Could state lawmaker be saved by ethics loophole?
By Jeremy Roebeck
July 26, 2009
PALMVIEW — As state Rep. Ismael “Kino” Flores prepares to fight the criminal charges filed against him, the Palmview Democrat enters a battle he has fought and won before.
It’s a skirmish mired in the gray areas of state ethics rules and one where the points of law are anything but settled.
At issue is whether Flores, who earns his income as a managerial consultant, is required by law to list his clients in his annual financial disclosure forms.
A previous grand jury answered with a frustrated no in 2005. But this year, the Travis County District Attorney’s Office appears to be saying yes, his Austin-based attorney Roy Minton said.
“They’ve been after Kino for a couple of years now,” he said. “And this is the best they could come up with?”
Travis County prosecutors declined to discuss their interpretation of the law, citing the ongoing criminal case.
But in a series of six indictments, they allege Flores hid more than $847,000 in income, property interests and gifts from state ethics regulators over a six-year period — including payments he received from a handful of companies such as Houston-based Dannenbaum Engineering, McAllen Medical Center and Inter National Bank for which he did consulting work.
Flores said in a statement July 17 that he never “intentionally or knowingly violated any state law.” And he may have good reason to cling to that defense.
In an unusual move, the 2005 grand jury authored a report pointing out a loophole in state ethics laws that stymied their efforts to get to the bottom of “obvious misconduct” by an unnamed “high profile” official.
A lawyer from the Texas Ethics Commission had advised the legislator that he need not cite each business that hired him as a consultant on his financial disclosure forms, the grand jury noted.
“This prevents that public official’s constituents from full disclosure of sources of income, and it prevents them from being able to discover possible conflicts of interest,” the panel wrote.
At the time, the memo sparked controversy among state watchdog groups, who argued the loophole violated the spirit of the ethics commission’s charter. But they conceded that without new laws to tighten regulations, lawmakers could legally continue to accept private work behind a curtain that shielded prying eyes.
The grand jury never mentioned Flores by name, but several sources — including Minton — have said that his consulting work was the target of their investigation.
The advice of the ethics commission lawyer — while not a binding legal opinion — suggests Flores might credibly claim he thought he was acting within the law when he left the information off his financial disclosure forms.
The documents — which all elected officials are required to fill out annually — only have space for an officeholder to note who he works for and what his occupation is. Flores’ 2008 report, for example, lists himself as his employer. Under nature of occupation, he put “managerial consultant.”
“I think the ordinary person would hear that he failed to report and think he needed to put who he worked for and how much they paid him,” Minton said. “But there isn’t a requirement that he do so. If he’s an engineer, all he’d have to put down is engineer.”
Several other legislators, such as state Sen. Judith Zaffirini, D-Laredo, and Rep. James Murphy, R-Houston, also listed their occupations as self-employed consultants on their most recently available financial disclosure forms. None named individual clients.
So why was Flores indicted now for behavior that was deemed non-criminal in 2005? Craig McDonald, director of the legislative watchdog group Texans for Public Justice, suspects the difference could stem from the fact that the companies paid Flores directly for his work rather than paying a consulting firm.
“If Kino or any other legislator had a consulting firm, he would not — for the purposes for the state financial disclosure — have to report that money,” McDonald said. “If they are paying him directly, they would.”
The lawmaker owns an Edinburg-based consulting company named Atlas Valley Consultants. But it was established in February 2007 — four years after the first illegal activity alleged in the indictment.
Accusations that Flores also omitted seven different properties he owned or sold from 2003 to 2008 as well as gifts given to himself and his son could prove harder to dispel. But Minton maintains the criminal counts stemming from those charges are weak as well.
On the same day that Flores was indicted, Lt. Gov. David Dewhurst voluntarily amended two years of past financial filings to disclose previously withheld information regarding his stake in several investment funds.
“Mistakes happen,” Minton said. “I am right now representing a number of people in high public office that haven’t put down things that they should. When it’s pointed out, they amend it. They’re not prosecuted.”
Flores currently faces 16 counts of tampering with government documents and three counts of perjury. If convicted, he could face up to two years in jail and thousands of dollars in fines.
Jeremy Roebuck covers courts and general assignments for The Monitor. You can reach him at (956) 683-4437.