After two hours of testimony and deliberation, the City’s Ethics Review Commission voted 6-2 last Wednesday evening to sanction Council Member Jose Velasquez for multiple ethical violations involving failure to list sources of income and a board membership in his sworn financial filings.
The vote on Velasquez came as part of a preliminary hearing in response to a sworn complaint filed by Daniel Llanes, chair of the Govalle/Johnston Neighborhood Plan Contact Team.
Council Members Natasha Harper-Madison and Paige Ellis have previously been sanctioned by the commission, but for different reasons (more about that later).
Austin City Code requires candidates and council members to file sworn Statements of Financial Information (SFI) with the City Clerk during election campaigns and while in office. These statements cover a person’s sources of income, membership in boards, debts, and numerous other details about their activities during the previous calendar year.
SFIs are filed electronically. Immediately above the signature line the form states, “Under penalty of perjury, I swear or affirm that the preceding Financial Statement of Information is in all things true and correct and fully shows all information pursuant to City Code Section 2-7-72 for the reporting period indicated.”
Velasquez’s sworn statements failed to disclose that more than 10 percent of his gross income in 2021 and 2022 came from the East Austin Conservancy and, further, that he was on that organization’s board of directors in 2021.
The ethics complaint was filed July 14th.
Five days later Velasquez filed corrected SFIs covering his activities in 2021 and 2022. These disclosed his board membership with the East Austin Conservancy, and his income from that organization in the amount of $50,000 to $75,000. In addition, his corrected SFI also included previously undisclosed income from the Austin Independent School District, also in the amount of $50,000 to $75,000.
The hearing
Velasquez was not present at the preliminary hearing. He was represented by attorney Ross Fischer, who on August 11th submitted his client’s written response to the complaint.
Fisher’s letter sought to invoke provisions of recently passed House Bill 2127, aka the “Death Star” Bill). That law, which becomes effective September 1st, states “…the governing body of a municipality may adopt, enforce, or maintain an ordinance or rule only if the ordinance or rule is consistent with the laws of this state.”
In other words, Fischer contended, because City Code mandates disclosures not required by state law when filing Personal Financial Statements, any action taken by the Ethics Review Commission concerning SFI omissions after September 1st would be unenforceable.
That argument turned out to be moot, as the matter was decided nine days before the legislation takes effect.
Fischer admitted his client’s errors. That gave commissioners the option to either schedule a final hearing later (and possibly face entanglement with the new legislation) or to immediately consider sanctions. They chose the latter.
Before discussing and deciding the appropriate sanction, they gave Fischer and attorney Bill Aleshire, who represented complainant Llanes, three minutes each to argue their positions. (Disclosure: Aleshire represents the Bulldog in all public information requests and on our behalf has twice successfully sued the City of Austin for public information.)
Aleshire told the commissioners that a Letter of Notification was not sufficient punishment for three violations, two of which involved unreported income. A Letter of Admonition seems appropriate. “My client just wants to see the council member held accountable for a violation. Treat him like you would any employee.”
Fischer argued for a Letter of Notification. “Transparency was not harmed or undermined. His relationship with East Austin Conservancy was known for years.” He said Velasquez later sought legal advice and disclosed that relationship (in connection with the zoning case). “I believe he should receive a Letter of Notification.”
In the ensuing discussion, it came out that the complainant, a longtime East Austin activist who had engaged in discussions with the council member over a zoning case—contrary to Fischer’s assertion—was not aware of Velasquez’s position on the East Austin Conservancy or that he was paid by that organization.
The motion and vote
After considerably more discussion, Commissioner Mary Kahle, who was appointed by Council Member Alison Alter, moved to issue a Letter of Admonition. “I think transparency is incredibly important, she said. “It troubles me this occurred over two years and involves multiple violations,” adding that it seems unlikely that Velasquez would inadvertently not list his board membership on the East Austin Conservancy.
Commissioner Michael Lovins, an appointee of Council Member Mackenzie Kelly, said, “I support the motion. We have three separate violations. Not disclosing membership on the board is weird. I’m troubled that someone who wants to have this power can’t understand (what’s required).”
Commissioner Sidney Williams, appointed by Council Member Harper-Madison, said, “The bigger issue is the level of diligence we expect all candidates should apply. I agree that transparency is important and this candidate did not live up to that level of transparency.”
