318 or mark@texaswatchdog.org or on Twitter at @marktxwatchdog.

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State Rep. Linda Harper-Brown fined $2,000 for failing to disclose Mercedes Benz from state contractor
Friday, Apr 20, 2012, 03:42PM CST
By Mark Lisheron
Mercedes Benz

After almost 21 months, the Texas Ethics Commission has fined state Rep. Linda Harper-Brown $2,000 for failing to report as income a new Mercedes Benz she drove, but that had been given to her husband by a state contractor.

Harper-Brown, R-Irving, was in violation of the law, the Commission decided, because she was in actual control of the $56,000 Mercedes-Benz E550 and failed to report it on her 2008 and 2009 state financial disclosure forms.

You can read the entire Ethics Commission decision here. The Commission reviewed the complaint filed in June of 2010 by Texas Values in Action Coalition, a Democratic Party action group, on Dec. 14.

Texas Watchdog this afternoon made a request for comment through an assistant for Harper-Brown in Austin and was awaiting a response.

Texas Watchdog has, for nearly three years, reported on complaints made against elected officials that have tested the spousal loophole. Rarely has the Ethics Commission decided an official has had actual control of property that has come from a spouse.

Linda Harper-BrownLinda Harper-Brown

Harper-Brown set off a statewide debate on a loophole in the legal requirements for elected officials to report income when the income is generated through a spouse. Because the Legislation provided no definition for the concept of “actual control,” its interpretation is made on a case by case basis by the Ethics Commission.

Durable Enterprises Equipment Ltd., of Dallas, had for several years hired William Brown III to do accounting work for the company.

 

The company, the recipient of $8.2 million in state transportation contracts in 2009 and 2010, paid for some of the services by giving Brown the use of two company-owned vehicles. Brown turned the Mercedes Benz over to his wife, a member of the House Transportation Committee at the time.

When Harper-Brown applied for and received special legislative license plates for the car, the Values in Action Coalition complained the car was nowhere to be found on her financial disclosure records.

In the days that followed, Harper-Brown insisted to reporters she had violated no ethics laws. She continued to argue that she had done nothing wrong in an affidavit filed on Nov. 30, 2011 for the Ethics Commission.

She did, however, give up the car and announced her intention in the 2011 session of the Legislature introduce a bill to close the spousal loophole.

There is no record that Harper-Brown filed that legislation, and she has since avoided answering questions about it in several requests for an interview made by Texas Watchdog.

***
Contact Mark Lisheron at 512-299-2318 or mark@texaswatchdog.org or on Twitter at @marktxwatchdog.

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No word on Mercedes-Benz complaints against Rep. Linda Harper-Brown -- and don’t hold your breath on her promised fix to ethics law, either
Thursday, Nov 10, 2011, 09:38AM CST
By Mark Lisheron
Mercedez-Benz logo

First came the accusations, the tears and the promises. What followed is a long silence.

In June of 2010, the Texas Values in Action Coalition, a Democratic action group, filed complaints with the Texas Ethics Commission and the U.S. Attorney’s Office in Dallas against state Rep. Linda Harper-Brown.


In its complaints, the coalition challenged Harper-Brown’s use of a $56,000 Mercedes-Benz E550 without reporting it on her financial disclosure forms. Since that time, the group has heard nothing from the Ethics Commission or the U.S. Attorney, their lawyer, Edward Cloutman, said Tuesday.


“I have heard nothing. No one has told me of any inquiry. I can’t tell you what they are or aren’t doing,” Cloutman said.


The Ethics Commission is protected by the Legislature from even having to acknowledge the existence of the Texas Values complaint. Cloutman says he was told the U.S. Attorney is treating it as an open matter, although he and his clients have had no formal contact from anyone.

Harper-Brown, R-Irving, has for weeks been ducking telephone calls from Texas Watchdog. A staff member for Harper-Brown returned one call promising to locate Harper-Brown, but neither called back.

What, Watchdog wanted to know, had become of her pledge to change the law that had caused her all of the trouble with the Mercedes-Benz? Could Harper-Brown help us find what we couldn’t find among the 102 bills and resolutions she authored in the regular session and the 19 she filed in the special session of the past Legislature?

