Miller's Profit From Campaign Loan May Violate State Law

A $10,000 loan that Republican candidate for agriculture commissioner Sid Miller made to himself in 2000 — with a 10 percent interest rate that led him to pocket about $34,000 when he finally paid himself back last year — may be a violation of state law.

Miller, a former state representative, has said his actions, first reported by the Dallas Morning News last month, are permissible by Texas law. But Austin-based ethics lawyer Randall "Buck" Wood said that in 2011, state law changed. Senate Bill 1, passed during a special session while Miller was still in the Legislature, prohibited office-seekers who loaned to their own campaigns from collecting back any more money than the original loan amount — effectively banning them from charging interest and profiting off the loan. Miller voted against the bill. 

“It may have been legal for him to put interest in it in 2000. It isn’t legal anymore," said Wood. Miller paid himself back in 2012 after losing a primary election, 12 years later than the maturity date indicated on the original loan. With compounded interest over time, the amount he was owed amounted to more than three times the loan. 

Todd Smith, of Miller's campaign, said the 2011 law wouldn't apply to Miller because he made the loan more than a decade earlier. “You can’t have an ex post facto law that is retroactive. That loan was made in 2000," Smith said. “That might apply to future campaign loans, but it would not be applicable to that loan.” 

Wood disagreed, saying there is a "significant possibility" that the law applies to Miller as much as to anyone else. He added that it was unreasonable for Miller to charge such a high rate of interest for 12 years. In 2000, interest rates were high, but since the 2008 recession they have been at record lows. "He obviously was charging an extremely excessive rate, not a market rate," Wood said. 

Mark McCaig, a former member of the State Republican Executive Committee, has submitted an ethics complaint regarding the loan. Smith blasted McCaig's complaint as a distraction from the issues of the race. 

“Anybody can file an ethics complaint about anything, regardless of the validity of it," Smith said, calling McCaig a "fallen Republican."