The Return of 'Rent to Own': Goodman Fined by TEC

On August 31, 2006, the Texas Values in Action Coalition filed an ethics complaint against Arlington Republican State Representative Toby Goodman, asserting that Goodman was using campaign funds to pay for property and converting those funds for personal use. Recently, the Texas Ethics Commission found that Goodman's payments were a violation of Texas Election Code Sections 253.038 and 253.035. The Ethics Commission levied a fine of $10,000. You can get the full ethics ruling here in PDF form, and see the official TexVAC release after the jump.

This ruling creates questions about a practice long defended by Texas Republican legislators — despite its failure to pass the smell test — and those that are on record as having engaged in the practice, like State Senator Kim Brimer, State Senator Jane Nelson, and State Representative Vicki Truitt.

From TexVAC:

For Immediate Release
March 20, 2008

Contact: Russell Langley
214-350-7875

Ethics Commission: ‘Rent To Own’ Scheme Violates Texas Law
Other North Texas Officeholders Involved in Similar Schemes

Dallas—The Texas Ethics Commission issued a strong ruling upholding the complaint of the Texas Values in Action Coalition (TEXVAC) and imposing a $10,000 fine against former Republican Representative Toby Goodman of Arlington. The Commission found that Goodman violated Sections 253.038 and 253.035 of the Election Code in using campaign funds to purchase real property and in converting campaign funds to personal use.

“This is a major vindication for all Texans who care about honest government,” said Ed Ishmael, a TEXVAC Co-Founder who filed the complaint with the Texas Ethics Commission. “At a time when most Texans are struggling to pay their own mortgages, it is an outrage that some Republican members of the Legislature were using their offices and campaign dollars to pay for a second home. We are pleased that the Ethics Commission clearly ruled that such conduct violates state law.”

Beginning in 1998, Goodman engaged in a scheme whereby he and his wife would purchase property, Goodman would then transfer his interest in the property to his wife as a gift, and then use campaign funds to pay the mortgage on the property in the guise of ‘rental payments’ to his spouse. The Commission found that this arrangement was far outside the bounds of previous ethics commission rulings, and that the violations merited a $10,000 fine.

Goodman’s use of campaign funds to purchase real property in Travis and Williamson Counties became public knowledge as a result of the TEXVAC complaint in 2006, and became known across the state as the ‘Rent to Own’ scandal. The controversy was responsible for unseating both Goodman and Rep. Gene Seaman of Corpus Christie who was engaged in a similar scheme.

Significantly, other Tarrant County Republican officeholders have engaged in similar practices, including Sen. Kim Brimer and Rep. Vicki Truitt. “The ‘Rent to Own’ scandal is just one more example of the Republican entitlement and corruption in Austin,” said Ishmael. “Sen. Brimer faces re-election this year, and the voters should know that he too has paid his wife rent using campaign funds.”

“TEXVAC is proud to have brought this scheme to light and pleased that the Ethics Commission has clearly ruled that schemes to circumvent the Election Code’s clear prohibitions against using campaign money to purchase real estate and for personal use will not be tolerated,” Ishmael concluded. “Elected officials should not use their offices for personal gain, but to serve the constituents they represent.”

###

A couple of years ago, stories started to come out about legislators paying rent on condos or other lodging to their spouses out of campaign funds. This activity created PR problems for some Republican legislators, and is heralded as a contributing factor in the defeats of State Representative Gene Seaman from Corpus Christi and Goodman in 2006.

We're going to work through the complaint and thresh out the particulars. More later.

Update: In case you're curious, here's the 1996 TEC ruling the GOP uses in justifying this kind of thing.