Round Rock councilwoman wants clarification of city law following KXAN investigation

Round Rock Mayor Craig Morgan in an interview with KXAN. (KXAN Photo)
Round Rock Mayor Craig Morgan in an interview with KXAN. (KXAN Photo)

ROUND ROCK, Texas (KXAN) – Days after a KXAN investigation into Round Rock Mayor Craig Morgan’s personal connection to city contracts, three council members have responded to our requests for interviews, with one member wanting the city’s conflict of interest law rewritten.

“Our city charter will be reviewed in 2018 and this particular area of the charter should be clarified to avoid these types of accusations in the future,” Round Rock Council Member Tammy Young included in an emailed statement to KXAN.

Last week, we aired a report detailing Mayor Morgan’s employment by a law firm that currently holds three separate contracts to do collection work for the city. Those contracts are with McCreary, Veselka, Bragg & Allen, and P.C., commonly known as MVBA. The first contract was awarded to MVBA in 2013, while Morgan was an elected council member.

The other two contracts were signed in 2014 and 2015. The city provided two conflict of interest forms Morgan filed on the 2013 and 2014 contracts. The city did not have a disclosure form from Morgan on the 2015 contract.

Sec. 14.04. – Personal financial interest.

No member of the City Council or employee of the City shall have a financial interest, direct or indirect, in contract with the City, nor shall be financially interested, directly or indirectly, in the sale to the City of any land, or rights or interest in any land, materials, supplies or service. The above provision shall not apply where the interest is represented by ownership of stock in a corporation involved provided such stock ownership amounts to less than one percent (1%) of the corporation stock or as falls within the scope of V.T.C.A., Local Government Code § 131.903 as now or hereafter amended. Any willful violation of this section shall constitute malfeasance in office, and any elected official or employee of the City found guilty thereof shall thereby forfeit his or her elected office or employment. Any violation of this section with the knowledge, express or implied, of the persons or corporation contracting with the City shall render the contract voidable by the City Manager or the City Council.

Following an Oct. 25 interview with Morgan — an attorney — we asked him whether he’s aware of the prohibition in his city’s law books against city officials being involved in city contracts. “The one thing I would say is that’s probably a city attorney question because they’re aware of all the conflicts that are filed at the dais and, so, I think that’s more probably a question for legal. I don’t have enough information on it to answer that question,” Morgan said.

Texas Public Citizens Legislative Counsel Carol Birch reviewed the city’s law and pointed to the line that states, “No member of the City Council or employee of the City shall have a financial interest, direct or indirect, in contract with the City…”

“That’s just a flat prohibition — you can disclose all day long — you can’t do it,” Birch told KXAN. “The disclosure requirements do not give you permission; do not override the prohibition against contracting with the city.”

Birch, who wrote a portion of House Bill 501, a state ethics law signed in June, required officials statewide to disclose income, told KXAN that Round Rock’s charter prevents Morgan from serving while his law firm is doing business with the city.

“Even if the mayor isn’t, himself, doing that legal work, he benefits because his law firm benefits,” Birch said, “and the plain language of that ordinance says you can’t do that.”

A few days following that interview, the city paid Ross Fischer, a private attorney who specializes in ethics law, to provide his opinion. Fischer, who disagreed with Birch’s analysis, said the city’s charter provides Morgan an exemption.

The exemption applies to an official who might be a stockholder in a corporation doing business with Round Rock. The charter states, “The above provision shall not apply where the interest is represented by ownership of stock in a corporation involved provided such stock ownership amounts to less than 1 percent of the corporation stock…”

“The mayor has not run afoul of the charter provision,” Fischer told KXAN, “because he lacks an ownership interest in the law firm.”

Birch countered, arguing Morgan’s employment was in question with regard to the charter prohibition, not whether Morgan owned stock in MVBA.

“That’s the situation the mayor finds himself in — is that he doesn’t have an ownership interest, at all. So, certainly, within exception that’s established by the charter,” Fischer said. “It sounds like he’s designed his employment, intentionally, in a way so that he can comply with the charter.”

Round Rock City Council responds 

Before the first investigation aired on Nov. 17, we asked every member of Round Rock City Council for an interview to be included in this report. No member responded to that request, instead, the city emailed a statement detailing the steps Morgan took in 2013 and 2014 to disclose the contracts and abstain from the votes.

Tuesday morning, we asked Round Rock City Council and the Round Rock Ethics Commission members for responses to the investigation KXAN aired into Morgan’s connections to the three city contracts.

We did not receive responses from any of the seven members of the city’s Ethics Commission. The commission would decide on any ethical violation related to any city official. The commission is made up of members appointed by each member of council.

In emailed responses sent Tuesday, Round Rock council members Tammy Young, Writ Baese, and Will Peckham responded to the KXAN investigation. Peckham wrote in an email, “We have undertaken our own investigation with an outside ethics attorney and are satisfied with his opinion that no violation occurred.”

Base wrote in an email late Tuesday, “After becoming aware of the conflict of interest questions raised by your reporting, I have carefully reviewed a legal analysis of Section 14.04 of the city charter. The analysis was completed by Ross Fischer, a recognized expert in ethics law. I’m satisfied with Mr. Fisher’s opinion that Mayor Morgan did not violate the charter and consider this matter closed.”

Councilwoman Young went a step further, pointing out a problem with Round Rock’s law, “Any concerns regarding legal and ethical violations are taken seriously. To avoid any perception of bias, we sought an independent evaluation from the attorney, Ross Fischer, a leading expert in the areas of political law, professional ethics, and public integrity. I am satisfied with Mr. Fischer’s credentials and his unbiased determination that Mayor Morgan has not violated any laws or ethical standards of conduct. Our city charter will be reviewed in 2018 and this particular area of the charter should be clarified to avoid these types of accusations in the future.”

As of this report, no other elected official on Round Rock’s council or ethics commission responded to our request for comment.

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