JAMES T. CLANCY
124 Hawthorne Place
Portland, TX 78374
jclancy@branscombpc.com(361)886-3801
March 24, 2015

Dear Chairman Hobby:
Texas faces an Ethics emergency and the Commission must act now. Governor Abbott
submitted to the Legislature a specific emergency issue to increase disclosure of campaign
finance information. However, the recent decision by Judge David Cleveland, sitting byassignment in the 158th Judicial District Court in Denton County, Texas, has enormous and farreaching effects. While I believe the Commission will prevail in its appeal to the Fort WorthCourt of Appeals, until the appellate court issues its decision, I ask the Commission to
immediately cease issuing enforcement orders for all campaign finance and lobbying cases.
At our public meetings, the lawyers for Michael Quinn Sullivan and Empower Texans argued
that the entire system of campaign finance and lobbying disclosure in Texas is an
unconstitutional abridgement of the First Amendment. Now, on appeal of the lobby case, Mr.
Sullivan has sought and received an order of dismissal that the Commission’s attempt to enforce
its order is a violation of the Texas anti-SLAPP statute.
In 2011, Texas passed its anti-SLAPP statute to protect First Amendment Rights. SLAPP standsfor Strategic Lawsuits Against Public Participation. This tort reform measure is designed toquickly dismiss lawsuits brought to discourage the exercise of free speech and the right topetition the government. Plaintiffs who file SLAPP suits most commonly sue for defamation.
Sometimes, they also sue for trademark infringement, intentional inflict of emotional distress or
tortious interference with contract.
The statute broadly protects First Amendment activity. Exercise of the right of free speech isdefined in the statute to mean “a communication made in connection with a matter of publicconcern.” TEX. CIV. PRAC. & REM. CODE 27.001(3). “Matter of public concern” includes “thegovernment” and “a public official.” TEX CIV. PRAC. & REM. CODE 27.001(7). Arguably, every
matter we regulate is a public concern. However, the statute exempts “an enforcement actionthat is brought in the name of the state.” TEX. CIV. PRAC & REM. CODE 27.010(a). This statutewas not passed to end campaign finance regulation in Texas but that is how it was applied.
The latest crisis highlights the fundamental problem with the Texas Ethics Commission. An
enforcement agency cannot do its job if compliance is wholly voluntary. Despite a lengthy
administrative process at the Commission, on appeal, no evidence and no decisions from thatprocess may be used in the appeal in district court. This is not an appeal of a decision. This is anentirely new case. This is why the Sunset Commission recommended that final orders from theEthics Commission have substantial evidence as their standard of review.
The Ethics Commission should have the same standard of review as 23 other state agencies withenforcement authority. From the Animal Health Commission all the way to the Workforce{C1070878.DOCX:2}

Commission, the decisions of these enforcement agencies have legal meaning. The final
decisions of the agency that regulates the political class have none. Those with means can start
all over again in court after years of fighting the Commission. This need has fallen on deaf ears
in the legislature. The 2013 sunset bill, including this provision, was amended to remove it. Theinterim committee report doesn’t even mention the issue. Now, not one bill filed in 2015
contains this critical reform.
Nor can an enforcement agency enforce without resources. The cuts in the proposed
Commission budget by the Senate Finance Committee are significant. If funding is not provided
for staff salary supplementation, the Commission cannot take steps necessary to stop the 60%
turnover in its attorney ranks because of low compensation. If funding is not provided for theinvestigator and the auditor position, the Commission is prevented from effectively reviewing
filings or performing comprehensive investigations.
In many ways, as it is currently structured, the Texas Ethics Commission is like a traffic cop
standing in the middle of an intersection with a whistle. He has no gun, he has no patrol car, all
he can do is stand there and blow the whistle until help arrives. I am blowing the whistle. We
need substantial evidence review. We need an auditor. We need an investigator. We need to beable to pay to keep our experienced attorneys.
Until there is a decision by the court of appeals, we must stop issuing orders we cannot enforce
in the courts. Ultimately, we cannot require compliance from tens of thousands of Texans whenthose with extraordinary resources can spend hundreds of thousands of dollars to challenge a$10,000 fine. I respectfully ask the Chairman to notify the regulated community that we have
halted all enforcement actions until the full Commission can meet as soon as possible.
Very truly yours,

Jim Clancy

cc: Commissioners, Texas Ethics Commission{C1070878.DOCX:2}