Sunset Advisory Commission PO Box 13066 Austin, TX 78701 April 10, 2012 RE: Comments on the Texas Ethics

Commission Honorable Members, The purpose of the Texas Ethics Commission as stated in Chapter 571 of the Government Code is to eliminate opportunities for undue influence over elections and government actions and to ensure the publics confidence and trust in its government. This elevates the Commissions status among Texas regulatory agencies. When citizens lose trust and confidence in their government then government loses its legitimacy. A strong and effective Ethics Commission is critical to ensuring that our state government, our elections, and our democracy are legitimate. Texas has a long way to go to ensure citizen confidence and trust in their government. Texas government and elections need more transparency, more ethics enforcement and more reforms. As representatives of the states leading non-partisan, non-profit, citizen and good government organizations we offer the following comments on the Sunset Commission staff report. While generally supportive of the reports recommendations we believe some of them fall short of achieving the agencys purpose. More importantly, the staff report overlooks a number of issues that are fundamental to transparent and accountable government. Comments on staff recommendations: Issue 1 Too Much Focus on Minor Reporting Infractions. The agency should focus its attention and resources on investigating thoroughly the more serious violations and weed out the less serious ones more efficiently (Recommendations 1.1 & 1.2). Creating a three-tiered hierarchy of violations, applying new names to characterize them, and allowing staff to resolve lesser violations makes sense. Staff should thoroughly investigate the few major alleged serious violations which involve credible allegations of Class A misdemeanors (a political committee failing to file a campaign treasurer) or Class 3 felonies (making or receiving illegal corporate or union contributions).

Issue 2 Current Hearing Process Weakens Effectiveness. The staff report recognizes important shortcomings of the current hearing process yet does not go far enough with its proposed solutions (Recommendation 2.1). To provide the agency with the same power and effectiveness of other state civil enforcement agencies, we propose creating an enforcement division and director with full authority, including subpoena power, to oversee all investigations and enforcement actions. The State Office of Administrative Hearings (SOAH) would hear contested cases. Commissioners would then accept, modify or reject Proposals for Decision developed by SOAH.

We support the recommendation for software to automatically perform facial audits and to require a specified number of complete random audits annually. We support the recommendation to end de novo review of contested cases (Recommendation 2.2).

Issue 3 Technology and Information Management. We strongly agree that the agency needs new resources to upgrade its technology on an ongoing basis. Upgrading the software and hardware will deliver transparency more quickly and efficiently. Upgrading C&E reporting software could eliminate some minor and administrative reporting errors. We support an increase in general appropriations and the creation of a reasonable user fee for C&E filers, with exemptions for committees and candidates who raise or maintain relatively small amounts of contributions, dedicated to technological upgrades, audits and training.

Issue 4 Antiquated Filing Requirements. Personal Financial Statements (Recommendation 4.1). We strongly support the recommendation to require PFS forms to be filed electronically and posted on the Internet. The information within the PFS should be available in a database-compatible format. We are disappointed that the staff recognized the need to update the content of the disclosures yet made no specific recommendations. The PFS should be updated in the following ways: 1. Require the disclosure of all sources of earned income of $200 or more. 2. All fee, income and & value categories should be expanded and graduated up to $5,000,000 or more. 3. In Parts 2, 3, & 4 add a section disclosing the number of shares or value of assets sold and/or retained. 4. Disclose fair market value of gifts worth more than $100. 5. Disclose the identity of lobbyists with business interests in common with filers. 6. Add a section to disclose future agreements and arrangements (see federal forms). 7. Disclose partnership details and identities of partners who own stakes worth more than 10%. Eliminating the filing exemption for smaller general-purpose PACs improves transparency and disclosure (Recommendation 4.2). The provision that keeps C&Es from on-line posting until all candidates in a particular race have filed reports keeps the public unnecessarily in the dark. We strongly support eliminating that provision (Recommendation 4.3).

We support the recommendations to streamline the filing process (Recommendation 4.4).

Fundamental issues not addressed in the staff report: The need for reasonable limits on campaign contributions to candidates and committees, as well as the need for aggregate limits on individual contributions in each election cycle. The creation of alternative campaign financing mechanisms such as voluntary public financing. The need to strengthen and apply revolving door prohibitions to legislative and statewide officeholders and key staff members. Creating mechanisms to limit pay-to-play politics. Proposals to remove conflicts of interest from Texas courtrooms and restore faith in an independent judiciary. Revoking state pension benefits to legislators convicted of a felony. Establishment of new criteria for TEC Commissioners that includes previous experience in law enforcement, ethics enforcement or other similar regulatory or professional backgrounds.

Thank you for your attention to these critical transparency and accountability issues. Sincerely, Tom Smitty Smith Public Citizen Texas Matt Glazer Progress Texas Liz Wally Clean Elections Texas Connor Kenny Sunlight Foundation Laurie Vanhoose Fred Lewis Common Cause Texas Texans Together Ed. Fund Joanne Richards Coffee Party Austin Bee Moorhead Texas IMPACT Craig McDonald Texans for Public Justice Phillip Martin Texas Research Institute