Davis allegedly broke disclosure law
The complainant, Lou Ann Anderson of Temple, alleges that Davis failed to disclose her ownership of stocks and mutual funds, capital gains made on the sale of those mutual funds, interest earned on several bank accounts, and professional ties to registered lobbyists associated with a law firm at which she is employed. Davis allegedly failed to make these financial disclosures on three of the four Personal Financial Statements she has filed since taking office in 2009. Watchdog Wire has obtained copies from 2010, 2011, and 2012.
Davis disclosed ownership of a single stock and two mutual funds on each of her Personal Financial Statements, but reported ownership of several additional mutual funds on her income tax returns for each corresponding year (2010, 2011, and 2012). Davis’ 1040 and 1099-B forms include over 40 pages of proceeds from mutual fund transactions, and reveal that the Senator reported to the IRS that she bought and sold several mutual funds that made capital gains and losses during the years 2010-2012, but did not report any such activity to the state in her Personal Financial Statements for those years.
The complaint alleges that this failure to disclose violates the Texas State Code, which requires state officers and candidates for office to make public a variety of assets, including bank accounts, stocks, bonds, mutual funds, capital gains, interest earned, businesses and properties owned, rents, royalties, and other forms of wealth. This law went into effect in its present form in 1993, during the administration of Gov. Ann Richards (D), and is intended to “strengthen the faith and confidence of the people in state government” by increasing transparency and helping to ensure that conflicts of interest do not occur.
Each state officeholder in Texas–including Davis and her 180 colleagues in the Texas Legislature–is required to file a Personal Financial Statement by April 30 of each year, covering their financial activity from the previous year. The complaint against Davis alleges that the Senator repeatedly failed to disclose the same funds, capital gains, and bank accounts on her 2010, 2011, and 2012 reports, despite reporting each of these to the IRS each year.
The complaint against Davis comes at a tumultuous time for her gubernatorial campaign. Last week, a Dallas Morning News report highlighted discrepancies in Davis’ personal story, including her age at the time of her first divorce and her living conditions during her youth and young adulthood. Davis’ second ex-husband, Jeff Davis, also disclosed in an interview that he financed much of Wendy Davis’ Harvard Law School education, and was the primary caregiver to her children–including one from her first marriage, to Frank Underwood–during her years in Cambridge, MA. Jeff Davis won custody of the children when the couple divorced in 2005.
Davis has also recently come under fire for a remark she made about her presumptive Republican opponent, attorney general Greg Abbott, stating, “he has never walked a mile in my shoes.” Abbott has been unable to walk since a 1984 accident, which left him paralyzed from the waist down.
Once the complaint is processed by the Ethics Commission, Davis will have 30 days to respond in writing. If the commission deems that Davis “knowingly and willfully failed to file a financial statement” that covered her assets, she may be subject to both civil penalties and criminal prosecution.
The commission may impose up to $10,000 in civil fines, and may also turn a case over to state prosecuting attorneys for criminal prosecution. Failure to comply with the personal financial disclosure requirements is a Class B misdemeanor, punishable by up to $2,000 in fines and 180 days in jail.