 

While not presuming to speak for Harper-Brown, any attempt to close the spousal loophole in the financial reporting law was likely to have met resistance. Powerful people in her own controlling party, including Lt. Gov. David Dewhurst, said at the time they preferred not to alter a law that allows for a review of the circumstances of individual cases.

 

(Read Texas Watchdog's previous work detailing the problems with the spousal loophole here.)

 

Linda Harper-BrownLinda Harper-Brown

But the circumstances of Harper-Brown’s case existed, at best, in an ethical twilight according to the Texas Values in Action Coalition.


Durable Enterprises Equipment Ltd., a Dallas company with $8.2 million in state transportation contracts in 2009 and 2010, hired Harper-Brown’s husband to do some of their accounting work.


In exchange for the work, the company gave William Brown III free use of two company-owned vehicles, one of them a brand new Mercedes-Benz Brown turned over to his wife, a member of the House Transportation Committee at the time.


The coalition learned about the luxury car when Harper-Brown applied for special legislative license plates.


For more than a week after Dallas reporters first questioned her, Harper-Brown insisted she was within her legal right to drive the car. Because of the way the law is written, she said, her husband had “actual control” of the Mercedes-Benz releasing her from the responsibility to report it as family income.

The term “actual control” has no definition in Texas law and is, instead, determined in ethics and legal reviews case by case, according to Tim Sorrells, a spokesman for the Ethics Commission.

Texas Watchdog has for more than two years tracked how Texas politicians have interpreted actual control in their spouse’s financial dealings.

Former Houston City Council member and candidate for mayor, Peter Brown, faced questions for having failed to disclose in 2007 his wife, Anne’s, involvement as an investor in a development which had required a condemnation for which Brown cast an affirmative vote.

In 2009, state Sen. Glenn Hegar, R-Katy, was made to answer why he left his wife’s income as a lawyer off of his financial disclosure reports. Dara Hegar’s firm specialized in asbestos victim cases. Hegar had in the past voted against a failed bill to make it easier to collect asbestos damages.

The law, Hegar said, was on his side. Under the circumstances, Hegar said he felt no need to recuse himself from a vote on a major issue.

Under pressure last year, Harper-Brown summoned reporters to say that although she had done nothing wrong she was giving up the car. With tears filling her eyes, she said her husband was changing his barter agreement with Durable.

Finally, she told reporters she intended to introduce a bill in the upcoming legislative session closing the spousal loophole.

For reasons she has yet to explain, Harper-Brown did not file that bill.

***
Contact Mark Lisheron at 512-299-2318 or mark@texaswatchdog.org or on Twitter at @marktxwatchdog.

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Photo 'Our car in the MBtweetrace' by flickr user reallocalcelebrity, used via a Creative Commons license.

'Toothless,' secretive Texas Ethics Commission fails the public
Thursday, Oct 27, 2011, 09:00AM CST
By Mark Lisheron
Texas state Capitol

As it heads into a state performance review that could determine its future, Craig McDonald is worried legislative sentiment is growing to gut the Texas Ethics Commission.

The commission is not a particularly sympathetic victim. Its champions, including McDonald, director of the left-leaning government reform group Texans for Public Justice, are among its harshest critics. The public, they say, has been miserably served by an agency trussed and muzzled by a Legislature over which it is supposed to keep watch.

At the same time the commission is rarely involved in the most serious ethics violations in state politics it has managed to raise the ire of legislators for what they see as overly aggressive enforcement of its rules for filing campaign finance, personal income and lobby reports.
Craig McDonaldCraig McDonald

“I think we are at a risk that there hasn’t been since the Ethics Commission was created,” McDonald said. “I think there is a feeling that you heard during the last session that the Ethics Commission was out of control. What you really have is a commission that is toothless, that was designed by the Legislature to be toothless.”

Rep. Dennis Bonnen, R-Angleton, admits there exists more than an air of annoyance. More than the fines, he says, otherwise honest elected officials are made to explain to the voters in their districts ethics transgressions he calls “ticky-tack I dotting and T crossing.”

