Political & Election Law: Texas “Ethics Reform” Legislation Filed and Moving Quickly

Friday, February 10, 2017

As previously discussed on The Gober Group blog, Texas Lt. Governor Dan Patrick has indicated the importance of ethics reform this session, employing the tradition of reserving a low bill number for significant legislation. Senate Bill 14, authored by Senator Van Taylor (R-Plano) and filed on January 25th, was considered at a public hearing a week later and unanimously voted out of the Senate State Affairs Committee on February 2nd. The bill received only positive testimony from the public, including organizations such as Common Cause, Texans for Public Justice, and Public Citizen. On February 7th, the full Senate considered the measure and unanimously passed it to the House of Representatives.

So, what’s in it? The bill, as amended on the Senate floor, includes several significant reforms.

Forfeiture of Public Pension Upon Corruption Conviction. Public officials who are convicted of a “qualifying felony” would forfeit their public retirement annuity payments. “Qualifying felonies” include bribery, perjury, tampering with a governmental record, abuse of official capacity, coercion of a voter or public servant, and the embezzlement, extortion or theft of public funds. The bill provides that, upon conviction, a judge may apportion half of the retirement annuity to an “innocent spouse” as separate property.

Forfeiture of Office Upon Felony Conviction. The bill provides that certain elected officials – namely legislators, the governor, and statewide officials – would be deemed to have vacated their office upon final conviction of a felony offense.

Detailed Reporting of Referral Fees, Government Contracts, and Bond Counsel Work. Under SB 14, public officials would be required to provide more specifics relating to referral fees received as a lawyer, including the date of the referral, the case number (if applicable), and the amount or percentage of the referral fee.

Additionally, officials would have to disclose contracts with governmental entities or governmental contractors. Finally, officials who perform work as bond counsel to government entities would have to disclosed the details of each bond issuance, including the client, the date of the issuance, and the range of the fees paid to the official or his/her firm.

Revolving Door for Lawmakers Turned Lobbyist. SB 14 bars former legislators from becoming lobbyists for two years (one legislative cycle) after leaving office. The bill includes an exception for those who lobby pro bono. Violation of the revolving door provision is a Class B misdemeanor. The bill also prohibits a former lawmaker from making political expenditures from surplus political funds for two years after leaving office, essentially “freezing” the campaign account for a two-year period.

Limiting Lobbyists Ability to Serve in Public Office. The proposed legislation expressly provides that a member of Congress, the Legislature, or a statewide official is prohibited from simultaneously being a professional lobbyist. The bill would also restrict a registered lobbyists ability to seek and hold elected office. The bill imposes a general prohibition on a lobbyists being qualified to seek elected office, but then builds in some “small town” exceptions: a registered lobbyist can serve on the governing board (but not as presiding officer) of an entity with fewer than 150,000 residents and can serve on either the governing board or as presiding officer in a jurisdiction with fewer than 50,000 residents.

Greater Detailed Reporting of Lobby Expenditures. SB 14 makes significant changes to the way that lobby expenditures are required to be disclosed. Currently, only certain expenditures must be “detail reported,” meaning that the lawmakers (or staff) on the receiving end of the expenditure must be identified by name. The detailed reporting threshold is current set at 60% of the legislative per diem. (The current per diem is $190, so the detailed reporting threshold is $114.) That means that expenditures of less than $114 only have to be allocated to a category (say, “house member”) rather than to a specific person. This practice is made easier by the ability of lobbyists to “split” expenses, allowing the total to be divvied up among multiple lobbyists. SB 14 would alter this practice in two ways: first, it would lower the detailed reporting threshold to 30% of the per diem (or $57); and second, it would essentially end the incentive to split expenses by requiring each lobbyist to report the full amount of the expenditure (as well as each lobbyist’s respective share).