Ain’t Nobody’s Business: Lawmakers Flunk Big-Donor Disclosure Table of Contents: I. Summary II. Introduction III. Big-Picture Disclosure A. Republicans Beat Democrats B. Incumbents Beat Rookies IV. Top Mystery Donors V. Legislative Report Cards A. Senate Report Cards B. House Report Cards Intern Omair Khan is the primary author of this report. Texans for Public Justice is a non-profit, non-partisan research and advocacy organization that monitors money in Texas politics and promotes campaign finance and judicial-selection reforms. Texans for Public Justice 609 W. 18th St., Suite E Austin, TX 78701 PH: (512) 472-9770 Fax: (512) 472-9830 [email protected] http://www.tpj.org/ © Copyright Texans for Public Justice, June 2006 2 I. Summary • A campaign reform that took effect in January 2004 requires Texas state candidates to disclose the employer and occupation of individual donors of $500 or more. • The 181 Texas lawmakers elected as of November 2004 reported receiving 14,454 of these large contributions in 2004 and 2005. These contributions added up to more than $17 million. • A standardized test of the contribution disclosure reports filed by these lawmakers found that they adequately disclosed occupation and employer data for just 58 percent of this money. As such Texas lawmakers flunked their own disclosure law. • Performances of individual lawmakers varied wildly. Three senators and eight representatives aced disclosure with scores exceeding 90 percent. Rep. Joseph Deshotel (D- Beaumont) got a perfect score on his disclosure of his sole large donor. Senator Duncan (R- Lubbock) led the upper chamber, with a disclosure grade of 93 percent. House Speaker Tom Craddick got a “C,” disclosing 75 percent of his large contributions. • Three senators and 28 representatives left the occupation and employer fields blank every time they reported a large donation. Sen. Judith Zaffirini (D-Laredo) raised the largest amount of these all-blank big contributions ($226,400). Rep. Kino Flores (D-Palmview) claimed this title in the House, raising $110,100 in big donations with nary an employer or occupation reported. • Republican lawmakers disclosed 64 percent of the $10.6 million in large contributions that they reported, outperforming their Democratic colleagues, who disclosed just 48 percent of their $6.4 million haul. Incumbent lawmakers got a collective 58 percent, a score that is comparable to that of the rookies first elected in November 2004. • Twenty-three lawmakers flunked disclosure on at least one huge contribution of $10,000 or more. Rep. Mark Homer (D-Paris) had little excuse to flub disclosure on the largest poorly disclosed contribution: a $150,000 check from his parents. • Five lawmakers blew disclosure on huge checks from Texas’ No. 1 kingmaker: homebuilder Bob Perry. Four colleagues identified billionaire Wal-Mart heiress Alice Walton—whose $16 billion ranks her as the planet’s 20th richest person—as a businesswoman, investor or rancher. Sen. Kevin Eltife (R-Tyler) tagged aging rocker Don Henley—who helped produce the world’s best-selling album—as a self-employed investor. Rep. Tracy King (D- Batesville) choked on the disclosure of a former Texas governor. 3 II. Introduction A 2003 campaign reform required Texas state candidates to disclose the employers and occupations of large campaign donors starting in January 2004.1 Candidates are required to do so for any individual who gives them an aggregate of $500 or more in a given reporting period. As of January 1, 2005, candidates lacking this information are required to use their “best efforts” to obtain it. The law defines “best efforts” as making at least one documented oral or written request for it within 30 days of the contribution. The Texas Ethics Commission can impose a civil fine on violators of up to $5,000 or three times the amount involved in the violation—whichever is greater.2 Alternatively, the commission can treat incomplete disclosure reports as late reports, which face a civil fine of up to $10,000.3 This report is a first attempt to gauge compliance with this new reform. It analyzes reporting of occupation and employer information by the 181 Texas lawmakers who had been elected as of November 2004.4 In particular, it analyzes every individual contribution of $500 or more that these lawmakers received in calendar years 2004 and 2005 and had reported to the Texas Ethics Commission by mid- January 2006.5 To grade these disclosure reports, researchers devised a standardized test: the Texas Assessment of Contributor Secrecy (TACS). They applied the TACS exam to the 14,454 individual contributions of $500 or more that the lawmakers reported receiving during calendar 2004 and 2005. These large contributions added up to more than $17 million. Working blind to the identities of the recipient lawmakers, researchers graded how well the occupation and employer of each large donor was disclosed. While