A state agency has reportedly paid millions of dollars in rent to a company run by Texas House Speaker Dade Phelan.
The Phelan family works in real estate and runs both Phelan Investments and 3105 Executive, LLC, according to the Texas Scorecard.
A public information request showed that the Texas Health and Human Services Commission (HHSC) is renting out office space from 3105 Executive, LLC, with Jennifer Ruffcorn, press officer for Texas Health and Human Services, stating that more than $2.3 million was paid to the company between 2017 and 2023.
Documents obtained by the Texas Scorecard show multiple purchase orders from the HHSC, one of which details how the agency paid $355,567.15 for the “FY18 Renewal Lease.” Similarly, another purchase order shows a payment of $408,653.36 for “FY24 Renewal Lease.”
Ruffcorn said the original lease between the parties “ran from Jan. 1, 2014, and ended Dec. 31, 2023.”
“The lease has been renewed. The current lease expiration date is Aug. 31, 2029,” she told the Texas Scorecard.
Matt Rinaldi, chair of the Texas Republican Party, highlighted the high cost of the rent compared to other office spaces, claiming in a social media post that HHSC is paying nearly triple the market value for rent in the building.
Rinaldi said that HHSC is paying $29.14 per square foot, compared to an asking price of $10 for office space in the same building.
Attorney Tony McDonald has discussed the ethical implications of the situation and said that it “appears to present a serious conflict of interest.”
“State lawmakers have the duty to responsibly steward the taxpayer money that is entrusted to them. Lawmakers, especially the Speaker of the House, have immense control and influence over the State budget, including agency budgets like HHSC,” he said, per the Texas Scorecard.
Phelan has become increasingly embattled over the last year, in part due to his appearing drunk on the House floor last legislative session and helping to organize the impeachment of Attorney General Ken Paxton, who was later acquitted by the Senate.
The Republican Party of Texas State Executive Committee voted 55-4 in early February to censure Phelan, claiming that the speaker had shown a “lack of fidelity to Republican principles and priorities,” as previously reported by The Dallas Express.
