Ex-TABC official sues over job loss
She says she was ousted for reporting conflicts of interest
A former executive for the Texas Alcoholic Beverage Commission who was ousted two years ago in a purge over extravagant travel spending is now saying she was forced out because she alerted her bosses to a new commissioner’s conflicts of interest, according to a federal lawsuit.
Amy Harrison was director of licensing when she was pushed out of her job in July 2017 following a rash of critical media coverage over expensive out-of-state trips to conferences where alcoholic beverage commission offi
cials partied and mingled with beverage industry representatives. A half-dozen other agency executives also lost their jobs in the shake-up.
In a lawsuit filed Monday, however, Harrison said she was pushed out after alerting alcoholic beverage commission lawyers that Kevin Lilly, the former Army captain tapped by Gov. Greg Abbott to clean up the troubled agency, had personal stock holdings in companies regulated by the agency. “Once she noticed that a conflict of interest might exist she felt that she had a civic duty to notify certain individuals regarding the possible violations of statutes,” the lawsuit states.
Soon after she raised her concerns, Harrison was told the agency was “going in a new direction” and she was asked to resign, according to the lawsuit. An employee since 1990, Harrison declined but was soon forced out in retaliation for going outside the agency’s chain of command, the suit charges.
A spokesman for the alcoholic beverage commission, Chris Porter, said the agency could not comment on pending litigation. Reached at her Austin consulting company, Harrison also declined to comment, referring questions to her attorney, John Melton.
Melton said Harrison had alerted her bosses about Lilly’s potential business conflicts as a concerned citizen, and her forced departure because of it violated her First Amendment speech protections. He said in addition to back pay, Harrison is seeking her job back. “We look forward to presenting our case to a jury,” he said.
Lilly, founder and president of Avalon Advisors Wealth Management in Houston, did not return a message left at his office. According to the lawsuit, he initially had contacted Harrison to ask her about potential conflicts he might have in his new role because of his personal stock holdings. After Harrison told him she wasn’t the right person to determine if his portfolio crossed any legal or ethical lines, Lilly nevertheless sent her and the agency’s general counsel a list of companies in his portfolio, the suit states.
“When she saw it, Ms. Harrison compared the list sent by Chairman Lilly to entities licensed by the TABC, discovered that there was overlap between the two and concluded that at least in her non legal opinion Chairman Lilly’s stockholdings could potentially constitute violations of the Texas Alcoholic Beverage Code, the Texas Government Code and the Texas Penal Code.”
Harrison said she forwarded her concerns to the agency’s counsel, who agreed there might be some conflicts, as well as its executive director at the time, Ed Swedberg. Soon after, she alleges, she was pressured to leave.
Swedberg did not return a message left at Government Partners, an Austin company where he is listed as a senior consultant.
Although the lawsuit does not reference it, the timing of Harrison’s forced retirement coincided with a series of reports, primarily by the Texas Tribune, about the commission’s travel spending and an enforcement action it had pursued against the state’s largest liquor store chain that judges later determined was gross overreach. Harrison appeared in an embarrassing photoshopped flier showing herself and other executives jetting off to a California industry convention waving a six-pack of Lone Star beer.
Harrison’s lawsuit does not identify Lilly’s stock holdings that reportedly raised concern. According to the state’s Alcoholic Beverage Code, “No person may be appointed to or serve on the commission…who has any financial connection with a person engaged in an alcoholic beverage business; holds stocks or bonds in an alcoholic beverage business; or has a pecuniary interest in an alcoholic beverage business.” Legislators approved a more lenient version of the rule earlier this year, stating that a conflict would exist if a commissioner owned or controller at least 5 percent of an alcoholic beverage business, however, the new rules won’t go into effect until September.
Lilly’s 148-page disclosure statement filed with the Texas Ethics Commission does not list any obvious alcoholic beverage companies. Yet in recent years the definition of a company engaged in the alcoholic beverage business has become more complicated. The state’s beverage code allows no overlap among manufacturers, distributors and retailers. As corporate ownership has become more complex, however, and tied up in pensions and mutual funds, the agency has struggled to pinpoint where to draw the legal lines.