Personal Finances

Mayor, Council Update Financial Statements

 Mayor Moves to Downtown Austin

Mid-year reports must show changes in
‘substantial interests’ for first half 2015

by Ken Martin
Posted August 7, 2015 Friday 10:09am

Steve AdlerMayor Steve Adler no longer has an interest in or draws income from the Barron & Adler LLP law firm, Council Member Greg Casar now has a domestic partner, and Council Member Don Zimmerman did not timely file the required mid-year report—despite reminders of July 17 and July 29 sent by the City Clerk’s office.

The Austin Bulldog notified Zimmerman August 5 that his report was overdue and Austin City Code Section 2-7-99 provides that failure to file financial statements “shall be punished by a fine in an amount not exceeding $500.” Zimmerman filed his update August 6, six days late.

The mayor reported that he sold his homestead in West Austin and now resides in two condominiums he already owned in the W Hotel, across Second Street from City Hall. The Travis Central Appraisal District website lists the combined values of these two units at $3.5 million, but does not indicate that he has claimed a homestead exemption. Adler in a sense follows in the footsteps of another mayor, Will Wynn, who lived in West Austin when first elected and later moved downtown.

These are a few of the highlights gleaned from a review of the mid-year updates to sworn Statements of Financial Information (SFI) that Austin’s elected officials are required to file per Austin City Code Section 2-7-72(A). (Copies of these reports are linked at the bottom of this article.)

Out of sight, out of mind

An Economically Diverse City Council

 An Economically Diverse City Council

City no longer governed only
by very well-to-do citizens

by Ken Martin
© The Austin Bulldog 2015
Posted Monday June 15, 2015 2:32pm
Updated Tuesday June 16, 2015 12:23pm (regarding retirement, not resignations, of Rod Ellis and John Hrncir)
Updated Thursday June 18, 2015 1:12pm (regarding Karen Kennard’s connection to Scott Joslove)
Updated Friday June 26, 2015 2:45pm (regarding Delia Garza’s law school)
Updated Monday June 29, 2015 2:52pm (to publish Personal Financial Statements for Mayor Steve Adler, Council Member Gregorio Casar, and Interim City Attorney Anne Morgan)
Updated Wednesday July 2, 2015 12:18pm (to publish the Personal Financial Statement for Council Member Ann Kitchen)

Two years ago the headline for the story about our annual analysis of financial statements filed by officeholders was “Austin Governed by the Well-to-Do.” That broad generality can no longer be applied to the members of the Austin City Council.

Of the many changes wrought by electing council members from 10 geographic districts, it is significant that Austin has achieved not only a geographic balance and a more representative ethnic and racial balance of power, but also installed a governing body that includes members who had modest incomes.

This is the fifth year The Austin Bulldog has obtained, by filing public information requests, the sworn financial statements filed by the mayor and council members, reported on them, and published source documents. This year the city manager and city attorney’s statements have been added. (Links to previous coverage are at the bottom of this story.)

The Austin Bulldog publishes financial statements to provide greater transparency and allow increased scrutiny of these officials for possible conflicts of interest. Aside from publishing these statements for public inspection, The Austin Bulldog reviews each one, does additional research, and questions the filing officials when errors or omiissions are found.

A detailed spreadsheet, 2014 Personal Financial Activity of Mayor, City Council Members, City Manager & City Attorney, provides a comprehensive overview of each official’s finances. The financial statements themselves are linked at the bottom of this story.

The mayor and City Council members—in addition to scores of salaried city officials—are required by City Code to file a Statement of Financial Information (SFI) and swear that it “is in all things true and correct and fully shows all information required to be reported pursuant to Section 2-7-72 City Code for the reporting period indicated.”

The council members, city manager and city attorney also must file Personal Financial Statements (PFS) that require the filer to “swear or affirm, under penalty of perjury, that the statement “is true and correct and includes all information required to be reported by me under Chapter 572 of the Government Code.”

Out of sight, out of mind

Candidates Rich and Poor Competing

Candidates Rich and Poor Competing

Occupational income, investments, debts, real estate,
business interests, and much more detailed in filings

Investigative Report by Ken Martin
© The Austin Bulldog 2014
Posted Tuesday, September 30, 2014 2:54pm
Updated Wednesday, October 1, 2014 10:52am to add Delia Garza’s loans to her campaign
Updated Thursday October 2, 2014 6:07am to identify Jimmy Paver as a District 7 candidate

Steve AdlerMayoral candidate Stephen Ira “Steve” Adler is clearly the wealthiest candidate running for city office, while his two chief opponents, incumbent Council Members Sheryl Nelson Cole and Michael William “Mike” Martinez, are merely well off, comparatively speaking, based on a review of their sworn financial statements.