Bonnen ought to know. Since 2007 the Ethics Commission has fined him $1,200 for three instances of errors in his filings, most recently $500 for being a day late filing a personal income report.

The fines had nothing to do with Bonnen’s request upon being named chairman of the Sunset Advisory Commission that the Ethics Commission review scheduled for 2015 be moved to this year.

Bonnen moved the timeline up, he says, because he believes the Legislature needs the nonpartisan analysis the Sunset Advisory Commission will gather over the next five months.

“Sunset is one of the few truly non-political things we do around here, and that’s what we need with the Ethics Commission,” Bonnen says. “I thought the time was right for us to have this discussion.”

The discussion has continued with little interruption for 20 years since Gov. Ann Richards successfully pushed to have the creation of an Ethics Commission on a statewide ballot.

Texans used to their politics big and brash were nonetheless more than a little appalled to learn that not only was East Texas chicken magnate Lonnie “Bo” Pilgrim cutting contribution checks for $10,000 on the floor of the Senate during the 1989 session, but was bragging about it.

The news triggered an ethics reform movement that led to voters comfortably approving changing the state Constitution to create the commission in January of 1992.

Some reformers, however, including then-Travis County District Attorney Ronnie Earle, warned of the inevitable conflicts posed by a commission made up of eight political appointees answering to a Legislature it might one day be investigating.

One day never came. In its report to the Legislature 10 years after the Ethics Commission first convened, the Sunset Advisory Commission said the commission’s chief failing was its inability of staff to investigate ethics complaints, subpoena documents and share information with law enforcement agencies.

The report came as no surprise. The Legislature had made no provision, either legal or in funding, for the commission to do investigations.

Enforcement power? ‘They never do anything’: Austin attorney

To make a point, for several years Fred Lewis, an Austin attorney and a good government advocate, drafted long and intricate open records requests asking for all documents pertaining to all investigations conducted in a year by the Ethics Commission.

Every year Lewis received nothing in return for his request, which he took note of in a scathing 60-page critique he delivered to the Legislature in 2001.

“How can this be any sort of enforcement agency if they don’t do investigations?” Lewis says. “They never interviewed a witness under oath - never, ever. They never subpoenaed a document. The bottom line is they never do anything.”

This might be too harsh a criticism, McDonald says. Within its purview, the Ethics Commission, with its $2 million annual budget, does a good job handling complaints made by citizens, he says.

Indeed, the commission sees its handling of an increased number of complaints as a sign of its overall effectiveness and public confidence in its performance, according to a self-evaluation report the commission’s executive director David Reisman filed in August with the Sunset Commission.

According to its records, the commission handled a record 440 sworn complaints in 2010 and 230 so far through Oct. 17 this year. A decade earlier the commission took on just 93 complaints and 48 in its inaugural 1992.

The commission collected $268,162 in late filing penalties and $56,365 in sworn complaint fines in 2010, according to its self-evaluation report.

The commission posts on its website copies of every one of the actions taken on complaints that are heard, a fraction of the total the commission does not publicize.

Much of what the commission does it will not publish or discuss. The commission refuses to acknowledge receiving or looking into complaints. It will not disclose the names of the individuals or organizations making the complaint. It will not discuss how it arrives at a fine or its amount.

And it will not discuss its affairs or its Sunset review or the criticism from citizen advocates or the Legislature with the press. In response to an e-mail with five detailed questions, commission spokesman Tim Sorrels wrote, “As you know, the Commission doesn't typically participate in interviews. However, Executor Director Reisman provides the following response to your questions:

‘We think that the Texas Ethics Commission Evaluation Report speaks for itself. We are looking forward to the Sunset Commission Review process and hope that it will build upon the work of the 2002 Sunset Commission Review. Thank you for your interest in this very important process. We believe that the public’s interest and involvement in the process is critical for maintaining and improving the agency the citizens of this state voted to create.’”

Phone calls made to a handful of commission members by Texas Watchdog seeking comment also went unanswered.

‘Everything is secret over there’: Travis Co. Attorney David Escamilla

This culture of confidentiality, created and protected by the Legislature, has created particular problems for prosecutors investigating criminal ethics violations.

