Just over three months after Gov. Greg Abbott challenged lawmakers to “dedicate this session to ethics,” lawmakers may be within reach of crafting the most comprehensive set of ethics reforms in a generation.
But as legislators move through the final full week before their June 1 adjournment, they still face steep differences between competing ethics bills in the House and Senate, including a showdown over efforts to require the reporting of now-undisclosed “dark money” contributions by politically active nonprofits such as Empower Texans.
“This will be one of the cliff-hanger bills of the session,” said Tom “Smitty” Smith, Texas director of Public Citizen, one of nearly a dozen organizations in a coalition that has pressed for ethics reforms in response to Abbott’s declaration to lawmakers in his State of the State Address in mid-February.
Battle lines are being drawn between two sharply different versions of Senate Bill 19, an omnibus ethics package aimed at meeting Abbott’s call to increase government transparency and strengthen prohibitions on conflicts of interests by lawmakers and other office-holders.
A House version of the bill scheduled for debate on the House floor today includes the so-called dark money disclosure provision. Sen. Van. Taylor, R-Plano, the bill’s Senate sponsor, has criticized the provision as an encroachment on free speech, saying it echoes one of the “central campaign tenets” of Democratic presidential candidate Hillary Clinton.
The Texas Anti-Corruption Campaign, composed of 13 organizations, including Public Citizen, Common Cause, Texans for Public Justice and the Texas Libertarian Party, has thrown its support behind the House measure. But Tony McDonald, general counsel for Empower Texans, an influential conservative group that has figured prominently in the debate over dark money, denounced it as “a Frankenstein Monster of bad ideas.”
While the two versions of SB19 are similar in many respects, they also take a number of other different directions in addressing the governor’s call for ethics reform. The House, for example, features a “pay-to-play” provision requiring the governor’s appointees to disclose their political contributions to the governor, addressing a central theme of criticism by watchdog groups during former Gov. Rick Perry’s 15 years in office.
The Senate, in turn, calls for a two-year “cooling off” period before legislators can become lobbyists, a provision that was dropped from the House bill. The Senate would also require elected officials to take drug tests but House State Affairs Committee Chairman Byron Cook, architect of the House version of SB19, dropped that provision as well, asserting that he won’t require public officials to “pee into a cup.”
More than 25 other measures offering single-shot approaches at ethics reform were also also still in play going into the final week of the session, some of which could be incorporated into the larger measures. Nearly a third of the bills are being pushed by Tarrant County lawmakers, including Rep. Charlie Geren, R-Fort Worth, whom Abbott designated in his State of the State Address to lead the ethics charge in the House.
“I think he just needed a name to put in his speech,” Geren mused last week. Nevertheless, the Fort Worth lawmaker has authored at least 10 ethics measures this session, including lowering the threshold for disclosing legislative beneficiaries of wining-and-dining by lobbyists, a provision that is now part of SB19.
With adjournment less than a week away, Abbott’s hopes for meaningful ethics reforms rest heavily on the fate of the multifaceted omnibus measure, which appears almost certain to be played out in a House-Senate conference committee charged with negotiating differences between the competing bills. He described the Senate bill as “a meaningful ethics reform package” but has not issued a statement on the House bill.
Taylor, whom Abbott picked as his Senate point man on ethics, downplayed the potential obstacles in a brief interview Monday, saying that he hopes to build on the similarities in the two versions of SB19.
“There’s some definite agreement between the two chambers,” he said. “I’m hoping we can focus on the areas of common agreement and come up with something that strengthens the relationship between people who are elected and their voters.”
But the House bill’s inclusion of the dark money provision sets up a confrontation between those calling for greater scrutiny on donations to politically active nonprofits and those who condemn such disclosure as an affront to the First Amendment.
A bill that Geren sponsored in 2013 requiring certain tax-exempt nonprofits to disclose their donors passed the Legislature but was vetoed by then-Gov. Rick Perry, who said it would have “a chilling effect” on freedom of speech and association.
Organizations with nonprofit tax-exempt status under Section 501(c)(4) of the Internal Revenue Code can make unlimited expenditures for ads for or against candidates and aren’t required to reveal their donors.
In May of 2014, Texans for Public Justice, a liberal watchdog group, reported that Empower Texans, a non-profit that has sought to elect conservative Republicans over moderates loyal to Texas House Speaker Joe Straus, spent $515,707 at that point in the election cycle, accounting for 57 percent of the state’s $912,339 in direct political expenditures.
Under the House version of HB19, groups that make in excess of $25,000 in political expenditures would be required to disclose donations of $2,000 or more.
