TMCCP Presents Legislative Update Seminar. August 20-21, 2015, San Marcos, Texas HANDOUTS FOR. Ethics. August 20, 3:15 4:15 p.m.

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1 TMCCP Presents Legislative Update Seminar August 20-21, 2015, San Marcos, Texas HANDOUTS FOR Ethics August 20, 3:15 4:15 p.m. with Ross Fischer Gobers Hilgers Texas Municipal Clerks Certification Program 1155 Union Circle #305067, Denton, Texas fax

2 Ethics: A Legislative Rorschach Test WHAT PASSED FOR ETHICS DURING THE 84 TH LEGISLATURE ROSS FISCHER Without a scandal prompting action what does ethics reform look like to you? An Ethics Emergency? 1

3 What is Legislation relating to ethics? According to the Governor s proclamation o Disclosure of state contracts with elected officials; o Prohibiting lawmakers from voting on legislation from which they would profit; o Increasing disclosure of campaign finance information; and o The catch all Legislation relating to ethics. Each of these was incorporated into some introduced legislation What other ethics proposals were put forward? o Registered lobbyists should not be allowed to run for ANY public office. o Former legislators should have to wait two years before becoming lobbyists (a cooling off period to slow the old revolving door ). o Former Legislators should have to wait two years before making contributions from their leftover campaign funds. o Prohibiting legislators from serving as bond counsel to public entities. o Revoking public pension benefits for elected officials convicted of public corruption. o Requiring people elected to public office to take a drug test (and having the results posted on the Ethics Commission s website). What ethics proposals were put forward? o Broadening the definition of bribery to include a governor appointing someone who contributed more than $50,000 to his campaign during the previous two years. o Making it illegal to secretly tape a legislator, capitol staffer, or Lt. Gov. in the capitol or their district offices. o Requiring members of the legislature to file a copy of the federal tax return with the Texas Ethics Commission. o Prohibiting a legislator or statewide official from being paid for serving on a bank s board of directors. o Public officials deemed to have vacated office upon final conviction of a felony. 2

4 What ethics proposals were put forward? o Making the Personal Financial Statements of elected and appointed officials available online. o Prohibiting legislators and statewide officials that are lawyers from earning a referral fee. o Require disclosure of dark money contributed through politically active non profits. o Expanding detailed reporting by lobbyists for expenditures spent on lawmakers and their immediate families for food and beverages, entertainment, gifts, awards, transportation and lodging. o Changing the standard of review for lobby law cases from de novo to substantial evidence. As varied as these proposals were, they all have one thing in common Dark Money Standoff Many of the proposed reforms found their way (at least in some fashion) into Senate Bill 19. o However, the House modified the bill to require disclosure of contributors who donate to nonprofit corporations for political purposes. o The Senate refused to concur, and made it clear that they would not require disclosure of contributors giving through non profits. o The impasse over the dark money issue resulted in the death of Senate Bill 19 and any comprehensive ethics reform. o Afterwards, the Governor indicated his believe that efforts to require disclosure of those donating through non profit corporations is likely unconstitutional. 3

5 o The end of double dipping. Public officials will no longer be able to collect both a salary and a public pension. Signed by the Governor. o Public officials that file a Personal Financial Statement must now disclose public pension benefits received. Contingency Fees. (Signed by the Governor) o House Bill The provisions of Government Code regulating contingency fees for the sale of goods or services to the state were changed to prohibit independent contractors (aka hired guns ) from being paid on a contingent fee basis. o Previously, for procurements of less than $10 million, independent contractors of vendors could collect a contingent fee. Not anymore. o Bill also requires independent contractors of vendors to register as lobbyists if they are trying to influence purchasing decisions. o The bill doesn t impact full time employees of vendors, who may still take a contingent fee on purchases up to $10 million. ohouse Bill Requires that local governmental entities disclose of all interested parties to a contract, meaning those who stand to benefit financially from the contract. o Applies to contracts that must be approved by a governing body or have a value over $1 million. o Interested parties include a broker, intermediary, lawyer or adviser. o Information regarding interested parties would be filed with the Ethics Commission. o Public colleges would have to disclose each sponsor of academic research when the sponsor pays for more than half of a study. o Signed by the Governor. 4

6 o House Bill Requiring members of state agency governing boards to disclose conflicts of interest and to refrain from participating on matters where a conflict exists; imposes criminal penalties. o Conflict of interest means a conflict between an official decision made by a board member and that individual s private financial interest in which the individual realizes any pecuniary gain. o Financial interest means an ownership interest of at least 5%. o Person with a conflict of interest would be required to disclose the conflict and abstain from participation in the matter; written disclosures would be filed with the Texas Ethics Commission. o Knowing failure to disclose and abstain is a Class B misdemeanor. o However, this bill includes a spousal loophole that would shield from disclosure property held by a public official s spouse. Additionally, a provision was added in the Senate that exempts state agency rule making from the conflict provisions. VETOED BY THE GOVERNOR. o House Bill 23. Increased disclosure of relationships between vendors and local officials. o Revamps Chapter 176 of the Local Government Code; o Defines vendors seeking to contract with local governmental entities; o Extends existing disclosure requirements to public employees who exercise discretion in the contracting process; o Requires that family relationships between vendors and public officers be disclosed (as opposed to just business relationships); o Requires disclosure of certain expenses related to entertainment, transportation and lodging. o Signed by the Governor. o House Bill Codifies Ethics Commission rules and opinions dealing with the requirements to register as a lobbyist. The threshold applicable to the lobby registration requirement provides that if a person spends less than 26 hours of compensated in a calendar quarter communicating (or preparing to communicate) with a member of the executive or legislative branch, that person is not required to register as a lobbyist. Signed by the Governor. ohouse Bill Clarifies the types of activity and property that must be included on a Personal Financial Statement; addresses separate property and the activity of dependent children. Regarded as creating a spousal loophole that would shield from disclosure property held by a public official s spouse. VETOED on June 20,

7 Public Integrity Prosecution (House Bill 1690) Public corruption cases no longer handled by the Travis County District Attorney s office, but will instead undergo a two step process. o Covers offenses under Title 8 of the Penal Code, Title 15 of the Election Code*, and Chapters 301, 302, 571, 572, 573* and 2004 of the Government Code. o Investigations will be handled by a public integrity unit within the Texas Rangers; then.. o Refer case to prosecuting attorney in county of defendant s residence. o Prosecutor may recuse himself/herself, and ask regional administrative judge to appoint another elected prosecutor. o Signed by the Governor on June 18 th So who got ethically reformed? Members of state agency governing boards The Travis County district attorney Local officials Lobbyists Anyone missing? Questions? Ross Fischer rfischer@goberhilgers.ocm 6