Commissioner reveals campaign investmentsMillion-dollar disclosure sparks questions about state finance law
By CHASE DAVIS
Copyright 2008 Houston Chronicle
When Harris County Commissioner Jerry Eversole released new campaign finance reports this week, his bottom line reaped a sudden and sizable windfall: more than $1 million in previously undisclosed investments.
Political consultant Allen Blakemore, who was hired by Eversole last month, said he and new campaign bookkeeper Robert Eckels suggested disclosing the investment income, which was stored in certificates of deposit kept at several banks.
Blakemore said the added disclosure was part of the commissioner's effort to be more up-front about his campaign finances, which have come under media scrutiny in recent months for being vague and incomplete.
"(The law) means 'How much money do you have?', so we're going to tell them how much money we have," Blakemore said.
Eversole's reported war chest ballooned from a comparatively modest $475,000 last July to more than $1.8 million earlier this week, in large part due to the investment disclosure.
Local and state political experts say the disclosure shines a light into a dark corner of Texas campaign law -- specifically, how politicians should present investment holdings, and how they are allowed to invest their campaign cash.
"It's certainly one of those loopholes that needs to be clarified," said Tom "Smitty" Smith, head of the Texas office of Public Citizen, a government watchdog group.
State law allows candidates to invest their campaign money, provided interest is rolled back to the account and not converted for personal gain. The law also says politicians must disclose the sum total of money held "in one or more accounts in which political contributions are deposited."
But whether those accounts include stocks, bonds or certificates of deposit has not been explicitly outlined, said Tim Sorrells, deputy general counsel for the Texas Ethics Commission, which regulates state and local campaigns.
"We haven't issued an (official) opinion on that," Sorrells said. "But we have over the years advised people to include that information in their reports."
Politicians rarely invest their campaign cash unless they have exceptionally large accounts, several local political consultants said Thursday.
They also said omitting investment totals from a campaign's balance sheet carries few obvious benefits. Officeholders typically prefer to boast about their large campaign accounts because it helps show strength and scare off challengers.
"There's no advantage to hiding it," said veteran Democratic consultant Marc Campos. "If you have a whole lot of money showing, that's when people won't mess with you."
Candidates sitting on large war chests might benefit from understating their contributions, but such an approach would be unconventional, Houston fundraiser and consultant Sue Walden said.
"If donors see you have a lot of money, they might be hesitant to give as much," she said.
The ethics commission has ruled that politicians can invest their campaign money in certain accounts, but critics say state law offers few requirements about how the details of those investments must be disclosed.
"If politicians (invest), you should see where they're investing, and right now, you don't," said Craig McDonald, executive director of campaign watchdog group Texans for Public Justice. "You don't know whether they're keeping it under the mattress or they're investing in a state contractor."