Last October a jury in Travis County convicted longtime South Texas Rep. Kino Flores on felony charges for failing to list on the financial disclosure reports that are filed with the Ethics Commission substantial income he earned unethically.

The case was investigated and brought to trial by the Travis County District Attorney’s office. If the Ethics Commission had been investigating, there is no record of a sworn complaint order.

As part of a probation agreement, prosecutors were able to compel Flores to file corrected financial disclosure statements with the Ethics Commission, Gregg Cox, who heads the government crime unit for the Travis County D.A., said.

Five months later, the Ethics Commission fined Flores $700 based on those corrected statements, Cox said.

Five years earlier, a Travis County grand jury investigating Flores filed a letter with the court expressing outrage that the district attorney was “thwarted in their efforts to prosecute public officials because they are allowed to hide behind the lax and vague codes of the Texas Ethics Commission.”
David EscamillaDavid Escamilla

In 10 years, Cox says he has never had a case referred or had so much as a discussion about an ethics issue with anyone at the commission. In 2003 when he took office, Travis County Attorney David Escamilla met with commission staff to offer his cooperation.

“I’m not aware of one case that has been referred to us,” he says. “Everything is secret over there. At the very least you’d like to know that there is an investigation going on.”

“There is no cooperation or coordination, and that hurts the public interest,” McDonald says.

No one except Rep. Linda Harper-Brown, R-Irving, knows whether or not the Ethics Commission ever chose to look into her use of a Mercedes-Benz that was a payment in-kind to her husband from a company with state contracts.

While the arrangement was legal, Harper-Brown returned the car and promised to introduce legislation closing the spousal loophole in the law.

A Watchdog search could find no such bill, and although several calls were made to Harper-Brown, she did not return one of them before deadline.

A few months later, longtime Rep. Joe Driver, R-Garland, admitted double-billing his campaign fund and the state for thousands of dollars in expenses over a period of several years. More than a year later, Driver announced he would not run for re-election.

When asked by Watchdog, Driver would not say whether double-billing was the reason he was leaving the House after 20 years nor would he say his case was under Ethics Commission review.

“My attorney would shoot me if I were to say anything about that, but there were reasons, when it became unenjoyable the last two sessions,” Driver says.

Politically-driven ‘gotchas’ reviewed, double-dipping not addressed

Changes over the past several years that have added to the reporting requirements have made it less enjoyable for elected officials and lobbyists who are also required to report on their finances.

The changes haven’t necessarily meant cleaner government, says Jack Gullahorn, who has attended Ethics Commission meetings for years and is the head of the Professional Advocacy Association of Texas.

Gullahorn says he thinks the more detailed filing requirements coupled with better online record keeping has made it easier for political opponents to file “gotchas,” driving up complaint numbers.

Getting nicked by the commission for leaving a line blank on a campaign report while Driver’s double-dipping and Harper-Brown’s spousal loophole go unaddressed have a few legislators seriously questioning the commission’s purpose, Gullahorn says.

“I get the sense there are some in the Legislature who think it (the Ethics Commission) ought to be a real, legitimate enforcement tool, and they hate the way they handle all these little pissant fines,” Gullahorn says.

Ken Levine, director of the staff that will conduct the review of the commission for Sunset, is well aware of the dissatisfaction. Late last session, Sen. Mike Jackson, R-La Porte, was able to get passed an amendment that would have watered down culpability for omissions and errors on ethics reports.

When asked about it by the Austin American-Statesman, Jackson, who said he had been egged on by irate colleagues, said he had erred and asked the governor to veto his amendment.

“We know that in some people’s opinions the Ethics Commission doesn’t do what it is supposed to do. We know that,” Levine says. “But it is very early in the process. We haven’t even started meetings with the agency. Our past reports are just a starting point.”
Dennis BonnenDennis Bonnen

Like those past reports, this latest Sunset review due in March can just as easily be ignored by the Legislature. “I’ve been here long enough to know never to say I know what the Legislature is thinking about anything,” Bonnen says.

The worst thing the Legislature could do, McDonald says, is to use its own circumscription of the commission as a pretext to further reduce or eliminate ethics oversight in the state.

