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 of Article 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 ‘of his spouse 

and dependent children over which he had actual 

control for the prec~eding calendar 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 in which he has a substantial interest 

received a fee an a ~retainer for a claim on future 

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, and the category of the amount of 

the fee;” 

Article 6252-9b. V. T. C. S. , was enacted as House Bill 1 of the 

63rd Legislature (Acts 1973, 63rd Leg., ch. 421, p,. 1086) and was the. 

first of ten bills comprising .the reform.package offered by the leadership 

of the House of Representatives. 

Section 1 of 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 

p. 1261 
*I . 

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 only whane 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 than the firrt alternativeJ;then the 

registrant has, only ‘to report on financial activities over which he has 

control and of which he haa knowledge, ‘a fat more r~easonable interpretation. 

We are of the opinion, therefore, that Section 4 requtrem a rogirtrant 

to report’on his.own financtal activities atid on those activities of his voam .’ 

or children over which activitier he exercises or has, the right to exercise 

control. 

Parenthetically, weirdo not 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 of 0,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 1 Speiser., .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, .suah a 

fee iok well recog&ed mz&ir of employing l&gal counsel. ..On thi other 

hand, if them is,rio bona fide Anticipation of the rendition of s,ervicer and 

the fee ispaid to purchase influence it ‘may constitute ,a’ violation .of Chapter 

36 of the .Penal Code. .’ 

,. 

,’ 

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 in which 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 in which 

he has a substantial interest and for which no servicer 

have been rendered. 

Very truly yours, 

u JOHN ,L. HILL 

Attorney General of Texas 

Opinion Committee 

p. 1263