Free speech issues
Dark money contributions came under the scrutiny of Cook’s State Affairs Committee in an interim study following the 2013 Legislature. In a Jan. 8, 2015, report, the committee said that the pattern of anonymous donations and expenditures “corrupts the free democratic process for everyone” and called for legislation to crack down on the practice. But U. S. Sen. Ted Cruz criticized the committee’s efforts in words similar to those of Perry, saying requiring outside groups to disclose their political donors would “unconstitutionally chill free speech.”
Cook, interviewed Monday, said the dark money provision is “overwhelmingly” supported in the House, noting that more two-thirds of the 150 House members were co-authors on a separate bill requiring the disclosure of donors to politically active nonprofits. “It’ll be interesting to see who in the House is for dark money because overwhelmingly the House is opposed to it,” he said. “The public has a right to know who’s influencing elections so they can make an informed decision. “
Abbott’s inclusion of ethics as a legislative emergency item has put lawmakers on a trajectory toward the most extensive set of ethics reform since 1991, when then-Gov. Ann Richards pushed through and signed legislation creating the Texas Ethics Commission, toughening bribery statutes and outlawing lobby-paid pleasure trips for lawmakers.
The Sharpstown Stock Fraud Scandal that rocked state government in the early 1970s led to sweeping reforms in the 1973 session, including regulations on lobbyists, requirements for public officials to reveal personal financial information and open meetings and open records laws that are considered among the best in the country.
Abbott first called for ethics changes as a candidate in the 2014 governor’s race. In a Bicentennial Blueprint that established the foundation for his policies as governor, Abbott outlined specific proposals that have since become bills designed to strengthen public scrutiny of elected officials and eliminate conflicts of interests in the Legislature.
HB1294 by Rep. Giovanni Capriglione, R-Southlake, which requires elected officials, candidates and party chairs to reveal contracts with government entities, is similar to one of Abbott’s proposals.
Geren’s HB1532 tracks the governor’s proposal to require elected officials and candidates to file quarterly reports of political donations and expenditures. The current system, requiring less frequent semi-annual reports, is “insufficient” and leaves voters “poorly informed as to what parties are financing a campaign,” Abbott said.
At least one proposal seeks to prevent a recurrence of a practice by Abbott’s predecessor. HB408 by Rep. Chris Turner, D-Grand Prairie, which was pending in the Senate after being approved 144-1 by the House, would prevent state elected officials from drawing state pensions and paychecks at the same time.
Turner first introduced the measure in 2013 following a Texas Tribune report that Perry officially retired in 2011 while still in office to collect a monthly retirement annuity of $7,698. The double-dip boosted Perry’s annual salary to $240,000.
“A politician shouldn’t get paid twice for doing one job,” said Turner.
Tarrant members’ legislation
Tarrant County lawmakers have a stake in nearly a third of the roughly 25 ethics-related bills that show potential of clearing the Legislature, either individually or as part of a larger measure, in the final week of the 2015 session.
HB1532: Rep. Charlie Geren, R-Fort Worth. Strengthens reporting requirements for political candidates by requiring quarterly donation and expenditure reports, instead of semi-annually. Passed House 145-1. In Senate committee.
HB3682: Geren. Restructures the Texas Ethics Commission’s process for handing violations into a new three-tiered system that would enable the watchdog agency to give greater priority to more serious violations. Passed House. 140-0. In Senate committee.
HB3683: Geren. Modernizes the filing of personal financial statements with ethics commission by requiring state officials and candidates to electronically file the documents, now delivered by hand or mail. Passed House 134-0. Approved by Senate committee.
HB1294: Rep. Giovanni Capriglione, R-Southlake. Requires elected officials, candidates and party chairs to reveal contracts with government entities. Co-authors: Geren, Rep. Craig Goldman, R-Fort Worth. Passed by House 142-0. In Senate committee.
HB1295: Capriglione. Senate sponsor: Sen. Kelly Hancock, R-North Richland Hills. Requires the disclosure of all “interested parties” who benefit financially in contracts with state and local government entities. House Co-author: Geren. Passed House. 135-0. Approved by Senate committee.
SB20: Sen. Jane Nelson, R-Flower Mound. Toughens state contracting controls following allegations of procurement abuses by the Department of Health and Human Services. Passed by House and Senate. In joint conference committee to resolve differences.
HB408: Rep. Chris Turner, D-Grand Prairie. Prevents state elected officials from drawing state pensions and paychecks at the same time, closing a “double-dipping” loophole used by then-Gov. Rick Perry in 2011. Passed by House, 144-1. Approved by Senate Committee.