These financial statements are separate and apart from the contribution and expenditure reports required in connection with election campaigns.

Personal resources provide a significant advantage if candidates choose to invest in their campaigns. But that advantage is diminished if not accompanied by the work it takes to build a broad base of support.

Campaigns are not won with checkbooks alone, but according to Campaign Finance Reports filed July 15, which reflected fundraising and expenditures through June 30, 21 candidates had already loaned their campaigns a combined half-million dollars—$509,926 (not $504,911 as first stated) to be exact. (More about that later.) The next batch of campaign finance reports, due October 5, will no doubt reflect even more personal spending to finance political ambitions.

The Austin Bulldog’s investigation of personal finances illustrates the vastly different resources the candidates can bring to bear as they race toward the November 4 election. And to carry them through to the December 16 runoff—if they make the initial cut. This analysis indicates the candidates range from the mega-wealthy to the downright poor. One of the candidates reported drawing unemployment benefits last year.

Shining light in dark corners

Austin Governed by the Well-to-Do

Austin Governed By the Well-to-Do

November 2014 elections may deliver
economic diversity in next city council

by Ken Martin
© The Austin Bulldog 2013
Posted Friday May 17, 2013 1:46pm

Lee LeffingwellMayor Lee Leffingwell has investments in stocks and mutual funds with an estimated value of anywhere from $159,000 to $643,000 (since shares are reported in ranges a more specific estimate is not possible).

He enjoys an annual income of $150,000 from all sources, roughly half of which comes from his mayoral salary of $77,688.

Sheryl ColeMayor Pro Tem Sheryl Cole and husband Kevin Cole have a real estate portfolio valued on the tax rolls at $1.3 million and combined salaries of more than $100,000.

Mike MartinezCouncil Member Mike Martinez and wife Lara Wendler have combined salaries of $186,000.

They own a couple of houses that are on the tax rolls for a total of more than $1.1 million; have 38 stocks that have a bare minimum value of $170,000 (and likely far more); and their other investments are conservatively estimated at more than $250,000.

Laura MorrisonCouncil Member Laura Morrison with her husband Philip Morrison reported owning 27 stocks, six bonds and shares in 31 mutual funds.

They live in a West Austin home valued at $1.9 million. The Morrisons drew dividends of more than $35,000 and rental income of more than $35,000, and their combined salaries are $173,803.

Chris RileyCouncil Member Chris Riley owns a downtown home with domestic partner Denise Brady.

The home, valued at $807,077, also serves as a four-plex and produces rental income of more than $20,000.

Bill SpelmanCouncil Member Bill Spelman reported owning stock in 26 companies and shares in 29 mutual funds.

With wife Niyanta Spelman he owns a Hyde Park home and two other rental properties in Austin, as well as an interest in undeveloped West Texas rangeland.

Kathie TovoCouncil Member Kathie Tovo and husband Tom Hurt own or have interest in more than a dozen businesses; possess an extensive investment portfolio; and own approximately 26,000 acres of ranch land spread over four Texas counties that produced income of more than $500,000 last year from oil, gas, and land sales.

As it stands now, all seven of the city’s elected officials are comfortably well off. Just how wealthy they are is an open question. The sworn financial statements provide clues but the lack of required specificity prevents accurately quantifying the value of reported assets.

The good news is that these affluent and concerned citizens enjoy a level of financial security that allows them to use their intelligence and skills in service to the community. If they are rich it’s not because they capitalized on their elected positions.

Will geographic diversity spawn economic diversity?

Some Council Members’ Finances Change Significantly

Some Council Members’ Finances Change Significantly

Mayor carries campaign debt, Riley adds domestic partner,
Martinez adds investments, Cole reports spouse separately,
and Tovo pays off $528,000 in real estate loans

by Ken Martin
© The Austin Bulldog 2012
Posted Wednesday, August 22, 2012 10:05am

Chris RileyCity Council Member Chris Riley, an attorney, initially failed to comply with the Austin City Code by not fully reporting the financial activity of his domestic partner in his latest Statement of Financial Information.

The Austin Bulldog’s June 2, 2011, report covered similar discrepancies in Riley’s annual financial statements for 2009 and 2010.

Riley’s mid-year Statement of Financial Information covering the first six months of 2012, filed July 27, indicates that his domestic partner, Denise Brady, is an “attorney/state employee.” The report contains no other information as to Brady's specific employer, her income, investments, real property interests, debts, or boards of directors on which she may be serving, as required by City Code Sections 2-2-72(A) and 2-7-2(10).