they tried to grant lawmakers the benefit of the doubt, researchers did not yield to what President Bush calls the “soft bigotry of low expectations.” Contributions with adequate disclosure of the donor’s employer and occupation received full credit. Contributions with adequate disclosure of either the donor’s employer or occupation received half credit. Finally, contributions that left these fields blank or provided inadequate disclosure information received zero credit. Inadequate disclosures are so vague that they obscure the donor’s occupation, employer or economic interest. Common examples include listing a donor as a “self-employed” “investor” or “businessman,” or listing a donor’s industry (e.g. “oil and gas”) as a donor’s occupation or employer. TACS scores generate two kinds of grades based on: 1. The number of large contributions with an adequately disclosed employer and occupation; or 2. The total value of adequately disclosed contributions. The 181 lawmakers studied in this report collectively earned an “F” under both of these grading methods. Reflecting the disclosure law’s recognition that the need for disclosure rises with the amount of money contributed, this report emphasizes disclosure grades based on the total value of big contributions.6 While this report often provides both scores, when only one score is given it is based on value. Under this method, Texas lawmakers earned a failing disclosure grade of 58 percent. The same legislators collectively earned an even lower disclosure grade of 56 percent when graded on the basis of the total number of large contributions that they received. Two Ways To Grade Donor Disclosure Donor Disclosure Employer/Occupation Analyzed By Totals Report Card Number of Big Donations 14,454 F (56% well disclosed) Value of Big Donations $17,025,769 F (58% well disclosed) Covers state legislative donations >$500 during calendar years 2004 and 2005. 4 III. Big-Picture Disclosure The 181 lawmakers analyzed here collectively earned an “F” by adequately disclosing the required occupation and employer data for just 58 percent of the more than $17 million that they collected in large contributions during 2004 and 2005. In fact, lawmakers left both the employer and occupation fields utterly blank for $3,108,111 worth of large contributions—a remarkable 18 percent of the total. There were 31 lawmakers who failed to report the occupation or employer of a single major donor. A. Republicans Beat Democrats Democrats and Republicans both earned horrendous disclosure grades. While Republican lawmakers collectively earned a remedial disclosure grade of 64 percent, at least they did not utterly flunk disclosure—as Democrats did. The collective disclosure grade of Democrats was a pitiful 48 percent. Donor Disclosure Grades By Party Value of Big Donations Number of Big Donations No. of Party Lawmakers Amount Grade Number Grade DEMs 75 $6,420,930 F: 48% 5,576 F: 47% REPs 106 $10,604,839 D: 64% 8,878 D: 62% TOTALS 181 $17,025,769 F: 58% 14,454 F: 56% B. Incumbents Comparable To Rookies Despite their experience, lawmakers who already were incumbents in 2004 earned comparable disclosure grades to the rookies who were first elected in that year. The six new members who won open seats collectively earned a disclosure grade of 59 percent, thereby nosing out the 164 incumbents who scored 58 percent. Meanwhile, the 11 challengers who unseated incumbents in 2004 earned a grade of just 55 percent. Donor Disclosure Grades By Candidate Status Value of Big Donations Number of Big Donations Candidate No. of Status Lawmakers Amount Grade Number Grade Incumbent 164 $15,528,719 F: 58% 13,143 F: 56% Challenger 11 $908,525 F: 55% 819 F: 49% Open Seat 6 $588,525 F: 59% 492 F: 54% TOTALS: 181 $17,025,769 F: 58% 14,454 F: 56% 5 IV. Top Mystery Donors Many lawmakers failed to identify the occupation and employer of donors who gave them five-figure contributions. Indeed, 23 legislators flunked disclosure on one or more contributions of $10,000 or more. Top Mystery Donors Amount Unidentified Donor City The Scoop Recipient $150,000 Molly & Frank Homer Paris Retired Sonic restaurant franchiser Mark Homer $50,000 Bob Perry◊ Houston Perry Homes owner Elizabeth Jones $50,000 T. Boone Pickens◊ Dallas CEO BP Capital; corporate raider Tom Craddick $25,000 Maurico R. Celis Corpus Christi Owen & Associates attorney *Abel Herrero $25,000 Peter M Holt Blanco Holt (tractor) Co.; SA Spurs owner Elizabeth Jones $25,000 Wayne Reaud† Beaumont Reaud Morgan & Quinn attorney *Judith Zaffirini $25,000 Walter Umphrey†◊ Beaumont Provost & Umphrey attorney Judith Zaffirini $25,000 Alice L. Walton◊ Mineral Wells Wal-Mart heiress Tom Craddick $25,000 Alice L. Walton◊ Mineral Wells Wal-Mart heiress Craig Estes $25,000 Alice L. Walton◊ Mineral Wells Wal-Mart heiress Todd Staples $25,000 John Eddie Williams†◊ Houston Williams Bailey Law Firm attorney Judith Zaffirini $15,000 Hon.