“They think it rings true, that they are being nitpicked for their so-called mistakes,” McDonald says. “But the further away you get from holding people to these minimal offenses, the further you get from disclosure altogether. Our take is do your reports the right way and suck it up.”

Speak out
  • Jim Graham, chairman of the Texas Ethics Commission, (512) 463-5800

Ethics Commission members
The Texas state Ethics Commission includes experts in law, diplomacy, and investing, as well as a minister. Read more about the commission members:

James Graham, chair, a resident of Dallas, is currently an investment manager at Hunt Realty Corporation. He is a graduate of Miami University and George Washington University.

Wilhelmina Ruth Delco, vice chair, was the first African-American elected to the school board of Travis County, Texas. She spent 20 years serving in the Texas state legislature. After leaving the legislature in 1995, she accepted a position as adjunct professor of education at the University of Texas.

Jim Clancy is the president of Branscomb/PC, a business law firm with offices in Corpus Christi and Austin. He is a member of the firm's Litigation Group. His practice focuses on complex commercial and fiduciary litigation, and he also handles selected matters defending the firm's clients in personal injury lawsuits. His experience includes million-dollar verdicts for his clients in commercial disputes and countless significant settlements and dismissals. Clancy is a West Point graduate and a former Armored Cavalry Captain who served in the 1st Cavalry Division in Operation Desert Storm.

Tom Harrison is director of legal and governmental relations for Texas County and District Retirement System. He is a member of the State Bar of Texas, the Council on Governmental Ethics Laws and the National Association of State Election Directors. He received a bachelor’s degree from Texas A&M University, a master’s degree from the University of Utah and a law
degree from the University of Texas School of Law.

Bob Long is a minister, rancher, banker and board member of three international ministries. He is a board member of the First National Bank of Bastrop County, a member of the Bastrop County Character Education Committee, and a member and past president of the Bastrop Ministerial Alliance. He is also chaplain for the Bastrop Police Department and Bastrop County Honor Guard. He served in the U.S. Army and U.S. Army Reserves.

Paula M. Mendoza, of Houston, is president and owner of Possible Missions. She is chairman of the Texas Association of Mexican American Chambers of Commerce, executive board member of the Houston Hispanic Chamber of Commerce. She is a former member of the state Board of Public Accountancy.

Tom Ramsay, is a former Texas state representative and owner of Tom Ramsay Real Estate. He is a member of the Texas Association of Realtors, Texas and Southwest Cattle Raisers Association, and Independent Cattle Association. He is also a member and past president of the Mt. Vernon Rotary Club and Franklin County Chamber of Commerce.

Chase Untermeyer has been an international business consultant since 2007 after serving three years as ambassador to Qatar by appointment of President George W. Bush. Untermeyer has held both elected and appointed office at all four levels of government – local, state, national, and international -- for more than 35 years, with work in journalism, academia, and business as well. He is a member of the Council on Foreign Relations.

***
Contact Mark Lisheron at 512-299-2318 or mark@texaswatchdog.org or on Twitter at @marktxwatchdog.

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Photo of Texas state Capitol by flickr user Kumar Appaiah
, used via a Creative Commons license.

Creative Commons License
Like this story? Then steal it. This report by Texas Watchdog is licensed under a Creative Commons Attribution 3.0 United States License. That means bloggers, citizen-journalists, and journalists may republish the story on their sites with attribution and a link to Texas Watchdog. If you do re-use the story, e-mail news@texaswatchdog.org.
The Amazon deadline has passed, a $269m tax bill to Texas remains unpaid and three legislators file bills to resolve the matter
Thursday, Apr 14, 2011, 10:56AM CST
By Mark Lisheron
amazon

A self-set deadline has passed, a $269 million tax bill is unpaid, lawsuits and legislation are pending and goods are still coming into and going out of the Amazon distribution center in Irving.
 
Officials at Amazon, which has been fighting in court  with the Texas Comptroller over taxes the state says the online retailer owes, told the Austin American-Statesman and the Dallas Morning News that they did not cease operations on April 12 as they had threatened in February.
 
