Years after Rick Perry defunded the Public Integrity Unit, Texas may revive part of it

^{Editor's note: This story was updated March 31 to include comments from Don Clemmer with the Travis County District Attorney's office.}

^{*Correction appended.}

A lot has happened since 2013, when then-Gov. Rick Perry followed through on a threat to veto $7.5 million in funding for the state’s Public Integrity Unit, which investigated public corruption and was housed in the Travis County District Attorney’s office.

Perry was indicted on charges he abused his office, and he ran a failed campaign for president before a court dismissed that indictment. Now he’s U.S. energy secretary. And Rosemary Lehmberg, the district attorney whose drunk driving arrest spurred the veto threat, has a successor: Margaret Moore, a fellow Democrat.

Amid all that, Texas lost more than just a venue to investigate alleged wrongdoing by elected officials, the public integrity unit’s most politically contentious function. It also lost resources to prosecute — and recover millions of dollars from — folks who defraud government programs.

Now, lawmakers are considering reviving a special prosecuting unit in Travis County, this one wholly focused on fighting fraud.

In a budget proposal approved Wednesday by the House, Travis County would get about $4.8 million over two years to prosecute fraud against insurance companies and state government. The Senate's proposed budget would not provide the funding. 

Delivering that funding would rejuvenate efforts to recover millions of dollars by prosecuting fraudsters, Travis County officials say.

“There’s more state programs than you could possibly imagine that dole out money to people, and whenever you have state programs, you’ve got somebody who wants to commit fraud against them,” said Gregg Cox, director of operations and former head of special prosecutions in Moore’s office.

Cox said Travis County’s loss of funding also cost the state by limiting efforts to prosecute tax fraud, welfare fraud and theft across Texas government.

From 2012 to 2013, the Public Integrity Unit’s last two years with funding, it recovered nearly $1.2 million in state government fraud cases, county records show. The unit also recovered nearly $460,000 from insurance fraud cases and $150,000 from motor fuel tax fraud.

The county has since turned away such cases — sometimes leaving investigations to state agencies, counties with fewer resources or no one at all. And the unit dropped some of its longer-term investigations, including a high-profile probe related to the software firm 21st Century Technologies Inc., whose Texas Health and Human Services Commission contract award shook up the agency and spurred lawmakers to overhaul state contracting processes.

“Now with a new administration, a new DA, maybe things will be a little different,” said Cox about the funding situation. “We weren’t asking for or interested in trying to establish a public-corruption type function.”

In its heyday the public integrity unit, generally led by a district attorney who was a Democrat, was best known for its work on cases involving Texas politicians, sometimes drawing the ire of Republicans — like Perry. And the Legislature last session changed the way such cases are handled, giving the Department of Public Safety's Texas Rangers division a first chance to look over complaints against public officials, with prosecutions handled in their home county.

The House’s proposal this session wouldn’t touch that process, but it would fund a Travis County “fraud unit" that would split $4.8 million evenly between insurance and state government cases.

Rep. Oscar Longoria, a Democrat from Mission who leads the House subcommittee that writes that part of the budget, said he recalled seeing figures suggesting it was a good investment.

Sen. John Whitmire, D-Houston, tried to attach a similar provision to the Senate budget but was surprised to find it effectively left out of the proposal the chamber approved this week — sitting on a “wish list” of unfunded items at the end of the document.

“It’s on life support" in the chamber, Whitmire said.

Should the proposal emerge from negotiations between the chambers, Travis County officials believe Gov. Greg Abbott will support it, based upon their meetings with his office. That's despite Abbott's high-profile move earlier this year to cut off $1.5 million in funds to Travis County for other purposes, penalizing the county for what he has described as a "sanctuary" policy on immigration. 

Don Clemmer, who leads the county's special prosecutions division, said his office would not have asked budget writers in the legislature for the fraud unit funding if he believed Abbott would not support it.

Abbott's office did not respond to requests for comment. 

Read more coverage: 

• Greg Abbott called on the 2015 Legislature to reform itself with new ethics laws, and reform it did: It created one set of procedures for politicians and another for everybody else.
• Local prosecutors are responsible for pursuing cases targeting fuel tax theft after the public integrity unit's motor fuels tax fraud division shuttered. Some are concerned that criminals will see less of a deterrent to fuel tax fraud schemes.
• Responding to a request by the Texas Department of Public Safety to renew an investigation into the department’s border security contracts, the head of the state’s anti-corruption unit said that it was not equipped to continue the investigation.

Correction: A previous version of this story incorrectly described the Texas Senate's handling of a proposal to fund a statewide prosecuting unit in Travis County focused on fraud cases.