The July reporting period sure has been eventful.
Mayoral hopefuls state Sen. John Whitmire and U.S. Rep. Sheila Jackson Lee have accepted campaign donations from city contractors during prohibited periods, breaking a Houston ordinance designed to limit donors’ influence at City Hall.
The law in question bars city vendors from donating to any candidate within 30 days after a contract award. In at least 11 instances, however, Houston’s mayoral candidates accepted donations — totaling $38,000 — from representatives of these companies during blackout periods, according to their latest campaign finance reports and a log of contractors compiled by the city secretary.
Whitmire is involved in five of these cases, three of which concern contributions from Locke Lord, the law firm where he serves as counsel. Jackson Lee also received five such donations, and attorney Lee Kaplan received one. Most of the companies that made the contributions are long-term contractors, and some are frequent donors in local elections.
By law, if candidates have unknowingly violated the ordinance, they have 10 days to return the money. The ordinance defines contractors as donors who are corporate officers and directors or those with a sufficient ownership stake in the business. Out of the 11 contributions, six — totaling $22,000 — had the donors’ names explicitly listed in the city secretary’s logs of prohibited individuals.
Whitmire’s and Jackson Lee’s campaigns acknowledged their mistakes and promised to refund the money. Kaplan’s team said it is still reviewing the documents but would also give back any donation that violates the rules.
This marks the second time this week that the three campaigns have promised to return money they were not supposed to take. Before the latest revelations, they also admitted to receiving contributions that exceeded legal limits, with Jackson Lee expected to return at least $63,800 in excess donations.
Longtime political consultant Nancy Sims said that while candidates should regularly check the city secretary’s contractor list, companies are also responsible for monitoring their blackout periods. Many of these firms’ political insider status makes their infractions of ethics rules even less forgivable.
“You shouldn’t have contributions going to anyone that may be governing when your contract is up for review. The burden should be on the contractor to alert the candidates,” said Sims, now a lecturer at the University of Houston’s political science department. “These are experienced contractors that do lots of business with the city. They should know better.”
“There’s no enforcement mechanism to impose penalty. They’re just going to say, ‘Oh, we didn’t know. We’re going to refund it,’” Sims said. “Whether it’s somebody having over-donated, or it’s a question of how much money can be transferred from other accounts, or the contractor payments, there’s no enforcement mechanism to make all of these rules stick.”
“In any case, these contribution ordinances at the city of Houston need revisions,” she continued. “But they have to wait until after this election for that to happen. So maybe it’s a question voters need to be asking the candidates.”
Chris Bell, a former Houston City Council member, agreed with Sims that the city’s ethics laws need strengthening. As the former Ethics Committee chair, Bell drove a series of ethics reforms about two decades ago, including preventing those who raise money independently of a campaign — so-called soft money — from coordinating with the candidate.
As campaigns grow pricier and fundraising competition heats up, Bell said he sees an increased risk of ethical boundaries being overstepped.
“You really have to avoid a ‘pay to play’ system. If you’re not careful, that’s what you’ll end up with, where only the people who are in a position to give large sums of money are able to get anything done,” he said. “You have to have enough rules on the books so it doesn’t get completely out of control.”
See here for more on the July Mayoral finance reports. I knew about this ordinance, but as with the January non-filers, I don’t remember this being such an issue in past elections. Whitmire’s campaign suggested that part of the problem from their perspective was them juggling two different sets of finance rules between his state and city treasuries. I buy that as a reason, but it was still his choice to run this campaign, so.
I agree with Nancy Sims that much of the responsibility to know and follow this law should fall on the city contractors, who are there every year, unlike the candidates. In the spirit of what she and Chris Bell had to say, I have four points to make:
1. As with the issue of candidates, often first-timers, screwing up some fairly simple things on the finance reports, there ought to be a technical solution to this problem. By which I mean, as long as the city is maintaining a list of its contractors and knows when the blackout dates are, the software for creating and filing the reports ought to automatically check for disallowed donors, as well as for excess donations, missing or incorrect information, and so on. Obviously this has to be developed and tested first, but hey, the next city election will be in 2027. There’s plenty of time to get this project funded and off the ground, with the interim reporting periods available for testing. The main thing it would take to make it happen is a Mayor who pushes for it. Hmm, where do you think we might find such a Mayor?
2. Any review of the existing campaign finance system needs to be holistic, taking everything into account and making sure the whole thing makes sense and is as easy as possible to understand. Words like “byzantine”, “arcane”, or even “complicated” should never be used in talking about it. Avoid just bolting on new regs to the existing system, which is already all of those things. Again, this is a job for a Mayor.
3. No system, no matter how easy to grasp or use, will be effective without consequences for non-compliance. To me, the simplest path forward on that is to put some of those consequences on the donors themselves. Possibilities include banning them from making contributions for a cycle or more, or in the case of contractors ban them from doing business with the city for some period of time. I guarantee you, with the proper consequences, enforcement and compliance will be much easier.
4. That said, we have to be careful to not overreach. Neither SCOTUS nor the Texas Supreme Court are likely to be very sympathetic to regulatory overreach here, given Citizens United and the general anything-goes philosophy of campaign finance in this state. Chris Bell can testify to personal experience with that, given the elimination of the previous campaign contribution blackout in the city. Push for what will work, what will make compliance easier and simpler for everyone, and it can work. Push past that and risk a lawsuit you’re likely to lose, which will end up simplifying the rules by getting rid of most if not all of them.