Friday, October 24th, 2014
Half-True
Perry
“This week liberal Bill White faced an ethics complaint about more than $83,000 he failed to report to the state Ethics Commission.”

Rick Perry on Friday, March 26th, 2010 in a press release

Gov. Rick Perry cites GOP complaint against Democratic foe Bill White for not reporting $83,000 to state

Video from Gov. Rick Perry's campaign

GOP Gov. Rick Perry’s campaign excels at producing provocative videos, the latest one attacking Democratic gubernatorial nominee Bill White with excerpts from Texas TV newscasts about a Republican complaint against White.

A link to the “Liberal Bill” video went to reporters on Friday accompanied by this message: “This week liberal Bill White faced an ethics complaint about more than $83,000 he failed to report to the state Ethics Commission.”

Undisputed: Such a complaint was filed by the Perry-allied Republican Party of Texas. The commission hasn't ruled on it.

Unproven: Perry's characterization of White as "liberal." That label, which isn't backed up in Perry's statement or the video, might not reflect White's record. For now, we'll let the word slide as a rhetorical swipe.

Our lingering question: Did White fail to report more than $83,000 to the state, as Perry's campaign says?

In a March 23 complaint to the Texas Ethics Commission, Cathie Adams, who chairs the Republican Party, states that White’s state-required personal financial statement, submitted in February, lists no income received in 2009 from Wedge Services, LLC though White separately reported $83,677 in wages from Wedge Services on his 2009 federal tax return.

White acknowledges that his tax return, which he recently made public, specifies his Wedge Services’ income as part of “Wages Received and Taxes Withheld.” He also admits that his personal financial statement doesn’t have an entry showing Wedge paying him.

But, White says, there’s a reasonable explanation; he wasn’t required to detail his Wedge Services’ income—which was deferred compensation—on his personal financial statement in the way it's spelled out on his tax return. White last worked for the company in 2003.

While there's no one entry on the financial statement showing Wedge Services paying White, his campaign says the income came from a brokerage account, invested in stocks and mutual funds, that was established for his deferred compensation. We confirmed that a list of the stocks and funds provided by White's campaign is on his ethics filing. While it's possible to estimate how many shares of stock White's family had in five entities plus the number of shares he had in three mutual funds, the form doesn't show the total value of such holdings or precisely how much income they produced.

But proceeds are shown in categories such as $5,000 to $9,999. The categories enable anyone (provided they get help from the White campaign identifying relevant stocks and mutual funds) to estimate that White took in $36,500 to $94,992 in 2009 due to his holdings in the Wedge-originated brokerage account.

In a March 25 sworn statement, White states the “proper recording” took place with the commission based on instructions for filing the statement and conversations with commission attorneys before and after the filing.

Confusing? There's a reason.

The Texas law governing personal financial statements doesn’t speak explicitly to reporting deferred compensation. Broadly, the relevant section (which runs about 900 words) states that each statement must reflect the filing individual’s financial activity in the preceding calendar year including a list of “all sources of occupational income." Filers must identify any person or group from which they received fees or retainers paid in advance of future services. They also must report income from stocks, bonds, notes and other commercial paper, plus each source of more than $500 from interest, dividends, royalties and rents. There's more to report, according to the law, but there's no mention of deferred compensation.

We found no past commission opinions on whether filers have to specify income from deferred compensation. Austin lawyer Buck Wood, an expert on ethics law, agreed there's nothing on the record. "That's a new one on me," Wood said.

Could White have reported the money from Wedge Services to the state in the same way he did on his federal tax return anyway? Of course—if only to avoid shots like the one fired by the Texas GOP. Not the point, his campaign said, stressing that White consulted accountants to make sure he complied with the law.

White spokeswoman Katy Bacon said a CPA for White spoke to an attorney for the ethics commission the day after the GOP filed its complaint. Bacon said Robert Mannas, an assistant general counsel for the commission, told the CPA, Nancy Wakefield, that White had reported his income correctly. Bacon said the commission's general counsel, Natalia Luna Ashley, later cautioned that Mannas's advice didn't constitute a ruling on the complaint.

Commission spokesman Tim Sorrells declined to comment on Bacon's account. Generally, Sorrells said, whether anyone has complied with relevant laws and commission rules is a call for the agency's eight appointed commission members to make.

So, where does this leave Perry’s statement?

White does face a complaint, but Perry's statement leaves out a key piece of context: That complaint was filed by the GOP.

And it's misleading to conclude, as Perry's statement does, that White failed to report more than $83,000 to the commission. White's camp said he accounted for his deferred compensation as directed. The law doesn't specify if or how candidates should report deferred compensation.

We rate Perry’s statement as Half True.