The vote to issue a Letter of Admonition was supported by Commissioners Luis Soberon, appointed by Council Member Jose “Chito” Vela; Kahle; Amy Casto, appointed by Council Member Ryan Alter; Haksoon Andrea Low, appointed by Council Member Zohaib “Zo” Qadri; Lovins; and Williams.
Voting no were Commissioners Ed Espinoza, appointed by Mayor Kirk Watson; and William Ross Pumphrey, appointed by Council Member Paige Elllis.
Velasquez’s appointee to the commission, Alysa Nunez, recused herself from discussion and voting on this matter.
Perception of Espinoza’s conflict
Espinoza was appointed to be a member of the Ethics Review Commission effective July 20, 2023. The fact that he is married to Council Member Ellis raised concerns about the appointment and his ability to impartially consider the complaint against his wife’s fellow Council Member Velasquez. Those concerns went unheeded.
The Bulldog emailed a question to him a week earlier to ask if he planned to participate in the Velasquez hearing. A day after the hearing Espinoza responded by email, stating:
“Thank you for your email. I could not respond sooner as I was advised not to discuss matters currently before the commission. Now that the matter is settled, I offer the following statement. This is the only statement I will offer.
“The question of recusal assumes that CM Velasquez expects favorability, whereas I assume that he—and anyone coming before the commission—expects fairness, and that’s exactly what I intend to offer.
“I believe it was appropriate to move forward with sanctions, which is why I seconded the motion to take action, though I also believe that corrective action taken by CM Velasquez was worth consideration.
“My position is that a letter of notification would be appropriate given that this was a preliminary hearing in which the respondent was not required to attend, and that a fair consideration of a letter of admonition should be reserved for an actual hearing, where the respondent would be present to defend himself, and with additional evidence to review.
“The matter is now settled.”
Aleshire’s take on Espinoza
At the Bulldog’s request Aleshire emailed a response to Espinoza’s statement:
“Mr. Espinoza seems blind to (and did not address in his comment to you) the conflict of interest upon which we requested his recusal. Because he is married to a Council Member (Ellis) who must get along with her colleague Velasquez, Espinoza’s participation in the hearing raises issue of whether he was addressing the issue objectively without outside considerations.
“His vote to reduce the sanction against Velasquez can be viewed as doing what was best for his wife’s relationship with Velasquez. The situation left the appearance that his vote was influenced by his marriage to the Council Member. It was a dilemma for Mr. Espinoza that would have been avoided only by his recusal. Since that was his first meeting of the ERC, perhaps, over time, he will grow into higher standards for what constitutes a conflict of interest or the appearance of a conflict of interest.
“As far as his vote to support finding that the violation occurred, he did so only after Velasquez’s attorney formally admitted that the violation occurred, after initially trying to defend it.”
Other council members sanctioned
Velasquez is the third current member of the Austin City Council to have been sanctioned by the Ethics Review Commission.
Natasha Harper-Madison was issued a Letter of Admonition December 18, 2019, under City Code Section 2-48(C)(2) for violations of:
City Code Section 2-2-7(A), which deals with the designated period for election fundraising,
City Code Section 2-2-7(F), which deals with soliciting or accepting contributions following an election, and
Article III, Section 8 of the City Charter, which deals with the responsibility of candidates to prevent campaign contribution violations.
The complaint alleged that she violated these provisions by accepting campaign contributions outside the designated campaign period for the 2018 election. The minutes state that Commission determined, and Harper-Madison agreed, that the violations occurred.
The Commission recognized that the violations may have been unintentional and directed her to be mindful going forward. The Commission recommended that she file corrected campaign finance reports for 2019.
Paige Ellis was issued a Letter of Notification effective December 14, 2022, for violation of:
Article III, Section 8 of the City Charter, dealing with limits on campaign contributions and expenditures, by accepting contributions over the contribution limit
Ellis agreed during a preliminary hearing that contributions over the allowable limit were accepted and not refunded during the same reporting period. The Commission advised that in the future refunds should be made in the same reporting period in which contributions that exceed the limit are received.
