By Aaron Reiss
By Angelica Leicht
By Dianna Wray
By Aaron Reiss
By Camilo Smith
By Craig Malisow
By Jeff Balke
By Angelica Leicht
When corporate executives take politicians and public officials hunting, questions as strange as those in particle physics can arise. For example, how can the hunt be both a lobbying trip and not a lobbying trip? Can the lobbyist be a lobbyist if he's not registered with the state when he did the lobbying that was not really lobbying? Like particle physics, it all depends on your point of view. The very act of observation changes the behavior of the particles -- in this case, state Senator James E. "Buster" Brown and his friend and legal client Ravi Singhania, the top executive of BASF's huge chemical manufacturing plant in Freeport.
In early December, Singhania flew several Brazoria County public officials, including the county judge, the superintendent of schools and a Lake Jackson city councilmember, to Fighting Island, a BASF-owned hunting lodge in LaSalle, Ontario, not far from Detroit. Brown, who, at state expense, had been chairing a multi-state energy conference at the Rocky Mountain resort of Lake Louise in Alberta, flew several hundred miles east to join his pals and pop a few pheasants at the expense of BASF.
When news of the hunt broke nearly two months later in the Brazosport Facts, Brown and the Brazoria County officials insisted it was all a matter of friendship and that no public business was ever discussed. But they probably didn't need to talk business, because a few days before the hunt, BASF had won the go-ahead from local officials for a $3.7 million reduction of its local taxes over a seven-year period, taking advantage of a state sales-tax rebate law that Brown had carried through the Senate the previous April. So maybe the trip was a reward for good deeds done, rather than an incentive to do more good deeds in the future. It all depends on how you look at it.
In any case, Brown promised the trip would be properly reported in April when he filed his personal financial disclosure to the Texas Ethics Commission. April came and Brown asked for an extension, but when his report finally came in on July 3, no hunting trip (or anything else for that matter) appeared on Brown's list of gifts and benefits for the year 1995. Brown told the Press that since BASF had reported the hunt as a lobbying expense, under state law he didn't need to list it as a gift on his financial statement.
Sure enough, Ravi Singhania did list a $450-$500 cost for the hunt to Brown on a lobbying disclosure form filed on February 21, three weeks after news of the trip first surfaced. Singhania also reported paying for a golf trip to Columbia Lakes Country Club for Brown and state Senator Ken Armbrister in November, and declared other lobbying expenses totaling more than $1,800. But there was a bit of a problem: Singhania, it seems, was not technically a lobbyist when he took Brown hunting and golfing. The Texas Ethics Commission accepted Singhania's filings, but on February 29 sent back his check to register as a lobbyist for 1995, noting that "lobby registration cannot be made retroactive."
According to Karen Lundquist, a lawyer for the Texas Ethics Commission, state law requires a person to register as a lobbyist within five days of a communication that is intended to influence a legislator, and failure to do so could be punishable as a Class A misdemeanor. A BASF spokesman refused any comment other than to say that the company "has complied with all the rules."
Was the hunt really a lobbying activity? Brown says it was not, but "out of an abundance of caution, we are treating it as a lobbying trip." Technically, the hunt wasn't a "trip" for Brown at all, since, as a legislator, he is forbidden to take transportation or lodging from a lobbyist unless he is performing a significant professional service. According to Senate documents, on February 7, a week after the Brazosport Facts story hit, Brown reimbursed the state $490 for his flight from Calgary to Detroit.
While the hunting excursion did not show up on Brown's financial disclosure, the senator did finally list the retainer he's been paid annually by Houston Lighting & Power for the last seven years.
The good thing about being on retainer is that a lawyer doesn't necessarily have to do much for the money except be available and give advice, says HL&P spokesman Graham Painter. Hiring Brown to be its lawyer in the Lake Jackson-Freeport area is all part of the utility's strategy to hire local attorneys in "remote" areas where HL&P might encounter such legal problems as personal injury suits. Houston megafirm Baker & Botts handles most of the company's litigation, Painter says, but it helps to have what is known in the trade as "local counsel."
