Tuesday, October 07, 2008

State disclosure laws make it easy for lawmakers to conceal potential conflicts of interest

Lax state laws allow cozy lobbyist-lawmaker ties


Associated Press
Copyright 2008

Texas House Speaker Tom Craddick is in business with a lobbyist but can't say who. Fellow Rep. Sid Miller finally disclosed his lobbyist dealings, but only after someone complained.

And then there are Reps. Kino Flores and Jim Murphy: their day jobs intersect with state government interests but their state disclosure forms don't say that.

The four state legislators are not the only Texas politicians whose personal business interests have sparked scrutiny. Texas has a part-time "citizen Legislature," so state lawmakers need regular jobs, too.

But some legislators take jobs that coincide with state business, a tie government watchdog groups say creates too-common conflicts of interest that should at least be fully disclosed, if not barred outright.

"The ethics laws in Texas and other states are there so that people can decide whether these elected officials are acting in our best interest or in their own best interest," said Jennifer Peebles of Texas Watchdog, a non-partisan group focusing on government transparency and ethics. "In these cases it sounds like the public doesn't know anything about it."

Craddick, a Midland Republican who wields tremendous influence in state government, revealed in recent disclosure filings that he and a registered lobbyist have common business interests. The law requires he list the company involved — in this case development company Centro Caswell, LLC. But Craddick isn't required to name the lobbyist. And his spokeswoman, Alexis DeLee, said Craddick doesn't know who it is.

"The general partners informed him that one of the partners — not one of the general partners — is a lobbyist," DeLee said. "The speaker does not know who it is. Therefore there is no conflict of interest."

Miller, a Stephenville Republican, has ownership in a political and commercial phone bank company that was co-founded by A-list lobbyist and consultant Todd Smith. More than half of Miller's campaign expenditures since 2000 — $576,000 — have gone to Smith, and some of that went into one of the companies they both own shares in, E-Communications Advantage.

Miller and Smith's business relationship isn't illegal but he's supposed to disclose it — and didn't. Miller corrected his disclosure forms on Sept. 25, the day after a supporter of his Democratic opponent signed a complaint filed with the Texas Ethics Commission.

"It was an oversight," Miller told The Associated Press. "I'm not perfect."

Smith said he saw no conflict in a lawmaker paying a consultant who invested in the same company with the lawmaker while lobbying the Legislature.

"I don't know why that would be a conflict," Smith said. "They (the phone bank company) do good work. I also try to buy products from companies I own stock in." The two men also own shares together in an Internet start-up called E-Campus Nation, Miller said. Even Miller's corrected disclosure forms don't mention Smith by name, and there's nothing in the law that requires it.

Craig Holman of the liberal watchdog group Public Citizen called the failure to provide details of lawmaker-lobbyists deals "almost pathetic."

"If there is an actual business relationship between a lawmaker and a lobbyist and that relationship does not get disclosed to the public, that just cries for resolution," he said. "That is a major problem."

An Austin grand jury slammed the state's weak disclosure rules in 2006. The panel, in a rare public report, complained that it couldn't get to the bottom of corruption allegations against an unnamed "high-profile" public official because of toothless Texas ethics laws.

"We have become aware, then outraged, by the 'loopholes' and 'vagueness' which seem to be common for self-serving legislative laws and codes," the 2006 grand jury report said. "Public officials . . . are allowed to hide behind the lax and vague codes."

The panel highlighted a controversial but common — and legal — practice: listing self-employment as an occupation without specifying clients or major sources of income.

Flores, D-Palmview, told AP he has worked as a management consultant for the last 10 years for McAllen-based D. Wilson Construction. The company has received large state contracts for university buildings and other projects.

At least two of D. Wilson's state contracts — for a birding center and a veterans cemetery in Mission — were made possible by legislation Flores sponsored, records show. Flores saw no conflict because the law doesn't require that he list individual clients or major sources of income. And he hasn't done so since 2006, records show.

"If you're not an employee . . . that's what we were advised to do," Flores said.

Non-employee status was cited by another legislator, Republican Jim Murphy of Houston. Murphy serves both as a state legislator and general manager of the Westchase District, a state-created economic development agency that has the power to levy property-tax assessments on commercial property. But his financial disclosure lists Murphy's employer as District Management Services, a consulting business that relies mostly on his work with Westchase.

Though the state constitution prohibits legislators from collecting pay from two state entities, Murphy said an attorney general's opinion blesses the arrangement as long as he is considered a contractor and not an actual employee.

Murphy makes $240,000 a year from the Westchase District, and $7,200 a year as a state representative.

Murphy said since becoming a legislator and Westchase contractor he no longer does hiring or firing — and doesn't sign the checks. But internal documents show the only change in the before-and-after organizational chart is his title, which went from "president" to "general manager."

Also unchanged: He remains the Westchase C.E.O, still "oversees operations" and continues to represents the board externally.

Murphy said he sees no conflict in working for two state entities but would support enhanced disclosure in the Legislature.

"I'm a pretty big fighter for accountability and transparency," he said.

© 2008 Associated Press: www.ap.org

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