Texas Watchdog reports on Sen. Ellis' apparent HISD bond conflict of interest
Texas Watchdog has posted an interesting bit of investigative journalism by Matt Pulle.
Pulle takes a closer look at state senator Rodney Ellis' support of HISD's 2007 bond proposal. Sen. Ellis' support came at a fairly crucial time during the debate, since HISD somewhat bungled the politics of the proposal and it had drawn a fair amount of criticism. As it turns out, Ellis apparently had quite a conflict of interest that, until now, has gone unreported:
Ellis is a high-ranking partner in a New York-based company called Rice Financial Products that stands to make money when the school system issues bonds — like the one the voters passed in 2007.
For at least a decade, Rice, which specializes in bond and derivatives transactions, has served as the minority co-financial adviser with First Southwest Co. as a part of a contractual requirement that the bank work with a “minority or women-owned business.” That same contract says that “minority firms,” like Ellis’, are eligible to receive 30 percent of First Southwest’s compensation from the district.
So, in the midst of a tense debate over the merits of HISD’s financial plan, when Ellis reassured his constituents that the district’s bond package was a “good package … a fair package,” he had a textbook conflict of interest. That same package, if voters followed the state senator’s endorsement, could inflate his firm’s coffers by tens of thousands of dollars.
The results of the Texas Watchdog investigation are posted here and here. The second page has an especially helpful chart that illustrates Ellis' somewhat convoluted financial ties to HISD -- ties that HISD's spokesman Norman Uhl told Pulle he did not know about. Ellis declined to comment for the story.
This is some really nice investigative work by Texas Watchdog, and reads like the sort of journalism one might have found in the Houston Press a decade ago (well before their political focus changed to the KTRH/conservative talk radio beat and weekly two poliblogger interviews) -- not surprising, given Pulle's background in alt-weekly journalism.
UPDATE: Sen. Ellis' office issued a non-denial denial that appears on the Chron Texas Politics blog.
Texas Watchdog responds here.
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Posted by Kevin Whited @ 03/16/09 03:10 PM | Print | Comments (9)
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