Unfair Park Exclusive: Is Pro-Hotel Faction Improperly Spending Its Money?

Scattered among the minutia related to the convention center hotel project lies the distinction between the political action committees started by the anti-hotel folks and the pro-hotel peeps. On August 27, hotel opponents backed by Crow Holdings started a specific-purpose committee called Citizens Against a Taxpayer-Owned Hotel, which was later amended in order to change the "a" to a "the." Then on September 26, Mayor Tom Leppert and friends created Build the Hotel! Invest in Tomorrow's Dallas, a general-purpose committee.

From what we could gather initially, the only major difference between the two was that specific-purpose committees must raise money for (surprise) a specific purpose, like defeating the hotel. General-purpose committees are allowed to raise money for (again, big surprise) more general purposes, which gives the committee wider discretion on how it can raise and spend funds.

But after digging a bit further, we found evidence of a variation between the two committees that reveals the Built the Hotel campaign could be in violation of the Texas Election Code.

Section 253.037 of the code addresses restrictions on contributions or expenditures by general-purpose committees and states:

(a) A general-purpose committee may not knowingly make or authorize a political contribution or political expenditure unless the committee has:

(1) filed its campaign treasurer appointment not later than the 60th day before the date the contribution or expenditure is made

And even though we won't know how much either campaign has spent until January 15, it's no secret that political expenditures have been made by Built the Hotel, as evidenced by the "Paid for by Build the Hotel! Invest in Tomorrow's Dallas" disclaimer at the bottom of its Web site. Yet, according to Texas Election Code, the committee can't spend anything until November 25 -- 60 after its campaign treasurer was filed.

Without using a specific example, we contacted attorney Brad Johnson of the Texas Ethics Commission for some clarification on this particular section of the code. He confirmed to Unfair Park that general-purpose committees cannot spend more than $500 until a treasurer has been on file for 60 days, with only two exceptions. As outlined in the code, the first would be if the committee was a political party's county executive committee, and the other is if the committee accepts contributions from a multi-candidate political committee that is registered with the Federal Election Commission, neither of which seems to apply to the Build the Hotel committee.

As Johnson points out, the TEC only has civil jurisdiction if a complaint were to be filed, and the district attorney would handle the criminal charges, which would be a Class A misdemeanor offense. Johnson says it's up to the local prosecutor to determine whether to pursue such a case and whether to consider each expenditure as individual offenses or lump all of them into one charge. The TEC has the ability to fine violators up to three times the amount of the violation, but Johnson stresses that punishment would be up to the discretion of the TEC based on the facts presented.

Laura Reed, assistant campaign treasurer for Build the Hotel, first told Unfair Park that she hadn't written a check and the committee hadn't spent any money.

But what about the Web site? Reed explained that the site had been taken over from the Dallas Convention & Visitors Bureau, but admitted that the committee is using a different domain name.

"But this new Web site, you guys are paying for it?" we asked.

"Yes," she said.

"So, you guys are spending money?" we replied.

"Yeah," she said after a lengthy pause, but then changed her mind. "We haven't spent any money yet."

Now officially confused, we asked how the site was getting paid for if they hadn't spent any money. At this point, Reed asked for the section of the Texas Election Code we were referencing and said she'd have someone else call us back, since she was just "basically the bookkeeper."

Two minutes later, she called back to say that the money spent was less than $500, and they will be filing to change to a specific-purpose committee immediately.

Brooks Love, consultant for Citizens Against the Taxpayer-Owned Hotel, says he is shocked and will have to take some time to digest the news before determining whether or not to pursue a course of action, but he's not ruling anything out.

"We want to have an open and fair discussion of the issue," he tells Unfair Park. "We're extremely disappointed that the opposition is already violating the law before we even get into the debate."

In other convention center hotel news, we recently spoke with SMU professor Cal Jillson, who weighed in on the issue back in April. He says Mayor Leppert is fortunate that his main opposition is a hotelier looking to eliminate competition, and he'll continue to move forward unless the opposition gets significantly broader. Shockingly, Jillson says a defeat at the polls in May might not stop Leppert from building the hotel.

"He may be emboldened enough to say, 'This thing is under construction; this referendum is not dispositive. We're going to continue down the road,'" Jillson tells Unfair Park. "He will have to feel that The Force is with him in order to do that, because to go against a referendum is something you'd want to think about twice an elected official, but I wouldn't rule it out."

Also, Mike Hashimoto of The Dallas Morning News' editorial board couldn't get the rest of his colleagues to sign off on this, but he presents an interesting, fact-based argument regarding just who is misleading voters on this issue, as opposed to News columnist Steve Blow, who refuses to see this issue as anything more than Harlan Crow looking out for his own pocketbook.

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Sam Merten
Contact: Sam Merten