By R.G. RATCLIFFE and LISE OLSEN - Houston Chronicle - Sun. Aug. 12, 2007
The Texas Ethics Commission has fined three legislators in the last year for failing to properly disclose credit card expenses charged to their campaigns, but a Houston Chronicle review has found that dozens of other lawmakers have done the same without being sanctioned.
Texas legislators slapped down the plastic to charge more than $1 million in political expenses since January 2005, but failed to disclose who actually received the bulk of the money, nearly $900,000, the analysis shows.
The Chronicle's review of ethics commission records between Jan. 1, 2005, and June 30 found few complying with a 1981 law that requires disclosure of the person or company that receives a credit card payment and the purpose of the expense.
But because the ethics commission only audits candidates when it receives a sworn complaint, most lawmakers have gotten a pass on how they report their credit card spending, the Chronicle found.
The lawmakers who have been fined include:
Rep. Jonn Davis, R-Clear Lake, who received a $1,000 fine last November for failing to explain $42,000 in credit card charges over two years.
And Rep. Edmund Kuempel, R-Seguin, who was hit in June with an $8,500 fine — one of the largest fines to arise from a sworn complaint in the commission's history — for failing to detail $80,800 in political spending during a two-year period.
Belated transparency
The commission's disciplinary actions and related advisories that were sent to candidates have prompted some — such as likely U.S. Senate candidate Rep. Rick Noriega, D-Houston, who had more than $19,000 in unspecified charges — to amend their reports to disclose the details.
The Chronicle found that Sen. Carlos Uresti, D-San Antonio, had the most undisclosed credit card charges, with $88,000 in payments that are detailed only with phrases such as "campaign expenses" or "charges for swearing-in ceremony."
Uresti defeated Sen. Frank Madla in the Democratic primary last year in part by attacking his lavish campaign spending.
Uresti said his disclosure shortcomings arose from a fast-paced political year in which he was charging campaign expenses to his credit card and then raising the money to pay for them. He said he is going through his expenses now to file amended reports.
"It's a tedious task," Uresti said. "It's not like we're trying to hide anything. It has to be done."
Before amending his reports, Noriega had $19,300 in unspecified credit card expenditures. About half of the charges occurred while Noriega's wife, Houston City Councilwoman Melissa Noriega, was serving for him in the Legislature while he was deployed with the National Guard in Afghanistan.
Noriega consultant James Aldrete said Noriega became aware that his reports were not correct when the ethics commission sent out a "tips" sheet in June on common errors in campaign finance reports and how to avoid them, including not detailing credit cards.
Aldrete said Noriega amended the reports as quickly as possible.
"He made a concerted effort to catch up on that."
Since 1981, state law has required politicians to make full financial disclosure of political expenses. When the ethics commission was created in 1991, one of the first things it did was adopt a rule that said: "A report of a political expenditure by credit card must identify the vendor who receives payment from the card company."
When a politician creates a political committee, the treasurer receives a two-page letter from the ethics commission directing that person to the commission's Web site for information on state laws, commission rules and directions on how to fill out the campaign reports.
But the lion's share of credit card charges are still reported merely as payments to American Express, Discover, MasterCard and Visa, among others.
In the 1980s, former Attorney General Jim Mattox broadly interpreted the state law for himself as allowing him to report only his payments to the credit card companies. Mattox said the law was not intended to force politicians to let the media or their opponents know how they were spending their campaign money.
Ethics Commission Vice Chairman Tom Harrison, who was the agency's executive director from 1995 to 2003, said Mattox's attitude is why the commission rule was adopted to clearly spell out how disclosure should be done.
"Just showing Visa or MasterCard for tens of thousands of dollars doesn't show you whether the money was spent on political advertising," Harrison said. "It's kind of like hiding behind the credit card."
'Good library, poor cop'
Campaign finance reform advocate Craig McDonald, director of Texans for Public Justice, said politicians have little incentive to meet the requirements of the law because the ethics commission does not audit reports without a sworn complaint.
"The Texas Ethics Commission is a pretty darn good library, but a pretty poor cop," McDonald said.
Commission Chairman Raymond "Tripp" Davenport III said the commission can start auditing campaigns when the Legislature funds the staff to do it. He said the staff now has its hands full handling complaints.
Harrison said he believes the complaint system is working well.
"We have what I call 'sore losers' who go in and scan the reports of the winners, and we've got people in the general public who have taken it upon themselves to scan the reports and file complaints with the commission," Harrison said.
It was citizen complaints that resulted in the fines against Kuempel and Davis.