The nub of what is already a protracted dispute is the Comptroller contends that Amazon’s Texas distribution center is, by legal definition, a physical presence requiring the business to collect taxes on sales in the state. The $269 million is the Comptroller’s tally for taxes on Amazon’s Texas sales in 2005 through 2009.
 
Amazon is defending its position on physical presence in court here and in several other states.
 
Lawyers for Amazon are also questioning how the Comptroller arrived at its hefty sales tax total.
 
Not content to wait for the courts to settle the matter, legislators have introduced three bills, two that would make Amazon responsible for sales tax collection and one that would maintain the status quo.
 
House Bill 2403, by Rep. John Otto, R-Dayton, which would define a distribution center as a retailer in the tax code, has passed out of committee and is awaiting scheduling for a vote in the House.
 
House Bill 1317 by Rep. Elliott Naishtat, D-Austin, which is stuck in committee, would change the law to say that agreements with affiliate marketers in Texas is enough to establish the physical presence trigger for sales taxes.
 
The lone defender of Amazon’s current way of doing business, Rep. Linda Harper-Brown, R-Irving, filed, but has done nothing with House Bill 2719. Harper-Brown’s bill states more plainly that distribution centers like the Amazon center in her district, are not retail outlets.
 
***
Contact Mark Lisheron at 512-299-2318 or mark@texaswatchdog.org.

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Photo of 'Thanks Amazon' by flickr user abdelazer, used via a Creative Commons license.
Amazon the focus of legislative flurry; retailer has promised to close Irving, Texas, warehouse in April over sales tax dispute
Thursday, Mar 10, 2011, 10:27AM CST
By Mark Lisheron
Amazon box

If all of this legislative activity keeps up, Amazon.com is going to give Texas businesses a giant case of bill envy before closing shop and moving away.

Just weeks before April 12, the date Amazon promised to close its distribution center in Irving over a $269 million tax bill handed it by the state Comptroller, Reps. Linda Harper-Brown and John Otto filed competing bills, Harper-Brown’s exempting Amazon from collecting sales taxes in the state and Otto’s in support of the Comptroller’s position. A story explaining the bills is posted this morning at the Austin American-Statesman.

The two new bills are vying for legislative attention with one filed in February by Rep. Elliott Naishtat, D-Austin, that would require all businesses like Amazon with a physical presence in Texas to collect and turn over to the state sales taxes.

This flurry of lawmaking is the latest in a game of chicken that began in the summer of 2009 when the Comptroller’s office delivered the bill to Amazon for sales taxes the Comptroller said the company was supposed to have collected between December 2005 and December 2008.

Comptroller Susan Combs has said Texas loses $600 million a year to online businesses like Amazon that do not collect sales taxes.

Amazon said the tax assessment had no merit and said that if the Comptroller persisted, the company would pack up and go. Not only would more than 100 jobs be lost, but another 1,000 jobs in a promised expansion would never be realized.

Gov. Rick Perry weighed in, saying he thought the Comptroller had made an error in her assessment of the tax code in this case.

Harper-Brown, R-Irving, is hoping to clarify with a law that says a company operating a fulfillment or computer center to do its retailing is not required to collect and pay sales taxes. Otto, R-Dayton, wants the tax code clarified in a much different way, saying any physical retailing presence is a requirement for sales taxes.

For Harper-Brown, the issue is jobs in her district. For Otto and Naishtat, it’s about the state getting what it is rightfully owed. The goal, the Statesman says Otto told an Amazon official was not "to drive you out (of Texas) or keep you in. That's a business decision you have to make. But if you're going to have a physical presence, you need to collect our sales tax."

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

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Photo of money by flickr user demimismo, used via a Creative Commons license.
Voters' reactions to ethics scandals hard to predict
Wednesday, Sep 29, 2010, 01:15PM CST
By Mark Lisheron

Is political scandal a killer at election time?

Texas Tribune's smart, exhaustive survey today of state politicians in trouble concludes with an emphatic shrug of the shoulders. When it comes to running afoul of ethics rules, the law or the Internal Revenue Service, the political consultants here agree that the consequences are dire. Sometimes. Well, maybe. But it depends.


