Ethics Complaint Against Carona Dismissed, Lawyer Says

Updated, Dec. 11, 4:35 p.m.:

A sworn ethics complaint against state Sen. John Carona has been dismissed, his lawyer said Wednesday.

Paul Reyes, general counsel for Carona's main company, Associa, said in an email that the Texas Ethics Commission rejected the complaint "for technical and substantive reasons."

The student who filed the complaint, Joshua Mark Morales, did not immediately return a phone call from the Texas Tribune Wednesday afternoon. Carona had called the complaint a "stunt" by his 2014 Republican primary opponent, Dallas businessman Don Huffines.

Original Story:

State Sen. John Carona, R-Dallas, is the subject of a sworn ethics complaint about businesses he allegedly failed to disclose as required, including a company tied to the warehouse where he has been keeping his vintage car collection. 

Carona called the complaint, filed last week by a third-year dental student in Dallas, a politically motivated “stunt” by his Republican primary opponent, businessman Don Huffines. Carona said the companies did not have enough activity to meet the threshold for disclosure.

“There is no merit to the complaint,” he said.

The student who filed it, Joshua Mark Morales, described himself as a Republican voter who lives in Carona’s district. He said he had no ties to the Huffines campaign but opposes Carona's re-election.

When asked if the Huffines campaign was behind the complaint, spokesman Matthew Langston said, "We aren't the only people in Texas that know of his corruption." He did not respond to a question about whether the campaign helped Morales in connection with the complaint.

Several of the companies listed on the sworn complaint are old, inactive entities that have since been folded into Carona’s main business, Associations Inc., known as Associa, the largest manager of homeowners associations in the United States, the senator said.

But one of them, 8201 Sovereign Row, LLC, is connected to the warehouse that has been home both to Associa’s software development center and to the senator’s vast vintage car collection. Just how the companies are related to each other isn’t clear — and neither Carona nor his lawyer would explain — but the name of the undisclosed entity matches the address of the warehouse. According to Dallas County property records, the building is owned by JJC Holdings, another one of the senator's companies.

During an interview with The Texas Tribune several months ago, Carona, who is listed as the sole manager of 8201 Sovereign Row, LLC, was asked why he did not include it among the dozens of companies listed on his personal financial statement. He initially said 8201 Sovereign Row was a unit of Associa, but his office later clarified that it was not a subsidiary. He said Associa rents a portion of the warehouse from a company he heads.

State ethics law requires elected officials to list “all beneficial interests in real property and business entities held or acquired” during the reporting period. It also requires disclosure of any positions on a board of directors or “executive positions” held in any company.

The complaint alleges that Carona violated ethics law by failing to name 8201 Sovereign Row, LLC, and other companies, most or all of which appear to be entities that were consolidated under the Associa umbrella.

Associa’s general counsel, Paul Reyes, said that when Carona responds to the ethics complaint, he will demonstrate that no violation occurred. He said the companies had no assets or reportable financial activity, but declined to elaborate or answer specific questions about the entities.

“We’re confident we’ve complied with the rules and we’re filing a response,” Reyes said.

When the Texas Ethics Commission gets a sworn complaint, the agency conducts a study to determine whether it has jurisdiction to investigate, a process that can take up to five days. If a review by the agency is launched, the person targeted by the complaint has between 10 and 25 days to respond, depending on the severity of the allegation.

Ethics officials say that sworn complaints take 180 days on average to resolve.