A Part-Time Legislature, but in Whose Interest?

This is one in a series of occasional stories about ethics and transparency in the part-time Texas Legislature.

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.”