Four Council Members Err in Latest Financial Statements

How Rich Are Austin’s Mayor and Council Members?

Most Are Pretty Well Off By Local Standards, With
Extensive Holdings in Real Estate and Investments

by Rebecca LaFlure
© The Austin Bulldog 2012
Posted Wednesday, June 27, 2012 6:48pm

Strong financial solvency is a trait shared by the mayor and other members of the Austin City Council. But properly reporting their income and assets proved to be a problem for some of the council members.

Austin Mayor Pro Tem Sheryl Cole failed to report her husband’s sources of income, clients, and board positions as required by City Code in her sworn financial statement filed March 12. 

She also did not include in the document four out of the eight properties she owns.

The Austin Bulldog discovered these, and several other, flaws in its review of the mayor and council members’ financial statements covering the 2011 calendar year.

The reports help citizens monitor possible conflicts of interest in government decisions by outlining elected officials’ sources of occupational income, gifts from non-relatives, board positions, business and real estate interests, and other personal financial information.

The Austin Bulldog opted to publish Austin City Council members’ state and City Code financial statements in this article to provide greater transparency and allow increased scrutiny of these elected officials.

City council members file mid-year financials

Posted Wednesday, August 17, 2011 10:15am
Council Member Martinez Reports
Big Gains in Financial Assets

May Have Failed to Report Major
Investments in Last Annual Report

by Ken Martin
© The Austin Bulldog 2011

Mike MartinezThe most significant changes reflected in the latest mid-year Statements of Financial Information submitted by Austin City Council members appeared in the statement submitted by Council Member Mike Martinez. He listed the names of 49 entities in which he and his wife, Lara Wendler, held, owned, acquired, or sold stock, or any other equity ownership having a value of $5,000 or more.

These holdings appear to represent an investment of at least $245,000, if each of the 49 stocks were valued at the minimum $5,000. These stocks cover a wide range of investment funds. None involve local companies. 

Martinez did not report these investments in his last annual report.

Seeking clarification, The Austin Bulldog e-mailed Martinez August 8 to ask if he owned these stocks during 2010—and failed to report them in his last annual report—or acquired them since January 1.

Martinez replied August 10: “After consulting with counsel, my wife and I have expanded the mid-year PFS (personal financial statement) to provide more information. The mid-year PFS accurately reflects our current situation.”

Martinez did not respond to a follow-up query to again ask if he had owned those investments last year and failed to report them.

Council Member Mike Martinez’ house at 2314 E. 11th St.Martinez currently has a new home under construction at 2314 E. 11th St., in Central East Austin near Boggy Creek Park. The 11,641-square-foot lot was purchased October 29, according to the Warranty Deed, and the building permit was issued May 31. The three-story, single-family residence being built by Olson Defendorf Custom Homes has 5,289 square feet, with 4.5 bathrooms and two garages, according to building permits downloaded from the city’s website.

Martinez’ financial statement indicates that he paid off three loans and took out three new loans. He also joined the board of directors of three organizations that benefit youth and social justice: Police Activity League, Community Shares of Texas, and Christopher Guild.

Other financial changes

Sworn Financial Statements

Posted Thursday, June 2, 2011 12:21pm
Updated Friday, June 3, 2011, 2:30pm
Council Members Riley and Shade
May Have Violated Austin City Code

Sworn Financial Statements Give Public
Tools to Monitor Their Elected Officials

Investigative Report by Ken Martin
© The Austin Bulldog 2011

City Council Members Chris Riley and Randi Shade may have violated the Austin City Code by not reporting the financial activity of their domestic partners.

Many financial statements filed by the mayor and other council members are incomplete or erroneous, and one annual statement is missing.

Perhaps a larger problem is that neither these elected officials (with some exceptions) nor the city staff is paying sufficient attention to ensure that these important statements are accurately prepared to fully comply with state law and the City Code. The penalties that apply to the more serious violations are not being enforced. And citizens are kept in the dark because few are aware these documents exist or where to find them.

These problems were discovered during The Austin Bulldog’s broader investigation aimed at bringing greater transparency to city government by giving citizens the tools to monitor the conduct of their elected officials.

Do Austin’s mayor and council members have conflicts of interest in the decisions they make? How would you ever know?

Aside from the fact that these officials are required to withdraw from even discussing something in which they have a substantial interest, the public is entitled to be informed of their financial interests so they can observe and monitor how these officials conduct themselves.

System lacks transparency