Two years ago, state Sen. Wendy Davis, D-Fort Worth, launched a new law firm with Brian Newby, Republican Gov. Rick Perry’s former chief of staff. Now, with Davis in a hotly contested bid for re-election, her legal practice — and, in particular, her closely held list of government and quasi-public clients — is drawing heat from her Republican opponent, state Rep. Mark Shelton of Fort Worth.
Davis held a hastily called press conference on Friday morning to denounce the content of attack ads she said were being produced by Shelton’s campaign. The scripts for three ads — none of which had been broadcast — were leaked to Davis’ campaign via “a third party,” she said.
“The claims made and the themes depicted are false,” Davis said. “Rather than talking about issues that matter to families living in Tarrant County, Mark Shelton is using actors and actresses to say things that aren’t true.”
Shelton's campaign did not dispute the authenticity of the ad scripts. One of the ads cites Davis’ legal work, painting her as a corrupt lawmaker using her Senate post to gain lucrative contracts.
"It is not right for Davis to vote to raise taxes and then steer herself lucrative public contracts," Shelton said in a statement on Friday. "This abusive self-enrichment is nothing short of Davis being a greedy public office who is robbing taxpayers' pockets to line her own pockets."
The Texas Constitution prohibits lawmakers from voting on bills they have a “personal or private interest” in. State law also bars them from voting on measures that will directly benefit a specific business transaction if they have a controlling interest.
Since its inception, the Newby Davis law firm has drawn scrutiny over whether its work creates conflict of interest issues for Davis, who has said the practice offers legal services for cities and other public entities as well as companies trying to do business with those entities. The firm works out of offices owned by Cantey Hanger, one of Fort Worth’s largest and oldest law firms. Newby and Davis also do legal work for Cantey Hanger individually. But their Newby Davis firm is certified as a minority-owned business, allowing it to help public entities and private firms fulfill legal requirements or best-practice recommendations that they hire such contractors.
The line between Davis’ public and private work raised eyebrows right from the start of her new legal career. In 2010, when Cantey Hanger announced in a press release that it was hiring Davis, it listed Davis’ taxpayer-funded communications director Anthony Spangler and her district office phone number as the press contact.
While Davis has long insisted that her work as a lawyer does not conflict with her work as a state senator — she has said she retains a legal ethics adviser to help ensure that she is keeping clear of any potential conflicts — she has declined requests to identify her public sector clients, citing attorney-client privilege.
“It’s an attorney-client privilege issue and unless and until my clients say to me, 'You are free to disclose that,' I really don’t think that I can,” Davis told a Fort Worth Star-Telegram reporter earlier this year.
Public records show Davis' public sector clients run the gamut in North Texas, from Dallas-Fort Worth International Airport to the Fort Worth Independent School District.
One such client, the North Texas Tollway Authority, disclosed last year that the FBI was investigating possible conflicts of interest involving tollway authority officials, though there’s been no indication that the investigation relates to Davis.
Last year, the Star-Telegram reported several potential conflict-of-interest issues related to NTTA board members, including one involving Board Chairman Kenneth Barr, a former Fort Worth mayor.
At an NTTA board meeting in 2011, Barr made a motion that Newby Davis be hired to handle condemnation issues related to the Chisholm Trail Parkway. At the time, Barr failed to disclose that he had a business relationship with Cantey Hanger, the firm where Newby and Davis also work, and which partners with the Newby Davis law firm on legal business. Barr keeps an office in Cantey Hanger’s building in downtown Fort Worth. Also in 2009, Barr, Newby and Cantey Hanger attorney David Chappell briefly formed a partnership named Barr Newby Chappell Consulting, according to state records.
The tollway board voted unanimously to hire Newby Davis. Barr has said his failure to inform fellow board members of the past relationship or to consider abstaining from the vote was an oversight, but NTTA spokesman Michael Rey said the agency has no reason to believe Davis has not complied with her ethical requirements as a lawyer and as a legislator.
“The NTTA has no issue with the quality of the legal work Sen. Davis has performed on its behalf thus far," Rey said. "These legal matters have been limited to routine property acquisition work for the Chisholm Trail project.”
Victor Vandergriff, an NTTA board member, said he didn’t believe there was anything unethical in the way the board hired Newby Davis, but that the situation was handled too quickly and in a way that aroused suspicion.
“The optics of that could have looked better,” Vandergriff said.
Though Davis' legal contract with NTTA was approved during the last legislative session, Davis' campaign said the senator did not start her work until after the session ended. As proof of her independence, she pointed to a bill she filed in the last session that would have lowered the fees the NTTA was allowed to collect from toll scofflaws.
Shelton’s campaign, meanwhile, has accused Davis of switching her vote on a toll road bill after receiving a lucrative legal services contract with the NTTA. Davis voted against a bill in 2009 regarding how entities like the NTTA can bid on toll projects. She voted for a similar bill in 2011. Davis campaign spokesman Zac Evans said Davis’ vote changed because the bills did.
“The 2009 bill gave NTTA exclusive rights to any toll project in the area… even if they were incapable of completing it in a timely manner,” Evans said. “The 2011 bill had provisions that would deprive NTTA of that exclusive right to develop a project.”
In addition to its work for the NTTA, Newby Davis has served as minority bond counsel for both DFW Airport and the Tarrant County Water District. A bond counsel’s work includes advising a city or other public entity issuing a municipal bond and insuring that the bond meets all legal requirements. Newby Davis has worked on more than $1 billion in bonds issued by the airport and at least $150 million in bonds for the Water District.
Along with her work with Newby Davis, the senator has also provided legal services to some public entities via her role as “of counsel” with Cantey Hanger. She has performed legal work for Fort Worth ISD on employment law matters, according to the district. She has also provided legal services for the Benbrook Water Authority for more than a year, according to David Wasson, the water authority’s general manager.
During the last legislative session, Davis was the senate sponsor of a bill that gave the Benbrook Water Authority the power to pay for private property damage that stemmed from a backup of the authority’s sewer system even when it wasn’t held liable for the damages (Shelton was the bill’s House sponsor). No other public entity was directly impacted by the bill, which Perry signed into law in June.
Wasson said there was no connection between Davis’ sponsorship of the bill and her work for the water authority. He said he reached out to Austin firm Lloyd Gosselink to work on the bill, and that the firm asked Shelton and Davis to sign on.
Davis has forcefully disputed any suggestion that her votes were compromised.
“The legislation I have championed, including the bills I authored or co-authored regarding NTTA and the Benbrook Water Authority, is centered entirely around my commitment to protect Texans from fiscally harmful decisions and to hold governmental agencies appropriately accountable to the people they serve,” Davis told a Star-Telegram reporter in March.
In addition to Shelton's accusations of legal conflicts, one of the ad scripts Davis released has Shelton accusing her of breaking state ethics laws due to the work of her “business partner” — Newby — as a “special interest lobbyist.” The ad also says Davis owns a lobbying firm.
In both 2011 and 2012, Newby registered as a lobbyist with the Texas Ethics Commission and cited “Newby Davis” as one of his clients. Evans said Newby registered with the commission “out of an over-abundance of caution.”
“Mr. Newby has never received compensation for lobbying on behalf of Newby Davis, nor has he testified before or lobbied anyone in the Legislature,” Evans said.