The commission in June also issued fines of $800 against Rep. Sid Miller, R-Stephenville, and $3,600 against former state Rep. Bob Griggs, R-North Richland Hills, for failure to report the details of credit card purchases.
As part of the ethics commission investigation, Kuempel amended his reports to disclose his expenses.
Some of his newly disclosed expenses included travel to help re-elect President Bush in 2004 and meals with constituents in Seguin.
Kuempel's amended reports also showed that he has used his campaign credit cards to pay for $7,152 in travel to legislative conferences and then repaid the money when he was reimbursed by the Texas House. His original report showed the credit card expenses but not the reimbursements, which appeared on an optional page listing credits in his amended reports.
The commission also found Kuempel had violated state law by using $2,500 in campaign funds for personal items in 2004. That included a $1,300 airplane ticket for his wife and a $70 purchase at the Jockey underwear store.
Kuempel said the problems with his report were nothing more than an accounting problem.
"We thought we were doing them correctly, but we weren't," Kuempel said. "It wasn't anybody's fault but mine."
Kuempel's accountant, Tim Fox, said he is unhappy that Kuempel got fined because he thought he was disclosing the credit card charges the way the ethics commission staff told him to six years ago.
Fox said the personal expenditures were never a misuse of campaign funds because Kuempel used the campaign credit card for personal charges and then reimbursed the campaign for the expenses.
"It's a wash," Fox said.
Davis also amended his reports as part of a commission investigation last year.
Some of what he had not previously disclosed included a $2,538 hotel bill at the Gaylord Texas Resort while attending a legislative conference; $887 in constituent gifts from the Texas Capitol Gift Shop; and more than $5,000 in meals at a variety of restaurants.
Davis consultant Allen Blakemore said Davis had tried to follow the law and filed corrected reports when he was told he was wrong.
John Cobarruvias is a Clear Lake political activist and blogger who was one of the first to disclose problems with Davis' reports, including the use of $1,500 in campaign funds to purchase custom-made cowboy boots. The ethics commission in February ruled the boots were a personal conversion of campaign funds and fined Davis $1,000.
Cobarruvias said that the widespread credit card use and potential abuse in dozens of lawmakers' campaign finance reports in Texas show just how ineffective the TEC is.
"We have always heard that the ethics commission was toothless and worthless," he said. "It's worse than that. I think they're incompetent."
Blakemore said that most politicians' reports are not produced in a sinister attempt to hide spending.
Volunteer help
He said honest mistakes occur because most legislators typically cannot afford professionals. Blakemore said the reports are filled out "typically by using volunteers and family members with little or no training."
That is the case of state Rep. Garnet Coleman, D-Houston, whose 72-year-old mother produces his campaign finance reports. Coleman had $50,000 in credit card charges that did not detail the expenses.
"I can't fire my mother," Coleman joked.
Coleman said his mother found the ethics commission's electronic filing software difficult to use to show that the payee was a company rather than the credit card firm. Coleman gave all his campaign bills to the Chronicle to show he had not misused the money, and he promised to file amended reports.
But if Coleman's mother had trouble with the software, imagine the embarrassment of Galveston CPA Bill Ansell, who files the reports for Rep. Craig Eiland, D-Galveston. Eiland had $56,000 in undetailed credit card expenses.
Ansell said Eiland gave him all the information and that sometimes his staff filled in the disclosure software correctly and sometimes it did not.
"It (the software) is built to accommodate expenses paid by check. So to do credit cards, you have to revise and devise," Ansell said. "It's certainly not Craig's fault."
Eiland said amended reports will be filed as soon as possible to keep him in compliance.
"If there's a fine, we'll pay it," Eiland said.
According to reports filed by three legislators fined by the Texas Ethics Commission, here are some charged expenses that previously went undisclosed:
State Rep. Edmund Kuempel, R-Seguin, fined $8,500
• $2,666 in travel to campaign for President Bush's re-election in 2004
• $1,470 in travel to Montana for an Association of General Contractors meeting
• $270 to entertain constituents at Ciros Cocktail Bar in Seguin
• $522 in lunches with constituents at El Ranchito in Seguin
• $4,623 for legislative meals at Ruth's Chris Steakhouse Houston
State Rep. John Davis, R-Clear Lake, fined $1,000
• $4,638.62 for a year's worth of gas.
• $2,538 hotel bill at the Gaylord Texan Resort in Grapevine for 2005 legislative conference.
• $887 in gifts from the Texas Capitol Gift Shop.
State Rep. Sid Miller, R-Stephenville, fined $800
• $423.49 for hotel stays and meals in 2006 at the Austin Clarion Inn.
Source: Reports at the Texas Ethics Commission
Houston Chronicle reporter Chase Davis contributed to this report.
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