The analysts say the effect of a scandal on the future of a candidate depends on three Ts: timing, or how close to the election the malfeasance is discovered; turnout, or whether the race was originally expected to bring lots of voters to the polls; and tradition, or how impregnable a wall the candidate's incumbency has built.


vote here

The story reviews the circumstances behind ethics allegations against Rep. Linda Harper-Brown, whose political opponents have dubbed Linda Harper-Benz for having driven a $56,000 luxury car with a similar brand name owned by a company with state transportation contracts and given to Harper-Brown's husband in exchange for contract work.


Harper-Brown, R-Irving, having renounced the Mercedes, may benefit from one of the Ts, timing, having taken her beating back in June, but which may be offset by another, the turnout of what is expected to be a close race in a swing district.


Rep. Joe Driver, R-Garland, tells Texas Tribune he thinks the third T, a tradition of 17 years in the House serving people around whom he was born and raised will trump what he says was a mistake he made for years billing taxpayers and his campaign for the same travel expenses. All has been repaid, Driver says, as he awaits a decision by the Travis County District Attorney's office on whether or not to pursue criminal charges against him. 


To demonstrate how serendipitous this whole scandal thing is, there are the cases of former representatives Gene Seaman of Corpus Christi and Toby Goodman of Arlington. Both were dogged by allegations of improper rental arrangements with their property owning spouses and both lost reelection bids. In 2007, a year after Seaman was defeated, good government advocates challenged the same sort of rental arrangements of longtime state Senate stalwarts Kim Brimer, R-Fort Worth, and Jane Nelson, R-Lewisville.


You could say that Nelson survives today because of the tradition T. But Brimer lost in 2008 in spite of tradition and in spite of filing an ethics complaint of his own against the eventual winner, Wendy Davis. Goodman, too, lost in spite of tradition while Seaman never had it.


But in each case and that of Harper-Brown, too, the defining issue was spelled S for spousal and L for loophole. Despite all the protestations, the state Ethics Commission has no history of dunning lawmakers for their spouse's property, income, compensation and gifts if they have, as the Legislature so cleverly wrote it, no actual control over it.


To make things even more strenuously contingent, to the three Ts, Texas Watchdog would add two Ps: Politics and Process. If, on the campus of Animal House's Faber College, every Halloween the trees are filled with underwear, so every election cycle the Ethics Commission is jammed with ethics complaints against incumbents filed by the operatives of their opponents. In each case voters are faced with deciding what is an ethical breach and what is the smokescreen of politics.


The best of Texas Watchdog hopes are pinned on a general electorate guided by process. In each case a scandal is based on allegations. Even though a politician might appear to be guilty by association with his or her chosen profession, the politician is not guilty by accusation, but innocent until proven guilty. More often than not, Ethics Commission rulings come long after elections are decided.


What putting all these Ts and Ps together spells, particularly without the aid of vowels, may not foretell what scandal might mean for candidates this November and sounds distinctly like trying to expel a fuzzy from the tip of the tongue. Or as Dean Rindy, a Democratic media strategist, told Texas Tribune with an air of finality, “It can kill you, or you can skate by," Rindy says. "Every situation is unique."

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

Photo of a 'Vote here' sign by flickr user Lester Public Library, used via a Creative Commons license.

Many Texas lawmakers mix public, private business
Monday, Sep 27, 2010, 08:30AM CST
By Steve Miller

"Just because it's illegal doesn't make it unethical, and just because it's legal doesn't mean it's ethical."

So says Austin lawyer Ed Shack, speaking of the state lawmakers who run afoul --- not of state ethics laws, but rather of commonsense ethical practices that should govern the tricky blend of personal business and public politics. 


In 1991 Shack helped develop the rules and procedures for the Texas Ethics Commission, and he has seen more than his share of accusations and misdeeds; Shack often represents officials accused of violations before the commission.

Capitol

He works within a system of laws that have been developed and approved by Texas lawmakers. They sometimes ignore those rules, and more often those rules are constructed to allow behavior that is ethically dubious yet perfectly within the bounds of law. The bag-of-cash exchange that was once thought to symbolize political mischief is not defunct, of course, as ex-state Rep. Terri Hodge might attest.