"When they walk in and the local judge knows them," says Painter, "it makes a difference. Perhaps it shouldn't, but we believe it does."
To that end, HL&P retains lawyers in Galveston, Richmond/Rosenberg and Baytown as well. None but Buster Brown, however, is a state senator, and none of the others has the power to reject or approve a gubernatorial nomination of district judge, as Brown did in January 1995. Brown, as the recipient of senatorial courtesy, saw to it that Governor George W. Bush appointed Ben Hardin, a former business associate and law partner of Brown's, to replace the retiring Neil Caldwell as a district civil court judge in Brazoria County. Brown reportedly is in great demand as local counsel since Hardin took the bench. (Brown, whose Senate district stretches into southwest Houston, also benefits from dozens of appointments as a mediator and guardian ad litem from Harris County judges and fellow Republicans Tad Halbach, Scott Link, David West and Don Wittig.)
Brown's relationship with HL&P was first revealed when he ran for state attorney general against Dan Morales in 1990. Forms filed with the Public Utilities Commission showed Brown had received a $12,000 retainer from HL&P. The question was raised then as to whether Brown should be voting on laws that might affect the financial interests of the utility, an almost certain occurrence when the Legislature meets.
In 1991, the Legislature created the Texas Ethics Commission to bring potential conflicts of interest to light. The new financial forms included a section on retainers, but Brown never reported his retainers with HL&P until he submitted his 1995 report this July. Brown says he reported the payment because he had severed his relationship with his law firm, Brown, Girouard & Richardson, in February 1995, and is now in business for himself. According to Brown, he didn't have to report the retainer earlier "because it came to the firm."
But the disclosure form is explicit. It requires the filers to "identify any person or other organization from which you or a business in which you have a substantial interest [italics added] have received a fee as a retainer for future services." A "substantial interest" is defined as owning more than 10 percent of a firm, and in earlier filings, Brown had reported a 20 percent ownership in his old law firm.
There was never any confusion at HL&P about whether it wanted Brown or his law firm. "In this case we wanted the senator," says Painter, "because he was a person of stature. It was done through the firm, and when he left the firm we had to make a decision, and we decided to stay with the senator."
Small wonder about that. When HL&P first retained Brown, he was sponsoring the confirmation of two of the three members of the Public Utility Commission. When the Legislature meets next January, it will consider major legislation to deregulate the electric utilities, legislation that could cost HL&P billions of dollars.
To Brown, representing HL&P and voting on deregulation that affects the utility is no big deal.
"I would look at it like any client that I represent, " he says. "We have 5,000 bills that come before the Senate. I don't prejudge them until the time comes ... over 16 years, I have faced a lot of bills. I don't think this is any bigger than anything else."
If Brown's past voting record is any indication, don't expect him to bow out of the debate over utility deregulation. The journal of the Senate indicates that Brown did not abstain from voting on two major utility regulation bills in 1993 and 1995. Brown says he can't recall ever abstaining on utility votes, but, he says, "I don't remember there being any conflict, either."
"Buster Brown is a poster child for why we need reform," says Tom "Smitty" Smith, of the watchdog group Public Citizen. "There are significant loopholes in existing law that prohibit us from knowing who a legislator represents. The law needs to be tougher and require disclosure under seal to the House and the Senate of all clients of lawyers, and the clerk needs to be empowered to advise members that they cannot vote on certain items."
That would require a new level of muscle for the Ethics Commission, which has no independent investigatory powers. For the commission to clear up the inconsistencies in Brown's filings or those of his client, Ravi Singhania, a citizen would have to file a sworn complaint before the commission. The commission would then hold a private, informal hearing, and if more attention is required, a second closed hearing would be held. A full, formal public hearing is the third and final stage, but in its four years of existence, the commission has always settled ethics disputes privately.
Does that mean Texas politics is incredibly clean or the Ethics Commission is toothless? It all depends on your point of view.