(Texas Scorecard) – Mayor John Whitmire accused Houston Controller Chris Hollins of “pay-to-play” for selling sponsorships, the highest level of which awards the donor with a private dinner with the controller, to the Houston Annual Investor Conference.
The annual conference is hosted by the Controller’s Office for current and prospective investors in city utilities, the airport system, and other capital assets. During the conference, the city presents its financial performance, growth strategies, and other plans in these areas to investors and fund managers. The Controller’s Office has never offered sponsorships in the past, but Hollins, less than a year into his first term, rolled out tiers of sponsorships ranging from $10,000 to $100,000.
Whitmire said he began receiving calls from potential investors weeks ago asking if they would face repercussions regarding their ability to invest in the city if they chose not to sponsor the event.
“I was shocked that someone would put in writing to benefit a fund that he controls, $100,000 … put yourself in the shoes of a startup institution,” he said. “And then they raised the issue of the SEC rules, they don’t want to violate standards or rules, I checked with other Controllers and it’s unimaginable that a city elected official doing city business would look for sponsors for any reasons.”
According to the controller’s site, the funds would go to Houston Forward Fund, a donor-advised fund housed in the Greater Houston Community Foundation but, up until recently, it listed the Controller’s Office as its mailing address. Houston Forward’s stated programs involve a banking program to assist people with low or no-cost bank accounts and financial literacy, a program to offer low-cost and no-commitment internet service provider options for households, and assistance with voter registration and election reminders.
“It’s wrong and violates everything I stand for since I was sworn in; there are conflicts of interest being practiced and this is as clear as anything as I have seen,” Whitmire said.
The mayor also issued a letter to event participants saying, in part:
Our preliminary review has uncovered potential issues related to how the Controller’s Office has solicited funds in connection with this event. Although the matter is now under formal investigation, I believe it is crucial to inform you as a valued participant. Protecting the trust and confidence of our community is of the utmost importance, and we must act swiftly when that trust may be compromised…
I have asked the Office of Inspector General to investigate any city ordinance or ethics violations, and fully expect them to engage with outside law enforcement agencies as they come across any nexus to criminality. Should any wrongdoing be confirmed, we will take immediate and appropriate action to safeguard the public interest.
Given the serious nature of these concerns, I have decided my staff and I will not take part in this conference until these issues are fully resolved.
When asked if he referred this to a law enforcement agency, the mayor would not comment.
Controller Hollins held his own press conference following the mayor’s and held no punches, calling the mayor a “walking conflict of interest,” in part for accepting campaign contributions from the firefighters union ahead of contract negotiations.
“This man built the largest growth in the prison industrial complex in the history of the United States while taking money from private prisons hand over fist,” he said. “Just this year, he took campaign money from the firefighters’ union just weeks before voting for and being a proponent of a $650 million contract to the firefighters. If we’re going to talk about conflicts of interest here, let’s be serious. He continues to take money from city vendors, including CenterPoint, while, of course, being the person who decides who gets major contracts on a regular basis.”
He also defended his office’s attempt to recruit sponsors, saying that it was standard practice and pointing to the Mayor’s State of the City address as well as other civic events held by the Mayor’s Office of Events where sponsors are recruited to underwrite the event. Hollins said that he often supports nonprofits, regularly offering coffee meetings, or in this case, a dinner, to donors and that it is no different than VIP receptions hosted at mayoral events.
“The mayor is wasting all of your time today; he owes you an apology for this. This is a huge nothingburger that distracts from the mayor’s failed fiscal leadership,” said Hollins.
