Fraser Failed to Disclose Perry Land Deal

The lawmaker involved in a questionable land deal with Gov. Rick Perry failed to disclose ownership or sale of the property to the Texas Ethics Commission, an apparent violation of a state ethics rules, according to a review of his personal financial statements.

State Sen. Troy Fraser, R-Horseshoe Bay, didn’t list his September 2000 acquisition of the waterfront lot on Lake Lyndon B. Johnson in the disclosure form he filed for that year. He also didn't note a year later the fact that Perry purchased the property from him in 2001, the documents show.

State law requires elected officials such as Fraser, a friend and political ally of the governor, to describe "any and all" interests they or their families have in real property. They also must disclose any proceeds they received when those interests are sold. Failure to file the forms on time can result in civil penalties levied by the commission, though Fraser will not face enforcement because the commission doesn't have the authority to levy fines for a 10-year-old violation. 

Fraser, a wealthy investor, listed numerous stock holdings and other financial information on the 52-page filing but omitted the land deal. He was traveling out of the state on Wednesday and was unavailable for comment, said his chief of staff, Janice McCoy, who declined to discuss the issue.

Andy Wilson, a research associate for campaign finance issues at the watchdog group Public Citizen Texas, said the senator's failure to correctly file the forms is no small matter. "The public’s right to know on this is absolute," Wilson said. "Considering that, for most Texans, their homes are the most important thing that they own, I’m surprised that someone would forget to put this on a financial disclosure — especially waterfront property on Horseshoe Bay."

Perry’s investment in the resort property was the subject of a lengthy investigation published Sunday in The Dallas Morning News. The paper reported that the governor may have received an enhanced deal based on personal favors from wealthy friends and campaign contributors. Fraser was central to the deal. Perry’s office has denied any special treatment: The governor told the newspaper that each personal land deal he has made while in office "has been open and honest, and at arm's length." His staff has repeated those sentiments in other news accounts.

Perry’s Democratic opponent in the governor’s race, former Houston mayor Bill White, has pounced on the revelations about the land deal, calling Perry dishonest and the money he made on the property — nearly $500,000 when he sold in 2007 — "ill-gotten gains." 

"The questions about why Rick Perry’s close friend hid the transactions are just one of many questions that needs to be addressed immediately," said White’s spokeswoman, Katy Bacon.

Perry's campaign defended the governor's handling of the land deal. 

“This transaction was appropriate, conducted at arm’s length, and the governor’s office was fully transparent regarding the matter,” said spokeswoman Catherine Frazier. “It’s clear that Bill White will say anything to distract Texans.”

The News' appraisal concluded that Perry, who purchased the half-acre lot for $300,000, paid $150,000 below market value. When he sold the parcel in 2007 for $1.15 million, that price was $350,000 over market value, the appraiser concluded.

The paper's report also exposed that the land was sold and purchased by wealthy individuals with political connections — and that Perry hired a lawyer he appointed to the Texas Public Safety Board to help fight his property tax appraisal. The story noted conflicting and evolving accounts of the transaction’s details, raising questions among watchdogs.

"The man on the street on this would think that this is a series of deals that smell of special favors being created for elected officials to curry their favor," Ellen Miller, executive director of the nonprofit Sunlight Foundation in Washington, D.C., told the News.

Perry's campaign defended the governor's handling of the deal, taking a shot at White 

"This transaction was appropriate, conducted at arm’s length, and the governor’s office was fully transparent regarding the matter,” she said. “It’s clear that Bill White will say anything to distract Texans from the fact that he’s not unveiled one new policy initiatives, and that he continues to hide the truth about his business practices and liberal policies."

If Fraser were to correct the form, he almost certainly faces no sanctions by the Ethics Commission, an appointed body and state agency that oversees lobbying, campaign-finance and ethics enforcement.

The rule requiring timely filing of the forms — which are intended to "strengthen the faith and confidence of the people of this state in state government" — includes what amounts to a two-year statute of limitations, said Natalia Luna Ashley, the commission’s general counsel, who only discussed the requirements and not the specifics of Fraser’s reports.

In general, current law gives the commissioners power to sanction officials for omissions or incorrect filings on the financial forms in response to sworn complaints by members of the public or rival campaigns. They also can fine officials for filing reports late, which would include corrections after commission deadlines.

The law in 2000 and 2001, however, exempted officials from late-filing penalties associated with corrections if they swore they made the mistake or omission in good faith.

Fraser last summer corrected several years of reports that omitted property interests, according to the commission, which never fined him for late or incorrect filings. In the report for calendar year 2008, for example, Fraser neglected to note his own property at Horseshoe Bay.

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