More frequently, some state legislators simply vote for a bill that allows their private business to gain an advantage or otherwise entangle their public and private interests. Lawyers are able to drum up business while in Austin, landlords can craft legislation that will benefit them, and investors can get insight into state business.


All such activities are legal, although most citizens and watchdog groups contend they are hardly right.


The complaints against state Sen. John Carona follow the theme: The Dallas Republican is continually accused of using his political might to construct laws that empower homeowners' associations in the courtroom, which in some cases have the power to set fees, enforce aesthetic rules and levy fines on those in the association. But Carona's involvement in industry legislation appears to put him in conflict with his day job, as owner of Associa, the largest homeowner association management group in the U.S.


Other recent cases:

The Observer drew West's answer from a 2007 story:

"West says he goes to great lengths to remind clients that when they come to visit him, they're not sitting down with a state senator but with a lawyer eager to work on their case and only their case. "I tell people all the time, 'When you come into this office, you're seeing me as an attorney.'" It's easy to see why they might be confused. In West's law office is a nameplate, positioned at the front of the desk, facing potential clients. It reads, "State Senator Royce West.'"

Texas lawmakers are paid $7,200 annually, and most hold down full-time jobs, some of them lucrative and in direct conflict with their state-paid duties.

 

“The best way to view the Texas legislature is that it is a voluntary service, and to see how goofy it is that they are spending much more money to win the election than they get paid in salary and per diem,” said Harvey Tucker, a political science professor at Texas A&M University in College Station. And as evidenced by the list in this story, lawmakers do introduce laws that are tied to their occupation – it’s what they know best.


“If you are a leader, if you are speaker of the House for instance, you need to get people motivated and do the kind of work that they want to and be on the committees they want to be on," Tucker said. "And a lot of time that comes from something in their daily lives.”


The Texas Ethics Commission was created in part to deal with such ethical blurriness.


A Texas Watchdog review of the 850 rulings handed down since the body’s creation in 1992 found that 67 involved sitting state legislators. Another four involved individuals who were no longer held office but were in when their infraction occurred.


The current and former lawmakers included Griggs, Harper-Brown and Paxton. Other potential conflicts, even prominent cases, have escaped the commission's ire.


Stories in the news are not enough on their own for the ethics commission to investigate, said Tim Sorrellsthe commission’s deputy general counsel. And just because something appears amiss, it is not necessarily illegal.


“Clearly we are an enforcement agency, and we are restricted to things that the legislature determines are illegal,” Sorrells said. And those laws are created by?


“The legislature."

Contact Steve Miller at 832-303-9420 or stevemiller@texaswatchdog.org.

Photo of the Capitol dome by flickr user Manuel Delgado Tenorio, used via a Creative Commons license.

Most states require lawmakers to disclose spouses’ income
Tuesday, Jul 20, 2010, 03:40PM CST
By Mark Lisheron

Had she been the state representative from Irwin, Ira or Irving Township rather than Irving, Linda Harper-Brown would have been immune to the ethics complaint recently filed against her.

Harper-Brown’s political opponents have asked the state Ethics Commission to rule on whether she was required to report to the commission as compensation her use of a Mercedes-Benz E550. The car was one of two vehicles given to her husband for his use in exchange for accounting work he had done for a Dallas company.

The member of the House Transportation Committee was criticized for driving a car owned by a company with millions of dollars in contracts with the Texas Department of Transportation,. However, the ethics complaint pivots on whether Harper-Brown’s driving the car constituted something called actual control of a family asset, which would have required her to make a financial disclosure to the state.

But in Irwin, Idaho, Ira, Vt., or Irving Township, Mich., Harper-Brown, R-Irving, would be required by their state laws to disclose nothing. These are the only states in the Union with no financial disclosure requirements, according to a list compiled by the National Conference of State Legislatures and dated March 2008.

Most of the states, 32 of them, require financial disclosure from their elected officials, their spouses and children. Texas is among seven states that require the official to file income and compensation reports and have requirements for spouses, but include specific conditions.

Another eight states require only that the elected official file financial disclosure forms.

For more on this issue, check out these stories:

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

Author of sweeping ethics bill Jim Nugent reflects on political climate around 1973 ethics legislation and spousal loophole

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