The Commission found no reasonable grounds to believe that a second alleged violation had occurred pertaining to Austin City Code Section 2-2-21, which deals with additional information required on all campaign finance reports filed with the City, by failing to include the occupation and/or employer for certain contributors.
It should be noted that when Ellis appeared before the Ethics Review Commission concerning this complaint December 14, 2022, the minutes of that meeting state that she and her “manager” Edward Espinoza appeared in person.
The Bulldog’s research located a marriage certificate in the Travis County Clerk’s online system showing that Ellis and Espinoza were married July 10, 2022, five months before their appearance in the preliminary hearing.
Commission chair pleased with accomplishments
Luis Soberon, who chairs the Ethics Review Commission, researched minutes going back through 2018 and located several other complaints against the City’s elected officials.
In the same December 2019 meeting in which sanctions for Council Member Harper-Madison were approved (see above), the commission voted to confirm the chair’s initial determination that the commission lacked jurisdiction to consider a complaint against Council Member Jimmy Flannigan under City Code Section 2-1-24, concerning conflict of interest and recusal.
However, the complainant, Mackenzie Kelly, got her revenge a year later by defeating Flannigan in the December 15, 2020, runoff to win the District 6 council seat.
In November 2020 the commission held a preliminary hearing on a complaint against Council Member Delia Garza filed by a city auditor for alleged violations of ethics and financial disclosure under Chapter 2-7, as well as standards of conduct. under Section 2-7-62. Two commissioners recused themselves from participating in the hearing and a motion to find reasonable grounds exist to find a violation and proceed to a final hearing fell one vote short of the six required.
Harper-Madison was on the commission’s agenda again in May 2021 for a preliminary hearing on a complaint alleging a violation of Section 2-7-62(B) involving ethics and financial disclosure. A motion to proceed to a final hearing fell short and the complaint was dismissed.
Mayor Steve Adler drew a complaint over allegations of violating Chapter 2-7 for ethics and financial disclosure and Section 2-7-75 sworn financial disclosure statements. After concluding a preliminary hearing in March 2022, the commission voted to dismiss the complaint “because there were not reasonable grounds to believe a violation within the commission’s jurisdiction had occurred.”
“In my experience, members of the Ethics Review Commission with whom I’ve served do an exceptional job in considering the facts and law underlying each complaint without regard to who the parties might be,” Soberon said.
This story was updated at 12:58pm September 5, 2023, to link the Letter of Admonition issued to Council Member Jose Velasquez and the Order on the Preliminary Hearing held regarding the complaint against him.
Trust indicators: Ken Martin has been investigating local government agencies and officials in the Austin area since 1981. He founded The Austin Bulldog in 2009 and began publishing on the website in April 2010. You can reach him at [email protected].
Related documents:
Council Member Jose Velasquez sworn Affidavit declaring his income from the East Austin Conservancy in 2022, June 1, 2023 (2 pages)
Council Member Jose Velasquez corrected Statement of Financial Information covering his activities in 2021, filed July 19, 2023 (8 pages)
Council Member Jose Velasquez corrected Statement of Financial Information covering his activities in 2022, filed July 19, 2023 (8 pages)
Council Member Natasha Harper-Madison’s Letter of Admonition, December 18, 2019 (1 page)
Council Member Paige Ellis’s Letter of Notification, December 20, 2022 (1 page)
Daniel Llanes sworn complaint against Council Member Jose Velasquez, July 14, 2023 (32 pages, including Statements of Financial Information originally filed by Velasquez for 2021 and 2022)
Letter of Admonition for Council Member Jose Velasquez, August 31, 2023 (1 page)
Minutes of Ethics Review Commission meeting in which Council Member Natasha Harper-Madison was sanctioned, December 11, 2019
Minutes of Ethics Review Commission meeting in which Council Member Paige Ellis was sanctioned, December 14, 2022 (4 pages)
Order of Preliminary Hearing, August 23, 2023 (3 pages)
Ross Fischer letter to Ethics Review Commission, August 11, 2023 (4 pages)
Related video:
Ethics Review Commission meeting, August 23, 2023
Related Bulldog coverage:
Velasquez hit with ethics complaint, July 15, 2023
Battle raging over Zilker Park’s future triggers skirmish over commissioners’ conduct, June 12, 2023
