On Railroad Commission Campaign Finance, a Battle Looms

The Legislature has some big decisions to make as it takes up the sunset legislation on the Texas Railroad Commission.  The most obvious is whether the antiquated name finally get scrapped, and changed to the more-apt Texas Energy Resources Commission or (as the three commissioners prefer) the Texas Energy Commission.

But another, more contentious issue is also wrapped into the RRC sunset bill: campaign finance reform. The three Railroad Commissioners, who are elected, regularly get their campaign coffers replenished by oil and gas industry, which they regulate. The lawmakers who are carrying the Sunset bills seem eager for reforms, though the three commissioners are not.

“We must do something” on campaign-finance reform, said  Rep. Dennis Bonnen, R-Angleton, speaking on a panel at a Texas Independent Producers and Royalty Owners Association (TIPRO) conference in Austin last month. Bonnen is carrying the Sunset bill, House Bill 2166. Sen. Robert Nichols, R-Jacksonville, has the Senate companion.

The legislation essentially proposes three big changes to the campaign-finance and elections process. First, the commissioners, who are elected to six-year terms, could only raise campaign funds during the year and a half preceeding their November election date. Second, the commissioners could not knowingly accept funding from companies involved in disputed cases before the commission.

Third, the commissioners would be forced to resign prior to running for another office if they had more than 18 months remaining on their Railroad Commission term. That is a response to rapid recent turnover, and to potential conflicts of raising money from donors who might be subject to a commissioner's rulings if the new campaign falls short. Despite the six-year terms, none of the three current commissioners was in office three years ago. And the commission has long been a springboard for Texas politicians seeking higher office.

Last session, RRC sunset foundered after intense debate over proposals to change the structure of the commission from three commissioners to just one. That contentious provision has been left out of the bill this time, allowing reform advocates to focus on the campaign-finance provisions.

“From my perspective,” Bonnen said at the TIPRO conference, “if you’re not going to change the governance structure, you need to change some of the issues around campaign finance.” He seemed eager to make at least one campaign-finance reform change, even if all of the proposals do not survive.

The three commissioners staunchly oppose the campaign-finance changes. They argue they should be treated just like other elected officials, who do not have to resign to run for another office.

“The agency position is, we think we should be treated like every other statewide non-judicial [office],” said RRC Chairman Barry Smitherman, in an interview in January. “I think it is a slippery slope to start putting restrictions on statewide candidates, whether they have a four-year term or a six-year term.”

Some lawmakers are not buying. “The answer to that is they are different,” Nichols said in an interview this week. The commissioners serve six-year terms, two years long than those of the governor or state senators.  The state's Supreme Court justices serve six-year terms, but also operate under different campaign finance laws. 

In addition, Nichols said, whereas lawmakers vote on policy issues, the commission votes on rate cases and also makes quasi-judicial rulings on specific cases before it.

“There’s a perception out there, right or wrong, that if you’re accepting campaign contributions right before you do a rate case or right after you do a rate case, there’s something wrong with that” Nichols said. “That came out very clearly from the public testimony.” He noted that he was “not saying anyone is doing anything wrong” and that the energy industry is thriving in Texas.

Commissioner Christi Craddick, speaking at the TIPRO conference, said she was open to this type of change, “if we could find a bright line about that.” However, she said, logistically it was hard to know the identities of every group making modest contributions — small operator may have parent companies, for example  —  and she would be concerned that an inadvertent slip could lead to a misdemeanor. 

“I think we all try to be ethical and do what we’re supposed to do,” she said.

As for raising money for only the 18 months prior to an election, Craddick was skeptical. “We have a $5,000 travel budget, period, each year for a commissioner,” she said. “I can go through that in one week. This is a huge, huge state. … We can’t go for six years without raising money. It’s not realistic.”

Years ago, Railroad Commission watchers say, the three commissioners had something of a “gentlemen’s agreement” that only the one with the next race could raise money. But that has long since fallen away. Smitherman said that such an agreement seemed worth considering, but was not something that should be put in statute.

Nichols noted that state senators and representatives are barred from accepting campaign contributions from 30 days before the legislative session to 30 days after the session.

“This should be a position [in which] people really focus on that job, because energy is so important to Texas,” Nichols said.

In other Railroad Commission news:

• It’s a spring of discontent. According to the Texas Energy Report, commission chairman Barry Smitherman complained that he was the last one to get Commissioner David Porter’s recent Eagle Ford Shale task force report.
• The Commission is expected to vote on water-recycling rules on March 26th.
• Finally, don’t miss the Texas Tribune series on water and hydraulic fracturing.