In the heyday of free-wheeling investment banking, there was a saying: without conflicts there is no interest. For Houston state Senator John Whitmire, you might say that without conflicts he wouldn’t be nearly so interesting.
He is the Senate’s longest-serving member, a remarkable feat for a Democrat in a Republican state. He has been a champion of criminal justice reform, prison reform and is one of the few true experts in state government on public pensions. But he also is one of those politicians about whom conflict of interest stories seem to spring up like mushrooms after a spring rain.
The latest is a Dallas TV station allegation that Whitmire advised the Dallas Police and Fire Pension System on how to deal with its $1 billion shortfall and battle with Dallas Mayor Mike Rawlins before the Legislature, and then the pension plan hired Whitmire as its lobbyist: “A state senator who will be voting on a bill to overhaul the Dallas Police and Fire Pension System is now advising the pension board—and under Texas law, it’s all legal. John Whitmire (D-Houston) spoke to the Dallas Police and Fire Pension board in November, one month before the board hired him as a lobbyist.”
Whitmire is livid, saying the story is a misrepresentation of his appearance before the board and his law firm’s contract with the pension fund. “I go out of my way to have a Chinese wall between my firm’s government relations people and me,” Whitmire told me. He said the firm where he is of counsel, Lock Lord in Houston, has represented the Dallas pension for 20 years and merely renewed its contract. Whitmire said if a Dallas pension bill came before the Legislature, he would abstain from voting to avoid even the appearance of a conflict of interest.
But like much with Whitmire, its just not that simple.
Whitmire told me his briefing to the pension board was nothing more than a discussion of the political atmosphere in Austin that the board members might be facing. “It’s a briefing, not representation,” Whitmire said. And for sure, some of it was. For instance, he told the board:
By the time my lieutenant governor and my colleagues deal with their social agenda, by the time we take care of restroom issues and sanctuary cities and guns, by the time we do all that, I don’t know that we’ll have time to get around to the public issues, which would include education, pensions and higher education.
Some of Whitmire’s advice was very specific, though. In a 33-minute video of his presentation that is included below, Whitmire told board members they needed to develop a plan to save the pension and not leave it up to city officials because then the perks of the pension will be whittled down to either being a 401K type savings plan or a defined-benefit pension that pays out like an annuity. He also said he would be willing to fight any plans by Rawlins or the Dallas City Council to take full control of the pension.
I would filibuster. I would preach all day long. Don’t take your pension plan and give it to the local city council. They have different pressure points.
If the city council was given control of pension assets, Whitmire said soon the money would soon be used as community investments. “If you let them control the assets of your pension, they will use it for local political patronage,” Whitmire said.
Though the Dallas City Council has four seats on the pension board, it’s essentially powerless because the majority of the board is named by police and fire groups. The Legislature in 1993 allowed the pension to establish savings accounts with a guaranteed interest rate that investments have been unable to match. That combined with some poor investments and the economic downturn have left the pension on the brink of bankruptcy, but the City of Dallas also has a responsibility to keep it solvent.
This type of conflict of interest story has dogged Whitmire for years. Whitmire last year worked with soon-to-be Houston Mayor Sylvester Turner to develop a plan for shoring up the Houston fire pension, which his law firm also counsels. In 1993, the Houston Chronicle reported that Whitmire passed a bill favorable to the Houston Firefighters’ Relief and Retirement Fund and then received a contract to represent the board in Washington. The headline was: “Whitmire backs bill, lands a job.”