Video raises new questions of Round Rock mayor’s ability to hold office

KXAN's Jody Barr confronts Round Rock Mayor Craig Morgan (KXAN Photo)
KXAN's Jody Barr confronts Round Rock Mayor Craig Morgan (KXAN Photo)

ROUND ROCK, Texas (KXAN) – A video of a July 2016 council meeting in Weatherford, Texas has stirred new questions over whether Round Rock Mayor Craig Morgan has told the complete story of his relationship with McCreary, Veselka, Bragg, and Allen, P.C. — a law firm that counts him as an employee.

Morgan has worked at the firm, known as MVBA, since 2006 and his biography on the law firm’s website listed him as a “partner” in the firm when KXAN checked the website last summer. Then, within days of contacting Morgan for an interview regarding our investigation into his connection to three city of Round Rock contracts, the word “partner” was removed.

“We change a lot of stuff with our website with the attorneys and all that because there are shareholders and — we just updated our website to a new website within the last year,” Morgan explained when asked about the biography change in an October interview.

Morgan has contended from the start of KXAN’s investigation that he’s never held a partner position with MVBA. Morgan said he was offered a partner role within the firm, but decided against taking the firm up on the offer.

But in July 2016, Morgan traveled 200 miles to Weatherford to speak before the Weatherford City Council in an effort to keep MVBA from losing the collections contract there.

“Mayor, council, good evening, city manager. My name is Craig Morgan, I’m a partner with the law firm McCreary, Veselka, Bragg and Allen and for the last six years we have been your vendor for the collection of delinquent fines and fees,” said Morgan in the city council video.

Morgan spoke for three minutes, trying to change the council’s mind on firing MVBA. Within that time, Morgan identified himself as a “partner” at MVBA two separate times. “And, stated that you know, I’m a partner with the firm. I was in a new role and just wanted to let them know that, at a high level of communication, if there was any issues or concerns, contact me, and let’s make sure we get this fixed and we do that throughout the state,” continued Morgan in the meeting.

Even after Morgan’s pleas, the city of Weatherford went with a new collections firm.

KXAN requested interviews with Morgan regarding the Weatherford video yet he declined an interview and didn’t respond to requests to see his employment contracts. KXAN’s Investigator Jody Barr tried to get a response from Morgan as he was walking into a meeting.

“No further comment. You’ve got sworn documents that I’m not an owner, so I have nothing further to add on it,” Morgan said.

Conflict of Interest?

KXAN’s initial investigation delved into a provision of the Round Rock Charter that bans elected officials from having a “personal financial interest” in any contract with the city.

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.

Morgan’s firm currently holds three separate contracts with the city, performing tax collections and city court and library debt collections. City records show Morgan’s firm has earned $622,000 since the first contract was signed in 2013. Morgan was elected mayor in early 2017, prior to that he served as a city council member since in 2011.

When interviewed last year, Morgan said, “I filed the appropriate disclosure statements that show I have no interest — or no ownership interest in the firm, I’m an employee.”

“Partner suggests, as a lawyer, that you have a financial interest in the firm. That you share in the profits. Now, whether he does or not, I don’t know. But, he has the ability to answer the question by producing the documents,” local government ethics expert Fred Lewis said last year.

Those documents — employment agreements and compensation contracts — are exactly what KXAN asked Morgan and his law firm’s attorneys for in early December. None of the MVBA attorneys we wrote ever responded to our messages. Morgan did, writing in a Dec. 8 email, “I will have no further comment on this matter on camera or in writing. The information previously furnished to you by the City and ethics attorney Ross Fischer contain [sic] all the pertinent information regarding this matter.”

The city paid Fischer $3,248.50 to analyze the paragraph in the city’s charter that appears to ban Morgan from serving as mayor while his law firm is making money off city contracts.

“You’ve got to read the charter as a whole. You can’t read one sentence then read the second sentence independently. What it says is that a public official — not just a member of the council but an employee — cannot have a financial interest, direct or indirect, in contract with the city. The next sentence, which you can’t ignore, that sentence says this doesn’t apply if you have less than a one percent ownership interest,” Fischer told KXAN.

The ethics attorneys we interviewed said the second sentence doesn’t apply to Morgan since the charter prohibits anyone with a “financial interest” from holding office. The experts added that if Morgan wasn’t an employee of the law firm and only owned less than one percent of the stock, he would be in the clear.

“Frankly, it’s a very bad practice. He needs to decide whether he wants to be mayor or to be a contract attorney for the city. But, he shouldn’t be both,” Lewis said.

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