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Abbott Vetoes Spousal Loophole

Gov. Greg Abbott has vetoed legislation that would have opened up a new loophole allowing elected officials to cloak assets held by a spouse. State Rep. Sarah Davis, whose bills contained the controversial amendment, said she wound up adding her voice to those calling for a veto.

Gov. Greg Abbott

Editor's note: This story has been updated with the veto statement from Abbott.

Gov. Greg Abbott vetoed legislation Saturday that would have allowed married elected officials to hide their personal financial business from the prying eyes of Texas voters.

The so-called spousal loophole provision had been tacked as amendments to two bills that were otherwise aimed at increasing disclosure and eliminating conflicts of interest. In his veto statement on one of the bills, Abbott signaled that he would push for reforms in 2017 that accomplish the goals he wanted in the 2015 session.

"At the beginning of this legislative session, I called for meaningful ethics reform. This legislation does not accomplish that goal. Provisions in this bill would reduce Texans' trust in their elected officials, and I will not be a part of weakening our ethics laws," he wrote. "Serious ethics reform must be addressed next session — the right way. Texans deserve better."

The provision triggering the vetoes were in bills authored by state Rep. Sarah Davis, R-West University Place. Davis said she never should have accepted the 11th-hour spousal loophole amendment from state Sen. Joan Huffman, R-Houston. As Abbott’s decision neared and Davis was asked for input, she added her voice to those calling for a veto.

“I’m disappointed this Senate amendment put the governor in the position of having to veto two ethics bills that were originally written to make government more transparent and accountable,” Davis said.

Davis, who did manage to pass an ethics bill tightening conflict-of-interest provisions in local government, said she would re-double efforts to pass "clean" legislation addressing state ethic reforms in the next session of the Legislature.

The bills were among a batch Abbott vetoed Saturday, the day before a deadline for signing or vetoing bills.

The death of the two bills, HB 3511 and HB 3736, represented the final blow to Abbott’s calls for sweeping ethics reform in the notoriously loose Texas Legislature. After a series of far-reaching reform proposals went down in flames at the end of the session, those bills contained several compromise measures that Abbott wanted.

During his State of the State speech in February, Abbott urged lawmakers to "dedicate this session to ethics reform."

Collectively, Davis' two bills would have tightened requirements on personal financial disclosures, curbed conflicts of interest on state government boards and commissions, and required state elected officials to disclose government contracts and bond counsel work.

But the bills were marred by the inclusion of Huffman’s spousal loophole amendment. Huffman now faces a sworn ethics complaint, from a Democrat, related to her own spouse’s financial activity. Carol Wheeler, a member of the State Democratic Executive Committee, has alleged that the senator filed “false” information by failing to list more than 35 businesses in which her husband has a stake.

Huffman’s husband, nightclub owner and manager Keith Lawyer, is tied to dozens of businesses with current or past filings with the Texas secretary of state's office. Huffman does not mention his interests on her disclosure form.

Lawyer briefly became an issue in the Houston Republican’s 2008 Senate race amid reports that Huffman received heavy support from interests tied to liquor, gambling and nightclubs. In her sworn complaint, Wheeler said Huffman violated ethics rules by failing to disclose assets she jointly owned with her husband as community property.

Huffman told The Texas Tribune in the waning days of the session that she did not push the change in the law to shield her husband's business interests from public view.

Calls placed to her Capitol and district offices were not returned Saturday.

It wasn't a complete rout for transparency and ethics reform in the session. State Rep. Chris Turner, D-Grand Prairie, won passage of a bill that will close a loophole that allowed longtime elected officials to double-dip their salary and pension. Former Gov. Rick Perry had famously taken advantage of the provision toward the end of his 14-year reign.

And a bill passed by state Rep. Giovanni Capriglione, R-Southlake, will impose new disclosure requirements on people and companies with a financial stake in government contracts.

When it comes to ethics legislation, "it clearly take a long time and a lot of conversation to be able to move the ball forward at all," Capriglione said.

"I wish we had done other things as well, but I'm glad mine is one of them," he said. 

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Greg Abbott Joan Huffman Sarah Davis