State ethics panel finds former rep skirted law
A lawmaker-turned-lobbyist could be subject to thousands or more than $1 million in fines after the Texas Ethics Commission last week unanimously approved a legal finding that he skirted a revolving door law — which he himself had helped write.
The draft opinion did not mention by name former Rep. Chris Paddie, a Republican from far northeast Texas, but the facts of the case reflect his situation exactly, which his lawyer Ross Fischer acknowledged. Paddie won’t be penalized directly, but Fischer disclosed that his lobbying is also being reviewed separately by the commission, which could lead to fines. Fischer also said that Paddie has decided to terminate his lobby registration and stop lobbying in light of the opinion.
In a state notorious for weak lobbying laws, the commission’s vote Thursday effectively blocks a newfound loophole in the revolving door law, which is meant to prevent former public officials from using their inside connections for personal gain. Commissioners were unequivocal Thursday.
“What is complicated about this subject?” Commissioner Joseph Slovacek said at Thursday’s meeting. “We’re really just clarifying that we all can read English and the statute says what it says it says.”
The law, passed in 2019, bars state lawmakers from becoming lobbyists within two years of donating leftover campaign funds to other politicians.
Paddie retired last year after chairing a powerful House committee that tackled the state’s response to the 2021 winter storm that killed hundreds and was tasked with holding energy firms accountable for failures. He had since registered as a lobbyist and taken on
several of those same companies as clients, a move that drew criticism from Lt. Gov. Dan Patrick, with whom he’d sparred over energy issues in the last legislative session.
Paddie had donated about $50,000 to lawmakers before leaving office, but says he reimbursed his campaign account for them in late 2022 using his personal money.
“As a result, my campaign account has been made whole and is no longer the source of those contributions,” Paddie said in a statement to the Texas Observer last year. “I am now personally the source of the campaign contributions in question.”
But the ethics commission found that aspiring lobbyists can’t “undo” a violation by acting retroactively to reimburse their campaign. The triggering event, it said, is the campaign donation.
In other words, it’s too late. The same is true, the commission noted, when a candidate returns an illegal donation from a corporation: Returning it doesn’t suddenly make it legal.
“The Legislature was very clear that this was the behavior they were trying to prohibit and that there was no cure because the goodwill for the contribution, the benefit has already been received,” said Randall Erben, the commission’s vice chair.
Fischer said Paddie will make the decision about whether to continue lobbying when he receives and reviews the final draft of the opinion.
Paddie is representing 11 clients this session that he expects to pay him up to $622,500 to influence lawmakers on their top issues, state data show. His toppaying clients include energy firm Vistra Corp and identity verification company Incode Technologies, Inc.
Since December, Paddie has spent nearly $1,100 on food and beverages for state lawmakers, their staffers, state agency employees and their family members and other guests. He did not have to report their names because state law only requires it for expenses over a certain daily threshold.
“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,” Fischer said in a statement to Hearst Newspapers.
At the meeting, Fischer had argued that Paddie made a sensible calculation, considering other types of ethics violations can be fixed by substituting campaign donations with personal funds.
“It’s not unreasonable for a person seeking to comply to look at the way the commission has treated these sorts of remedies before and try to craft a compliance plan based on that,” Fischer said.
Fischer urged the commission to postpone a vote firstly because the opinion did not contain any compliance advice and secondly because the commission would be preempting Paddie’s case before he’s had a chance to have a hearing.
“It’s akin to being in a trial, and the judge entering a verdict and a sentence before the defense has put on its case,” Fischer said.
Executive director J.R. Johnson said the ethics commission, the regulatory agency in charge of enforcing the state’s campaign finance and lobbying laws, began looking into this issue after media reports surfaced and staff began receiving phone calls.
The ethics commission releases draft opinions when it receives a complaint. Or it can initiate its own inquiry, which it did in this case.
The commission chose not to weigh in on the fine amount for this type of violation.
The commission doesn’t meet again until June, the soonest it can hold a hearing in Paddie’s case.
Adrian Shelley, director of Texas’ Public Citizen office, said the decision stops short of creating any real change.
“Representative Paddie will be able to lobby throughout the entire legislative session while the complaint against him goes unanswered,” Shelley said.
Paddie wasn’t the only one who potentially flouted the law. Eddie Lucio III, a Democrat from Brownsville who retired from the House last year, had attempted to refund all his political contributions so he could register as a lobbyist, but he missed some before the account closed. His lawyer told the Texas Tribune last year that he decided “out of an abundance of caution” to suspend his lobbyist registration and wait the required two years from his last donation.