The Public's Right to "No"Andrew Wheat | April 07, 2006 | Andrew Wheat
It was as if the Taliban had commandeered Austin’s premiere strip joint: The Texas Ethics Commission, the very state agency created to service the body politic’s right to know, orchestrated a cover up of unknown proportions.
The dustup started late last year when beleaguered Texas Employees Retirement System (ERS) trustee—and GOP power broker—Bill Ceverha reported in a routine public disclosure filing that he had received a “check” as a gift. Ceverha stopped there, failing to disclose the value of this check. Given that it came from Houston homebuilder Bob Perry— Texas’ top political donor who gives Texas Republican PACs and candidates $4 million each election—Ceverha’s mystery check could have contained oodles of zeroes.
In January, Texans for Public Justice filed a complaint with the Texas Ethics Commission, arguing that Ceverha’s failure to report the amount of that check violated his obligation under Texas law to provide a “description” of any gift worth more than $250.
In response to the complaint and a subsequent appeal, the Ethics Commission twice ruled in Ceverha’s favor—arguing that public officials need not quantify the gifts they receive. For the Ethics Commission, this was an act of bureaucratic self-negation. Why bother having a disclosure agency that sabotages public disclosure?
Fittingly, the Ethics Commission issued these rulings from behind closed doors. On March 23, agency commissioners secretly made their second and final ruling in favor of Ceverha’s nondisclosure. The very next day, they convened a public meeting on the subject. They held this hearing even though the public had yet to learn that the commissioners had just issued a final ruling the day before that made Ceverha mystery money an acceptable “disclosure” standard for cash gifts to Texas officials.
The ultimate question addressed at the public meeting: Should the commissioners issue a ruling that clarifies whether public officials must disclose the value of large cash gifts? This question confused government watchdogs, who believed that existing rules already require such disclosure. They saw no need for clarification provided that the commission interprets the existing rules reasonably. Yet the commission now convening this bizarre public discussion—before the public knew the content of the commission’s newly minted final ruling—already had ruled in favor of Ceverha’s nondisclosure at least once.
Such weirdness left people entering the meeting uncertain about how to handle Texas’ ethics czars. Commission Chair Cullen Looney quickly dispelled these doubts. Appointed by House Speaker Tom Craddick (R-Midland), Looney railroaded the meeting. He repeatedly cut off discussions related to Craddick pal Bill Ceverha and even interrupted discussions about what the existing disclosure rules mean.
Looney insisted that the sole question before the assembly was whether the commission should attempt to clarify whether public officials must disclose the value of cash gifts? In the Looney mind, this seemed to be a yes-no question utterly divorced from the case that raised the question in the first place. This Looney framing of the issue convinced the audience that these commissioners really did need to clarify this disclosure standard—at least in their own minds.
Looney’s boorish handling of public speakers, starting with Austin attorney Buck Wood, shocked the watchdogs and media in attendance. Longtime Texas Common Cause Director Suzy Woodford sputtered, “This is not the Ethics Commission I know.” Harvey Kronberg dubbed the commission’s behavior “Kafkaesque” in his online Quorum Report.
Four of the seven commissioners attending the meeting voted to have their agency formally determine whether Texas’ disclosure standard for cash gifts truly is as meaningless as the commission’s Ceverha rulings suggest. Yet this motion failed under commission rules that require a supermajority for passage. The default result was that the Texas Ethics Commission had just invited every state official to pull a Ceverha.
Attendees lambasted the commission. Texans for Public Justice Director Craig McDonald, who filed the Ceverha complaint, said this loophole allows a public official who receives an armored truck full of cash to report the gift as simply “a truck.” Rep. Lon Burnham, D-Fort Worth, warned that an official who accepted a mansion as a gift could just report receipt of “a thing” or “an it.” Woodford said the loophole even endangered campaign finance disclosures. She warned that a big donor, like Bob Perry, could make large, undisclosed cash gifts to candidates who then could accurately, yet misleadingly, report that they are self-financing their own campaigns.
Ceverha himself is the longtime political operative for a major funder behind Speaker Craddick’s throne: Dallas oil tycoon Louis Beecherl Jr. Ceverha’s job put him in the line of fire. He served as treasurer of Tom DeLay’s now-indicted Texans for a Republican Majority PAC (TRMPAC), which helped orchestrate Craddick’s 2002 speaker election. Craddick then appointed Ceverha to his speaker-transition team and subsequently to the board of the Texas Employees Retirement System, which directs $21 billion in state investments.
Ceverha has said that Bob Perry gave him the mystery check to pay legal bills that he incurred defending himself in a civil lawsuit prompted by TRMPAC’s 2002 machinations. The state district judge in that case issued a $196,600 judgment against Ceverha in 2005 after finding that he, as TRMPAC’s treasurer, failed to disclose $600,000 in illegal corporate contributions to the Ethics Commission. Although Ceverha declared bankruptcy to dodge this judgment, he has said that his related legal bills were four times the size of the judgment itself.
Ceverha’s bankruptcy—filed before his own party’s punitive federal “bankruptcy reform” took effect—spawned additional legal expenses by reviving the TRMPAC litigation in federal bankruptcy court. Now the five Democrats who sued Ceverha after losing 2002 House races to TRMPAC-backed candidates are creditors; they and their attorneys are trying to recover their court-ordered judgment from Ceverha. Meanwhile, after Ceverha filed for bankruptcy, Rep. Burnham, Texans for Public Justice and others called for his removal from state office.
Critics argue that a financial deadbeat should not oversee a $21 billion state pension fund.
In paying for his violations of one political-disclosure law, Bill Ceverha effectively shredded another. He could not have done so without the Ethics Commission’s aid. It is hard to believe that the commission would have gone through such painful contortions for just anyone. Since 2001, Ceverha patrons Bob Perry and Louis Beecherl have contributed $1.9 million to the three GOP politicians who collectively appointed all of the ethics commissioners. During this same period, Bob Perry and Louis Beecherl contributed an additional $1.8 million to Texas’ state Republican Party.
Bill Ceverha is the first flunky to take the bullet for Texans for a Republican Majority’s illegal intervention in Texas’ 2002 election. If Texas’ top donor was willing to help pay Ceverha’s legal bills—and if Ceverha didn’t want to disclose the magnitude of Bob Perry’s gift—then apparently the least that the Republican leadership could do was to obliterate the public’s right to know about it. That’s exactly what their ethics appointees did.
Andrew Wheat is research director for Austin-based Texans for Public Justice.