Texas Ethics Commission gives former Speaker Bonnen a free pass while putting former Chair Paddie on notice about lobby activities
For two similar situations regulated by the same Texas campaign finance law, it looks like a giant loophole for one and a warning of a pretty severe punishment in another. In two advisory opinions unanimously approved Thursday, the Texas Ethics Commission gave the thumbs up to the way former Speaker Dennis Bonnen is using campaign contributions while warning former Chairman Chris Paddie that he faces potentially stiff penalties for the way he’s handled his contributions and lobby business.
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For two similar situations regulated by the same Texas campaign finance law, it looks like a giant loophole for one and a warning of a pretty severe
punishment in another.
In two advisory opinions unanimously approved Thursday, the Texas Ethics Commission gave the thumbs up to the way former Speaker Dennis Bonnen is using campaign contributions while warning former Chairman Chris Paddie that he faces potentially stiff penalties for the way he’s handled his contributions and lobby business.
First, without much discussion the commission voted to agree that the way former Speaker Bonnen has moved his money around is legal. Bonnen transferred his roughly $2 million in contributions to a general purpose political committee and has made contributions to candidates out of that.
In their advisory opinion, the commission said it’s legal for a former legislator to register to lobby if that person had moved their "political funds to a general-purpose political committee more than two years before being required to register." Bonnen hasn’t registered so far, opting instead to “consult” while others lobby on behalf of his clients.
Bonnen wasn’t mentioned by name during the commission’s meeting but that’s exactly how he’s conducted his business.
For Paddie it was very different.
And, unsurprisingly, the ire directed at the former State Affairs Committee chairman came from one of the commissioners appointed by Lt. Gov. Dan Patrick , who has publicly railed against Paddie in recent months and essentially demanded that he be fired by his lobby clients including Vistra and others.
Ethics Commissioner Joe Slovacek , the Patrick appointee, went so far as to question whether Paddie could even read the law in question that he co-authored with Rep. Craig Goldman , House Bill 2677 , in 2019. Passage of the bill was all but perfunctory with no questions from the House floor and was sent to the Texas Senate on a vote of 143-0. “We’re really just clarifying that we all can read English and the statute says what it says it says,” Slovacek said. "The fact that he (Paddie) was the co-author, he should understand the legislative intent better than anybody.”
On that point, Paddie’s attorney Ross Fischer argued his client’s involvement in drafting of the law should lend credence to his plan to comply with it.
That plan, as Fischer explained, was simply to use personal funds to reimburse his campaign account for the amount that had been contributed to candidates. That was about $50,000. After Paddie had done that, he re-registered to lobby after de-registering last year when the issue was first raised.
Unlike most advisory opinions issued by the TEC, this one was initiated internally at the commission rather than being prompted by a request from a citizen. A rarity, to be sure.
Under the advisory opinion related to Paddie’s business, he could face either a fine of up to $5,000 or "triple the amount at issue,” which could either be triple the amount of campaign contributions he made or triple the maximum amount of income indicated on his lobby registration statement.
The Commission amended the original draft this morning, removing the ambiguous penalty language preferring to consider penalties after a separate complaint against Paddie had been considered on the specific facts of the case. By the way, Paddie’s attorney acknowledged that a sworn complaint had been filed against his client.
The language could be read to assess a penalty of triple damages based on the value of the contracts Paddie had signed. Some Capitol observers have argued this may be the first time such an extreme penalty has ever been proposed by staff and inserted into draft opinion language. Had Paddie moved his campaign funds to a general purpose PAC from his campaign account, as Bonnen did, the law would have apparently not applied. A technicality, really. After the commission voted to approve that warning against Paddie, Commissioner Slovacek said anyone violating the law would be doing so "at their own risk." "If we clarified our position on this, we'll just deal with it (a punishment) another day," Slovacek said. The committee’s next meeting is slated for this summer, after the regular session has concluded.
Following the votes, Paddie’s attorney said “It has always been Mr. Paddie’s intent to comply with the law and we continue to maintain that he took appropriate action to ensure compliance.” “As I indicated at this morning’s Ethics Commission meeting, Mr. Paddie has had a sworn complaint filed against him,” Fischer said. “Fortunately, that process affords him due process and the opportunity to explain his efforts to comply with the law.” “We intend to seek formal guidance from the Commission on how Mr. Paddie can best comply with this new opinion,” Fischer said.