### THE 

# AITORN,EY GENERAL OF -XAS A~~~N.T~AN 7t37ll
April 2, 1974 The Honorable Ron Clower Opinion No. H- 269 State Senator Rc:~ Filing requirements of Texas State Senate Section 4 ofArticle 6252-9b Auetin, Texas Vernon’s Tews Civil Statutes 1

The Honorable Mark W. White, .Jr. I Secretary of State Capitol Buil’ding Austin, Texas 78711 Dear Secretary White~ind Senator Glower: Article 6252=9b, Vernon!8 Texas Civil Statutes, the 1973 Ethics Act, requires the filfigcb sfinancial statement by certain state officiafr. designated in Sec. 3. Section 4 (a) provides that it ib to include: !

‘1.’
. .the account of the financial activity of the perron required to file the otatement by this Act and the financial activity ‘ofhis spouse and dependent children over which he had actual control for the prec~edingcalendar **year** as hereinafter provided. ” Secretary White has asked whether a husband, who is required to file a financial statement, must report the financial activities of his wife’s separate property over which he had no actual control during the preceding calendar year.

‘, Senator Glower has requested our interpretation of Sec. 4 (c) (1) of the Act which requires the report to indude:

p. 1260. The Honorable Ron Clower

The Honorable Mark W. White, Jr. page 2 (H-269)

**‘ 1.** 
**. .**  **.**

Identification of **any** person, business entity, or othc- organization from whom the perron or a busine,ss inwhich he has a substantial interest received a **fee** an a ~retainer for a claim onfuture services in case bf need-(id opposed to.a fer:for

. services on a matter specified at the time of contracting for or receiving the fee), whenever professional or occupational services Were not actually performed during the reporting period. commensurate to or in excess of the amount of the retainer, andthe category of the amount of the fee;” Article 6252-9b. V. T. C. S. , was enacted as House Bill 1of the 63rd Legislature (Acts 1973, 63rd Leg., ch. 421, p,. 1086) andwas the. first of ten bills comprising .thereform.package offered by the leadership of the House of Representatives. Section 1of the Act, declaring the policy of the State, rtater that no state officer or employee shali,have **any** financial interest or engage in any busmese transaction or professional activity “which is in substantial conflict” with the dincharge of his duties. The Act, then, requires dirclosure of financial affairs by some state officers (Sec. 3) and 

### a disclosure of interests in regulated businesses by thore’not required to file the financial’ statement (Sec. 5); it requirea disclosure by a board or commission member of private interests in matters before his board or.commission (Sec. 6); it prohibits certain acts by members of the Legislature (Sec. 7);,and it provides standards of conduct~for state officers and employees (Sec. 8). The Act was +ntended and designed to be c,omprehensive in its requirement that any private interests of decision maker.8 be disclomed 2 and made public to lessen the temptation to place personal gain over public duty. Section 4 specifies the information to be included in,the financial statement. Section 4 (a) could be read to require’ inclusion of financial

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w
The Honorable **Mark** W. White, Jr. The Honorable Ron Clower Page 3 (H-269) acttvity.of the official’s spouse and dependent’children over whom he had actual control or, alternatively, to require disclosure onlywhane had actwl control over the,financial activity itsdf. In the former interpret%tio.: there might be many situations in’which the official would have none of the required information and no ready means to acquire it. 

### Our laws incraasingly recognize the right of each spoure to have the “sole management, control, and disposition of his or her separate property. ” Section 5.21. Vernon’s Texas **Family** Code; If “actual control” refers to the spouse (a doubtful situation,~ at best) or to the dependent children, the section would requires the reporting of facts which well might+ considered “no~buriness” of the official. On the other hand, if “actual control” refers to the financial activity (grammatically more correct thanthe firrt alternativeJ;then the registrant has, only ‘toreport on financial activities over which he has control and ofwhich he haa knowledge, 

### ‘a fat 

### more r~easonableinterpretation. We are 

### ofthe opinion, therefore, that Section 4 requtrem a rogirtrant to report’on his.own financtal activities atidon those activities of his voam .’ or children over which activitier he exercises or has,the right to exercise control. Parenthetically, weirdonot interpret the Act to **require** “exclusive” control - it is rufficient **that** the registrant exercises **any** .degree 

### of control, legal or factual. Section 4 (c) (1) requires a listing of1all source8 of0,ccupational income including retainers “for a claim on future services in case of need’! when such services have not been perform&during the reporting period. Retainers pa’id’as a claim on,future services, for which no servicer are actually performed concurreqtly, are keither’unconjtion nor unethical 

### per Be. See 1Speiser., .Attorneys’ Fees, (1973). Chapter 1; “Retainer Contracts”; MacKinnon, Contingent 

### Fees for Legal Services, ‘(1964)’ pp. 20-21. So Long,as the retainer is paid in good faith.for,.service’s to be rendered~or, at leaat, for’s holding ready to .rqnder.such servic.ea, .suaha fee iok well recog&ed mz&ir of employing l&gal counsel. ..Onthi other hand, if themis,rio bona fide Anticipation of the rendition of s,ervicer and the fee ispaid to purchase influence it ‘may constitute ,a’violation .ofChapter 36 of the.Penal Code. .’

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,’

r .p:‘1262 : ,,

.,.The Honorable Mark W. White, Jr.

The Honorable Ron Clower page 4 (H-269)
We construe Sec. 4 (c) (1) to require disclosure of retainer feei paid to the registrant or any other business entity inwhich he has a substantial. business interest where, at the time of payment of the fee, servicer commensurate with the fe,e had not been rendered. SUMMARY The financial statement required by Sec. 3 of Article 6252-9b, V. T. C. S. , should include a statement of financial activItie.s in property of the r’egistrant’s spouse and children where the registrant exerciees actual control
‘:bver ouch activities. lt should alro include, as a source of occupational income, a statement of any retainer fee received **by** the registrant or a business entity inwhich he has a substantial interest andfor which no servicer have been rendered. Very truly yours, 

# u JOHN ,L. HILL Attorney General of Texas

Opinion Committee

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