Some Council Members’ Finances Change Significantly

HomeCity of AustinCity CouncilSome 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

Chris Riley
Chris Riley

City 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).

These elements of information are required for Brady because she was not listed as a domestic partner in Riley’s annual report for 2011, but was listed as such in his latest mid-year update.

The Austin Bulldog notified Riley of these omissions via e-mail August 15. Riley filed an amended statement August 17.

The changes Riley reported in his amended statement lists Brady’s employer as the Texas Department of Family and Protective Services; her occupation as attorney for Child Protective Services; and her salary as $50,000 to $75,000. (Financial information may be reported in ranges, rather than specific amounts.)

The Austin Bulldog publishes Statements of Financial Information for Austin City Council members to provide greater transparency and allow increased scrutiny of these elected officials.

City officials do not review financial statements for completeness or accuracy and statements are not made available on the city’s website.

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

Other council member updates

Lee Leffingwell
Lee Leffingwell

Mayor Lee Leffingwell’s mid-year financial statement indicates that wife Julie Byers, a registered nurse, no longer earns income from the Seton Network and that the couple sold the vacation home they owned in Loup City, Nebraska.

The statement indicates that the mayor owes a debt of $20,000 to $50,000 from his 2012 reelection campaign.

To access Leffingwell’s statement, click here.

Sheryl Cole
Sheryl Cole

Although not required, Mayor Pro Tem Sheryl Cole submitted a separate financial statement for her husband, attorney Kevin Cole. Council members usually include a spouse’s financial information within their own reports, as provided in City Code Section 2-7-72(E).

In Sheryl Cole’s report she lists a debt of $5,000 to $10,000 owed to Southwest-Visa at 19 percent interest.

Kevin Cole’s statement, which was signed by Sheryl Cole, lists loans or extensions of credit, of $5,000 to $10,000 owed to Advanta Credit Card at 7.99 percent; $5,000 to $10,000 owed to Wells Fargo JOLTA at 5.00 percent; $20,000 to $50,000 owed to Wells Fargo Business LOC (line of credit) at 9.75 percent interest; and $20,000 to $50,000 owed to Wells Fargo Business Checking at 25.9 percent interest.

To access the mid-year financial statement for Sheryl Cole, click here. For Kevin Cole’s, click here.

Mike Martinez
Mike Martinez

Council Member Mike Martinez’ mid-year financial statement indicates that he moved from his house at 5229 Tower Trail (now vacant) into his larger new home at 2314 E. 11th St.

Martinez added a number of investments to his latest report, including Austin Fixed Option (the City of Austin’s deferred compensation plan), shares in Box Investgrade Corp., shares in Lehman Credit Bond ETF, shares in S&P Preferred Stock Index, SPDR Barclays Capital High Yield, SPDR Barclays Capital International, SSgA Total Stock Index Fund, SSgA MCSI ACWI Ex US Index, and Columbia Acorn.

His statement indicated that in June 2012 Martinez paid off a $400,000 loan at 5.5 percent to Prosperity (Bank) and took out at $400,000 loan from Chase (Bank) at 4.125 percent.

Martinez joined the board of directors of the Austin Police Activities League.

To access Martinez’ mid-year financial statement, click here.

Laura Morrison
Laura Morrison

Council Member Laura Morrison’s mid-year financial statement lists no changes from the report she submitted for Calendar Year 2011.

To access Morrison’s mid-year financial statement, click here.

Bill Spelman
Bill Spelman

Council Member Bill Spelman was unable to submit an updated report due to his surgery for a pancreatic tumor. He is currently at home recuperating.

Kathie Tovo
Kathie Tovo

Council Member Kathie Tovo’s mid-year statement indicates that she has quit working for the Bob Bullock Texas State History Museum and now works for a small office real estate rental business, West Fourteenth St. LLC., located at 409 W. 14th St.

Tovo and her husband, architect Tom Hurt, paid off a $48,000 second mortgage home loan incurred in 2009 and owed to the International Bank of Commerce. They also paid in full a $450,000 loan from Capital One Bank incurred in 2007 for investment property at 409 W. 14th St.

In addition, the statement lists four architecture clients: Joshua and Erica Maniscalco at 911 W. Lynn St.; Jon and Erin Ludwig at 504 E. Annie St.; Adam and Carol Wagner at 2706 Maria Anna Road; and Nikhil Sinha and Laura Stein at 4719 Cat Mountain Drive.

Tovo has left the position of secretary of board of directors of the Families with Children From China and left the board of directors of the Dream Come True Foundation.

Tovo joined the board of the Community Action Network, the executive committee of the Capital Area Council of Governments, and became a program advisory board member of Campfire USA Balcones Council.

To access Kathie Tovo’s mid-year financial statement, click here.

What the City Code requires

Austin City Code Chapter 2-7 requires that designated public officials file a Statement of Financial Information in connection with rules for ethics and standards of conduct.

These statements may be filed electronically under procedures determined by the city clerk or on city-prescribed forms completed manually. For the latest mid-year submissions, Morrison and Tovo filed electronically, while Leffingwell, Cole, Martinez, and Riley completed handwritten reports.

The mayor and council members, as well as other designated officials, are required by City Code Section 2-7-72 to file financial statements with the city clerk by the last Friday in April covering information for January 1 through December 31 of the preceding calendar year. The latest annual reports covered financial activity in calendar year 2011.

Only the mayor and council members are required to file updates by the last Friday in July for any reportable changes to the annual statements that occurred from January 1 through June 30 of the current year.

The questions these officials are required to answer in completing forms for the Statement of Financial Information closely track the definition of “substantial interest” provided in City Code Section 2-7-2(10). The answers they provide give an indication of when an official would be prohibited from participating in a vote or decision by Section 2-7-63(A).

The Code of Ethics, embodied in City Code Sections 2-7-61 through 2-7-67, deals with how officials with a substantial interest must conduct themselves. For example, Standards of Conduct are set forth in Section 2-7-62. Prohibitions on Conflict of Interest are outlined in Section 2-7-63. Disclosures of Conflict of Interest are required by Section 2-7-64. How to deal with matters involving the Substantial Interest of a Relative is prescribed by Section 2-7-65.

Filing these financial statements on time is a serious matter. City Code Section 2-7-99 prescribes the penalty for any violation of the provisions of Sections 2-7-61 through 2-7-76 (the latter establishes filing deadlines) “shall be punished by a fine in an amount not exceeding $500.” Offenses of this nature are prosecuted in Municipal Court. Section 2-7-41 sets forth the procedures for filing sworn complaints about violations. There appears to be no penalty for filing an incorrect report.

To access financial statements for 2011 and earlier years, click on the links, below, for previously published stories.

Related Bulldog coverage:

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, June 27, 2012 (This report provides links to every financial statement filed by current council members from 2008 through 2011 for those whose service goes that far back.)

Council Member Martinez Reports Big Gains in Financial Assets: May Have Failed to Report Major Investments in Last Annual Report, August 17, 2011 (This report covers all council members’ mid-year financial statements filed in 2011.)

Council Members Riley and Shade May Have Violated Austin City Code: Sworn Financial Statements Give Public Tools to Monitor Their Elected Officials, June 3, 2011

This report was made possible by contributions to The Austin Bulldog, which operates as a 501(c)(3) nonprofit to provide investigative reporting in the public interest. You can help to sustain The Austin Bulldog’s reporting by making a tax-deductible contribution.

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